Economics 0115
Introduction to Macroeconomics

Semester: Fall 2011
Instructor: George Berger
Office: 120 Biddle
Phone: 269-2982/2990 or 2991
Office Hours: MWF 2-3, TH 2:00-3:30 or by appointment

TEXTS

Edwin G. Dolan, Introduction to Macroeconomics, Best Value Textbooks, 3nd Edition, 2007.
George Berger, Supplementary Readings, Fall 2011

ORGANIZATION OF COURSE

I. Introduction

A. Text (32 pages)

Chapter 4, pp. 95-100: Economic Growth

Chapter 4, pp. 101-104: Business Cycles

Chapter 6, pp. 141-44, 153-158, 161-62: GDP

Chapter 4, pp. 104-110: Unemployment

Chapter 4, pp. 110-114: Price Stability

B. Supplementary Readings (78 pages)

01. Gary Becker, Steve Davis and Kevin Murphy, “Uncertainty

and the Slow Recovery” Wall Street Journal, January 4, 2010,

4 pp.

02. Aparna Mathur, “Missing Jobs and How We Can Find Them”

Real Clear Markets Blog, August 10, 2011, 3 pp.

03. Timothy Tregarthen, "Is Zero Inflation an Economic Fantasy?" The Margin, Fall 1992, pp. 30-31.

04. Thomas Kamm, "Why Does Brazil Face Such Woes? Some See a Basic Ethical Lapse," Wall Street Journal, January 4, 1994, p. A1, 2 pp. 

05. Thomas Kamm, "Brazil's Battle to Curb Inflation Faces Hurdle: A Lot of People Like It," Wall Street Journal, March 29, 1991, p. A1, 2 pp.

06. Veronique de Rugy, “The Facts About Spending Cuts, the Debt and the GDP,” Reason Online, July 29, 2011, 5 pp.

07. Veronique de Rugy, “The Truth About Taxes and Redistribution,” Reason Online, April 22, 2011, 5 pp.

08. Ralph Byrns and Gerald Stone, "The Hyperinflation Collection," pp. 1-15.

09. Murray Weidenbaum, "The Discouraged Employer," The Freeman, November 1994, pp. 615-19.

10. James Sherk, “Economic Recovery Stalled After Obamacare Passed” Web Memo No. 3316, Heritage Foundation, July 19, 2011, 3 pp.

11. James Sherk, “Reduced Investment and Job Creation to Blame for High Unemployment” Backgrounder No. 2349, Heritage Foundation, December 9, 2009, 10 pp.

12. Jeffrey Tucker, "Notes From the Underground," Policy Review, Summer 1993, pp. 76-79.

13. David Francis, "Unemployment Insurance," The Fortune Encyclopedia of Economics, edited by David R. Henderson, Warner Books, 1993, pp. 302-05.

14.  W. Michael Cox and Richard Alm, "The Economy's Good News: The Upside of Downsizing," Policy Backgrounder No. 146, NCPA Policy Idea House, February 25, 1998, 10 pp.

15.  David Henderson, "German Economic 'Miracle'," in Fortune Encyclopedia of Economics, edited by David Henderson, Warner Books, 1993, pp. 738-41.

EXAM 1

II. The Financial Sector

A. Text (34 pages)
Chapter 7, pp. 169-74: What is Money?

Chapter 7, pp. 175-78: The Banking System
Chapter 8, pp. 193-98: How Banks Create Money

Chapter 7, pp. 178-85: The Central Bank-The Fed

Chapter 7, pp. 190-93: The Fed and Bank Reserves

Chapter 8, pp. 199-204: The Instruments of Monetary Policy

B. Supplementary Readings (51 pages)

01. George Kaufman, "Bank Runs," The Fortune Encyclopedia of Economics, edited by David R. Henderson, Warner Books, 1993, pp. 345-46.

02. Roger Leroy Miller and Daniel Benjamin, "Short-run Stabilization Policies-Fact or Fiction?" The Economics of Macro Issues, West Publishing Company, 1992, pp. 145-50.

03. Roger Leroy Miller and Daniel Benjamin, "The Political Business Cycle," The Economics of Macro Issues, West Publishing Company, 1992, pp. 151-55.

04. Roger Leroy Miller and Daniel Benjamin, "Should the Fed be Controlled?" The Economics of Macro Issues, West Publishing Company, 1992, pp. 121-25.

05. Larry H. White, “The Financial Bailouts: See the Needle and the Damage Done” The Freeman, March 2009, 59:2, 3 pp. (abridged version)

06. Jeffrey Friedman, “Capitalism Without Romance,” The American, December 5, 2009, 3 pp. (abridged from version online)

07. David Howden, “Can the Fed Successfully Exit?” Mises Daily, Mises Institute, August 3, 2010, 5 pp.

*08. "The Hungarian Hyperinflation of 1945-46"

09. Steven Horwitz, "Commercial Banking in a Free Society," The Freeman, July 1994, pp. 370-73.

10. Cindy Kelly, "Should Money Go Private?" The Margin, November/December 1990, pp. 20-21.

11. Lawrence H. White, "Competing Currencies," The Fortune Encyclopedia of Economics, edited by David R. Henderson, Warner Books, 1993, pp. 347-51.

