Blinder, Alan After the Music Stopped Penguin Press 2013. In addition to these
books, articles from journals will be assigned. These articles will be posted on the
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Economics 450 The Great Recession Spring Term 2014 Instructor: Michael Jenkins Office: 215A Hepburn Phone: 5525 e-mail:
[email protected] Office Hours: MTWThF 2.30-3.15 COURSE DESCRIPTION: In this seminar we will study the development of banking and finance, paying particular attention to economic crises. Crises to be considered are the Panic of 1907 that led to the creation of the Federal Reserve System, the Great Depression of the 1930s when nearly 9000 banks failed, and the Savings and Loan crisis of the 1980s when more than a thousand banking institutions failed and the cost to US taxpayers exceeded one hundred billion dollars (at that time, it seemed like a lot of money). With an understand of past crises, we will examine our current crisis, identifying ways in which our current crisis is similar to those of the past as well as identifying ways in which this crisis is unique. Finally, we will consider the prospects for reform of economy to reduce the likelihood of another crisis like this in the future. READINGS: Books to purchase Ferguson, Niall The Ascent of Money: a Financial History of the World Penguin Press 2008 Blinder, Alan After the Music Stopped Penguin Press 2013 In addition to these books, articles from journals will be assigned. These articles will be posted on the course Sakai site. You should be aware that this is a reading intensive course. Class discussion, which will be derived from the readings, is an essential part of this course. Everyone is required to participate in class discussion. You cannot do well in this course if you are not willing to put a lot of time and effort into the readings and discussions. ATTENDANCE: A record of attendance will be taken in each class. If you are absent or late for class, you are responsible both for course content covered during class and for any new assignments, changes to the syllabus, etc. that may have been announced during missed classes. CLASS PARTICIPATION: Much of our time will be spent talking about our readings; the more knowledge we bring to those conversations the more interesting and enlightening they will be. In order to be an informed participant you must complete the reading by the date assigned and be prepared to discuss.
WRITTEN WORK: All drafts and papers submitted to the instructor are to be legibly printed, double-spaced, and pages should be separated, numbered, and stapled. You should always be able to produce a duplicate of a paper. If illness or other problems prevent you from completing a paper on time, you must request an extension from your instructor before the due date. ORAL ASSIGNMENTS: Oral assignments require rehearsal and revision. Failure to be fully prepared for a scheduled oral presentation with rehearsal undermines the effectiveness of the assignment and will be penalized. “Winging it” is no more a rehearsal of a performance than handing in a few scribbled lines is a draft of an assigned essay, and wastes the time of both the faculty and your presentation collaborators and commentators. ACADEMIC INTEGRITY: A major commitment of the University is “to the intellectual development of the student” (St. Lawrence University Aims and Objectives) which can be achieved only by strict adherence to standards of honesty. At St. Lawrence, all members of the community have a responsibility to see that these standards are maintained. Consequently, St. Lawrence University students will not engage in acts of academic dishonesty. All students should have a copy of their signed and pledged agreement to the honor code from their first semester.
WORD STUDIO: The Munn Center for Rhetoric and Communication maintains The WORD Studio in ODY Library—a place to get feedback from peers on assignments in Writing, Oral communication, Research, and Design of visual projects. You can visit the Word Studio for a consultation to plan a paper or presentation; to find ways to improve the ideas, organization, and style of a draft; to video and review a presentation rehearsal; to practice a PowerPoint presentation, and more. Peer tutors are not proofreaders or editors who silently “fix” your work for you; instead, they are trained to have a conversation with you about ways you can fix problem areas yourself and become better overall communicators. COURSE GRADE: Your grade will be determined by class participation, a midterm test, a final exam and a research paper. The contribution of each to your course grade is: Participation and Presentations Midterm Test Final Exam Research Paper
10% 25% 35% 30%
Your participation and presentations grade will be the instructor’s assessment of your contribution to classroom discussions and presentations. The midterm test will take place on 20 March 2014 (prior to this date I will discuss the format with you).
The comprehensive final exam is scheduled as per university exam schedule, 5 May 2014 (format to be discussed in advance). You must complete a research paper of approximately 20 pages. It is due 5 May 2014. It is to be on a topic of your choice. The topic must be related to the course material (directly or indirectly), and you must approach the topic from the economic perspective. Topics must be approved by the instructor by 21 February 2014, or one will be chosen for you. I will be happy to discuss your paper with you as you work on it. If you would like, I will set deadlines (outline, rough draft, etc) for you. Working without contact with me is allowed, but certainly not encouraged.
COURSE OUTLINE: Please note, at the beginning of the semester the instructor cannot give to you specific dates for all class readings. Time will be devoted to a topic as discussion warrants. The instructor will inform you one week in advance of reading assignments. Also, readings on current events will be added. These will be announced by the instructor and placed on Sakai. I Introduction—views on the crisis as it happened Krugman, Paul How did Economists get it so Wrong? New York Times Magazine, 6 September 2009 The State of Macroeconomics The Economist, 16 July 2009 Fox, Justin The Myth of Rational Markets, Time Magazine, 22 June 2009 II History of money and finance Ferguson Parts 1, 2, and 3 IV Markets for housing and other property Ferguson Part 5 V The economic crisis Blinder Chapters 1-9 VI Financial reform Blinder Chapters 10-18
VII Conclusions Bernanke, Ben Causes of the Recent Financial and Economic Crisis, Statement before the Financial Crisis Inquiry Commission, Washington D.C. 2 September 2010 Bernanke, Ben Financial Reform to Address Systemic Risk, Speech at the Council on Foreign Relations, Washington D.C. 10 March 2009 The Financial Crisis Inquiry Report, the Financial Crisis Inquiry Commission, Official Government Edition, Washington D.C. January 2011 Conclusions pp. vx-xxviii Dissenting view of Commissioners Keith Hennessey, Douglas Holtz-Eakin, and Bill Thomas pp. 411-440 Gorton, Gary, and Andrew Metrick Getting Up to Speed on the Financial Crisis: A OneWeekend-Reader's Guide, Journal of Economic Literature, March 2012 Mishkin, Fredrik Over the Cliff: From the Subprime to the Global Financial Crisis Journal of Economic Perspectives, Winter 2011
