Syllabus for Econ 302: Intermediate Macro (Tesfatsion)

Latest Course Offering: Fall 1996, TTH 2-3:25 P.M.
Syllabus Last Updated: 10 December 1996


Course Instructor: Professor Leigh Tesfatsion
Address:
375 Heady Hall
Department of Economics
Iowa State University
Ames, Iowa 50011-1070
Telephone: (515) 294-0138
Email: tesfatsi@iastate.edu
WWW: http://www2.econ.iastate.edu/tesfatsi/
F96 Office Hours: MW 1-3:30 P.M. and by appointment



COURSE OBJECTIVES:

Since the early nineteen seventies, macroeconomic theory has been in a state of great flux. In addition to traditional classical and Keynesian IS-LM models, macroeconomists are now also developing a variety of new models based more explicitly on the micro behavior of individual consumers, firms, and financial intermediaries.

Robert Hall and John Taylor, two respected economists, have constructed a macro model incorporating both traditional Keynesian thinking and frontier research on expectation formation, financial intermediation, wage contracts, and open-economy linkages. They develop this model in their textbook Macroeconomics, which has rapidly become a leading textbook in the United States for intermediate macro courses. As noted above, this textbook is the basic required textbook for Econ 302.

In the process of developing their model, Hall and Taylor introduce a variety of tools and concepts currently regarded as essential for any careful macroeconomic analysis. In Econ 302 we will consider carefully the advantages and limitations of these tools and concepts. In particular, using the Economic Report of the President in conjunction with the Hall and Taylor text, we will investigate the degree to which the Hall and Taylor model captures well-documented empirical regularities in observed economic behavior and the extent to which it provides a useful thought tool for analyzing major economic policy issues currently facing the United States and other industrialized nations.


EXERCISES, QUIZZES, AND EXAMS:

EXERCISES: Assigned exercise sets will consist of a selection of exercises similar to the exercises found at the end of each Hall and Taylor chapter; these exercises will be graded by the teaching assistant. Practice exercises can be found in the Papell study guide, and exercises from the Econ 302 course offered in S96 have been made available as practice exercises on the Econ 302 home page. These practice exercises should help students prepare for undertaking the assigned exercise sets. Students are strongly urged to work through these practice exercises in a timely manner. Please note that each assigned exercise set must be turned in at the beginning of class on the specified due date. Late assignments will not be accepted--no exceptions!

QUIZZES: Four short in-class quizzes (10 points each) will be given during the semester to give students (and the instructor!) timely signals regarding the students' preparation and understanding of course materials. The quizzes will be given during the FIRST fifteen minutes of class on the following dates: September 19; October 17; October 31; and November 14. The quizzes will be graded by the instructor.

MIDTERM EXAM:
FINAL EXAM:
IMPORTANT ADDITIONAL INFORMATION:

OUTLINE OF TOPICS AND REQUIRED READINGS

Class lecture topics and required readings are listed below. Required basic lecture notes for some of the assigned Hall and Taylor (HT) chapters (and possibly other assigned readings) will be made available on this web site, and also put on closed reserve in the Econ/Soc Reading Room in Heady Hall 368, as the course proceeds. The HT chapter readings include the review and practice sections at the end of each chapter. The exact amount of time spent on each topic, and the particular selection of assigned exercises, will be determined as we proceed through the course and will depend on the backgrounds and interests of the students.

Please note: Practice exercise sets have been made available for self-study, and are highly recommended for all students. Also, advanced lecture notes have been made available for some of the assigned HT chapters. These advanced lecture notes are recommended for students wishing to acquire a more in-depth understanding of macro; they are not required.

I. INTRODUCTION

HT Chapter 1 (The Macroeconomy)
Study Guide, Chapter 1
Economic Report of the President, Chapter 1 (pp. 19-40)
Basic class lecture notes on HT Chapter 1

First Assigned Exercise Set, Due Sept 10, 2:10 P.M.

II. TOOLS AND CONCEPTS FOR MACROECONOMIC ANALYSIS>

HT Chapter 2 (Measuring Economic Performance: Output and Income)
Study Guide, Chapter 2
Economic Report of the President, Chapter 2 (pp. 41-75)
Basic class lecture notes on HT Chapter 2
First Assigned Exercise Set, due September 10, 2:10 P.M.

Advanced lecture notes for HT Chapter 2
(recommended only)

HT Chapter 3 (Inflation and Employment)
Study Guide, Chapter 3
Basic class lecture notes on HT Chapter 3
Second Assigned Exercise Set, due September 17, 2:10 P.M.

Advanced lecture notes for HT Chapter 3
(recommended only)

Practice Exercise Set 1
Answer Outline for Practice Exercise Set 1
Practice Exercise Set 2
Answer Outline for Practice Exercise Set 2

III. THE BASIC HALL AND TAYLOR MACROECONOMIC MODEL

HT Chapter 4 (The Long-Run Growth Model), pp. 87-98 and 104-111
Study Guide, Chapter 4
Basic class lecture notes on HT Chapter 4

Advanced lecture notes for HT Chapter 4
(recommended only)

HT Chapter 5 (Monetary and Fiscal Policies), pp. 122 and 132
Study Guide, Chapter 5
Economic Report of the President, Chapters 3--4 (pp. 77-129)
Basic class lecture notes on HT Chapter 5
Third Assigned Exercise Set, Due October 1, 2:10 P.M.

Advanced lecture notes for HT Chapter 5
(recommended only)

Midterm Exam: Review Guide

HT Chapter 6 (Short-Run Fluctuations and Spending Balance)
Study Guide, Chapter 6
Basic class lecture notes on HT Chapter 6
Fourth Assigned Exercise Set, Due October 15, 2:10 P.M.

Advanced lecture notes for HT Chapter 6
(recommended only)

HT Chapter 7 (Financial Markets and Aggregate Demand)
Study Guide, Chapter 7
Basic class lecture notes on HT Chapter 7
Fifth Assigned Exercise Set, Due October 29, 2:10 P.M.

Advanced lecture notes for HT Chapter 7
(recommended only)

HT Chapter 8 (The Complete Model)
Study Guide, Chapter 8
Basic class lecture notes on HT Chapter 8
Sixth Assigned Exercise Set, Due November 12, 2:10 P.M.
Seventh Assigned Exercise Set, Due November 21, 2:10 P.M.

Advanced lecture notes for HT Chapter 8
(recommended only)

HT Chapter 9 (Macroeconomic Policy: A First Look)
Study Guide, Chapter 9
Basic class lecture notes on HT Chapter 9
In-class exercise on simplified presidential platforms: Discussion notes

Advanced lecture notes for HT Chapter 9
(recommended only)

Practice Exercise Set 3
Answer Outline for Practice Exercise Set 3
Practice Exercise Set 4
Answer Outline for Practice Exercise Set 4
Practice Exercise Set 5
Answer Outline for Practice Exercise Set 5
Practice Exercise Set 6
Answer Outline for Practice Exercise Set 6

Final Exam: Review Guide

FINAL EXAM

According to the ISU bulletin, the final exam for Econ 302 is tentatively scheduled for Tuesday, December 17, 12:00-2:00 P.M., in the regular class meeting room Heady 274.

Practice final exam and answer key