EXAM 2

III. The International Economy

          A. Text (4 pages)

Chapter 8, pp. 204-207: The Foreign Exchange Market

B. Supplementary Readings (54 pages)

01. Jim Powell, "Forget the Crowbar," Reason, March 1990, pp. 35-38

02. Brink Lindsey, "Reciprocity for Disaster," Reason, August/September 1991, pp. 36-39.

03. Brink Lindsey, "Steel: The Other Side of the Story," Regulation, 21:4, 1998, p. 14.

04. Robert Hetzel, "The Free Trade Debate: The Illusion of Security Versus Growth," Federal Reserve Bank of Richmond, Economic Quarterly, 80, Spring 1994, pp. 39-58.

05. James Kearl, "Can a High-Wage Economy Compete with Low- Wage Economies?" Principles of Economics, 1993, p. 97.

06. John Nye, "No Trade, No Gain'" Reason, May 1996, pp. 51- 53

07. Roger LeRoy Miller and Daniel Benjamin, “The $750,000 Job” The Economics of Macro Issues, 2^nd edition, 2005, pp. 162-67.

08. Roger LeRoy Miller and Daniel Benjamin, “The Trade Revolution in Textiles” The Economics of Macro Issues, 2^nd edition, 2005, pp. 168-74.

09. John Fargo, "Thank the Japanese for Our Trade Deficit," The Freeman, October 1991, pp. 388-93.

10. Steve Hanke and Alan Walters, "Easy Money," Forbes, January 31, 1994, p. 141.

11. Steve Hanke and Alan Walters, "The Wobbly Peso," Forbes, July 4, 1994, p. 161.

EXAM 3 (FINAL)

OBJECTIVES OF THE COURSE

1. Learn the basic concepts of macroeconomics. (Students who master these concepts should be able to earn a C in this course.)

2. Learn how to connect the basic concepts of macro economics to one another in chains of reasoning. (Students who master the basic concepts and learn how to connect some of these concepts together should be able to earn a B in this course.)

3. Learn how to apply economic reasoning to real world cases. (Students who master the basic concepts, learn how to connect most of these concepts together, and learn how to apply these concepts to real world cases should be able to earn an A.)

EXPECTATIONS

1. I expect students to read assigned text material BEFORE coming to lecture. That way, students will be familiar with the ideas presented in lecture and will take better class notes as a result.

2. I expect students to memorize the assigned definitions. But please note that I do not ask students just to memorize but also to understand the definitions. Like learning a foreign language, students must first memorize before they can understand.

3. I expect students to work the homework problems BEFORE coming to class. I will answer questions about the homework in class provided that students have made an attempt to work the problems first.

4. I expect students to be on time for class and to be courteous in their behavior at all times in the classroom. . Two points are of particular importance here:

a. I CONSIDER TEXTING IN CLASS RUDE AND DISTRACTING. THEREFORE IF I EVEN SEE A CELL PHONE DURING CLASS I WILL TAKE THAT PERSON’S CELL PHONE AND PUT IT ON THE PODIUM ( IT MAY BE RECLAIMED AFTER CLASS). FOR EVERY CLASS AFTER THIS OCCURS, THIS PERSON MUST PUT HIS/HER CELL PHONE ON THE PODIUM BEFORE CLASS BEGINS. IF THIS PARTICULAR PERSON IS LATE, HE/SHE MUST PUT THEIR CELL PHONE ON THE PODIUM BEFORE TAKING A SEAT IN THE BACK OF THE CLASS.

b. IN THE PAST STUDENTS IN MY CLASS HAVE OFTEN LEFT DURING CLASS (TO GO TO THE BATHROOM, TO TAKE A PHONE CALL, WHATEVER) AND RETURNED SHORTLY. I ALSO CONSIDER THIS RUDE AND DISTRACTING. SO THIS BEHAVIOR MUST STOP. IF ANYONE LEAVES IN THE MIDDLE OF CLASS: (i) I WILL MARK YOU ABSENT AND (ii) ASK THAT YOU NOT COME BACK FOR THE REMAINDER OF THE CLASS. IF YOU ARE ILL BY ALL MEANS LEAVE CLASS IF YOU NEED TO ( ALTHOUGH IN THIS CASE IT MIGHT BE WISE NOT TO COME TO CLASS IN THE FIRST PLACE).

COURSE POLICIES

1. The course grade will be based on a total point score with points distributed as follows:

Exam 1-3 100 points each
Total 300 points

Although I cannot spell out how many points are needed for an A, how many for a B, etc., at this time, I will let you know after each exam.

