Instructor:          Theo S. Eicher
Office hours:     Wed 3:20-5:20pm, or by appointment
(:                     685 8082
:-mail:        te@u.washington.edu
Office:               Savery 310P
class web page: http://depts.washington.edu/~teclass/econ301/class.html

Prerequisites:

You must have completed a course in

• Intro to Macroeconomics (Econ 201)
• Intermediate Microeconomics (Econ 300)
• Calculus (Math 125 and Math 136)

Homework:

• As with any other course, you should expect to spend about two hours outside of class for every hour in class.
• If you have not mastered the prerequisite skills (you will find out after the first quiz), then you must expect to spend additional time.
• This course represents a learning process. I expect every student to respect the integrity of this process. That entails reading assignments before class and participating attentively in discussions in class. This includes the Wall Street Journal.
• You will be continuously tested on your reading assignment in class.
• I WILL ASSIGN THE READING AND PROBLEM SET IN CLASS.  IF YOU MISS A CLASS, IT IS YOUR OBLIGATION TO FIND OUT WHAT THE ASSIGNMENT IS.

• Greg Mankiw, Macroeconomics Fourth Edition, NY: Worth .
• Various readings to be assigned
• The web page, http://depts.washington.edu/~teclass/econ301/class.html contains the syllabus. I will also try to scan in problem set material and publish all homework related material on the web. However, at this point the web page is experimental.
• There may be a password associated with the web page, because some content is proprietary. If you forgot the password, just e-mail me.

I strongly recommend a 10-week subscription to the Wall Street Journal ($20). We will not use it on a daily basis. However, as often as current events allow, we will discuss articles from the paper.

Miscellaneous:

If you have special needs, requests, requirements, please come see me immediately.

Grading:

• I do not like to assign low or failing grades and will not assign respectable grades to students who perform at the level of mere degree purchasers.
• Late homework cannot be accepted.
• There are no makeup exams or makeup quizzes under any circumstances.
• Your grading is based on three midterm exams (20% each), 3 Tests, (10% total) and your class participation and homework (10%).  The midterm exams are cumulative.
• Note that class participation does not include class attendance! (You do not get a grade just "because you were there.")
• I value class participation, which does not mean that I value only correct answers! I do not mind wrong answers, if you are sincerely trying to answer a question. Especially, if my questions require more than trivial regurgitation from the book, mistakes are natural.
• Class participation can make a big difference. Actively talking and thinking economics may be the most important element to further your economic intuition. It would be nice if we had time to take one hour every once in a while and discuss a current event or breaking economic news in class. I encourage you to ask for such an hour whenever you find something in the newspaper that you think might be appropriate. These discussions can be interesting and a lot of fun interesting if you are willing to participate.
• I encourage you to come to my office hours. If you have a time conflict with my office hours, talk to me and we arrange an alternative time

Welcome to Macroeconomics!  Instead of investigating the theory of the Firm, optimal price theory, or output decision, we will examine the mechanics of the entire economy, where we aggregate over all firms, and industries and all consumers.

This class will be all about Policy, we will discuss the economic plans of the Federal government, how it spends it money, how it raises its revenues, and how changes in its spending affect total output of the country.  In addition we will investigate the determinants of the money supply, the price of money (the interest rate) and its effects on the aggregate output and employment and prices.

 Finally we examine the policy options that a country processes to balance budgets (should we ?) achieve full employment (can we?) or wipe out a large fraction of the savings of its citizens.  If you like policy, you will love this class.  BUT we first must learn tools and methods of analysis before we can apply our knowledge, so be patient!

• I. What Is Macroeconomics --in production, employment, and prices--and economic policy

• II. Measuring economic activity: expenditure, income, production
• III. Making index numbers
• IV. Measuring Unemployment
• Problem Set One: Macroeconomic Measurement
• Test 1

Production and Distribution of National Income
Macroeconomics, chapter 3.

• V. Factors of production and the production function
• VI. Consumption and Investment
• VII. Short Run and Long Run Equilibrium
• Summary of the Classical Model (otherwise known as the full-employment model, or the long-run model; in short, the model of the economy developed in chapter 3 of Mankiw's textbook).
• Problem Set Two: Production and Distribution

• VIII. Money and Inflation
• IX. Seignorage; Real and Nominal Interest Rates
• IXa. Money, Velocity, and Inflation.
• Problem Set Three: Money and Inflation;
• Test 2

• X. Investment, Savings, and Liquidity Preference
• XI. Shifting and Tilting the IS and LM Curves
• XII. IS and LM Shocks, and Real and Nominal Interest Rates
• XIIa. Case study: the Great Depression
• Problem Set Four: Aggregate Demand;

Unemployment
Macroeconomics, chapters 6 and 13.2.-end

• XIII. Frictional and Structural Unemployment
• XIV. Inflation, unemployment, and the Phillips curve
• XIVa The Sacrifice Ratio and Other Topics
• Problem Set Five, Unemployment
• Test 3

• XV. Rules vs. Discretion;
• XVI.  Automatic Stablilizers

• XVII. Debt and Deficits, Measurement, Effects, Social Insurance
• Problem Set Six Humphrey Hawkins