2. I will use +'s and -'s for the final course grade.

3. Your grade can be calculated as follows: (1) Assume you earned a 73 on the first exam and that all scores falling into the range 70-79 are Cs and all scores falling into the range 80-89 are Bs. (2) Assume you earned an 83 on the second exam and that all scores that fall into the range 80-89 are Bs. Your total number of points earned after the second exam add to 156. What is your letter grade? Add together the minimum scores for a B which in this case is 160 points. Since your point total is less than the minimum score to earn a B, you have a C+ in the course after the second exam. (NOTE: The ranges used in this example are not necessarily the ranges that I will use during the course of the semester.)

4. Exams are NOT cumulative but cover only the material after the previous exam.

5. All exams will be a combination of definitions and multiple choice questions. A typical test will include 8 matching definitions (40 points), 12 multiple choice questions (60 points). These exams will draw on material selected from the definitions, assigned homework exercises, and supplementary readings. Extra credit questions will be included on all exams. This is the only place extra credit can be done.

6. Exams will be given in two stages. In the first stage, students complete the definition section by matching the correct definition to the correct word (no note-cards allowed). In the second stage, students may consult an unlimited number of 3"X5" note-cards (or larger) to complete the multiple choice questions. NOTE: THESE NOTE-CARDS MUST BE HANDWRITTEN. YOU MAY NOT USE TYPED OR XEROXED NOTE-CARDS OR NOTE-CARDS WHICH HAVE TYPING PASTED ONTO THEM. I DO REQUIRE THAT ALL STUDENTS TURN IN THEIR NOTE-CARDS TO ME AFTER THE EXAM. THAT MEANS YOUR NAME MUST APPEAR ON EACH NOTE-CARD YOU USE. IF I DISCOVER THAT SOMEONE HAS USED TYPED OR XEROXED NOTE-CARDS THAT PERSON WILL RECEIVE A ZERO ON THE EXAM.

7. Exams 1 and 2 will have very tight time constraints so you must be prepared to deal with them. This means writing short summaries of the supplementary reading articles; these summaries should answer all of the questions asked on the supplementary readings questions sheets.

8. Exam dates will be:

Exam 1 – Oct 11 (approximately)
Exam 2 – Nov 15 (approximately)
Exam 3 – Monday, Dec 12 @ 9 AM

Please note that you must take Exam 3 when scheduled. Exceptions will be allowed only if students provide evidence of one other exam on the scheduled date.

9. Make-up exam policy.

a. In the event of a prolonged absence (more than a single class or single day), students must immediately contact the Office of the Assistant to the Vice President of Academic Affairs, Blackington 248, (814-269-2078) to be excused from classes. For all other absences on the test date students must (1) notify me before the exam of their expected absence and (2) have a doctor’s excuse. Students who satisfy these requirements will be able to take a make-up exam.

b. If the student does neither of these things the instructor may allow a make-up exam with a penalty to be determined by the instructor or may assign the student a zero depending on the nature of the excuse. Students should note that the exams increase in difficulty throughout the course.

10. Homework problems will be assigned periodically but will not be collected. Instead, answers are available online Students should check these answers only after doing the problems. Those students who do not understand how to solve the problems should consult me or a tutor. Exam questions will be similar but not identical to these problems. 

11. Class attendance is mandatory. Students can miss THREE classes but any classes missed after that will result in 3 points being deducted from your point total for each class missed. NOTE: Attendance will be checked.

12. There is a reward for class participation, albeit an informal one. If your point total at the end of the semester is close to a grade borderline and you have made significant efforts to attend and participate in class discussions, this should be sufficient to push you over the grade borderline.

13 If you are having difficulty with the homework problem sets, please consult me.

14. Anyone cheating on any exam will receive an automatic zero on that exam.

15. I will be available for personal tutoring during my office hours. If these are not convenient we can work out another time of mutual convenience

16. FYI: THE DEADLINE FOR DROPPING AN INDIVIDUAL CLASS IS OCTOBER 28; THIS MEANS WITHDRAWAL FROM A COURSE WITH A "W" ON YOUR TRANSCRIPT. If you are earning a grade in this course that is unsatisfactory to you (a D or an F), you may drop this course on or before this date and your grade will NOT be recorded in your transcript. If you drop this course after this drop deadline, your grade at the time of the drop will be recorded on your transcript.

18. Any student receiving a D or an F in the course on either of the first two exams should seek help immediately either from me or tutors at the Academic Success Center, located in Owen G-16. These tutors can assist you in staying on track academically. You may complete an on-line request for an individual tutor at the ASC’s website, where you may also access information regarding drop-in tutoring and Supplemental Instruction (SI) sessions. Tutoring and other ASC services are free to all students. In the event you receive notification from the ASC regarding your performance in class, be sure to follow-through to obtain assistance. The Academic Counselors are committed to helping all students maximize academic potential.

19. If you have a disability for which you are or may be requesting an accommodation, you are encouraged to contact both your instructor and the Office of Health & Wellness (OHW), G-10 Student Union Building, (814) 269-7119 to schedule an appointment as early as possible in the term. OHW will verify your disability and determine reasonable accommodations for this course.