University of Waterloo. Department of Economics. ECON 302: Macroeconomic
Theory II. Instructor: Joseph DeJuan. Office: Hagey Hall 208. Phone:.
University of Waterloo Department of Economics ECON 302: Macroeconomic Theory II Instructor: Office: Phone: E-mail: Office Hours:
Joseph DeJuan Hagey Hall 208 519-888-4567 ext. 33549
[email protected] Tue 3-3:30pm, Wed 9-12noon, Thu 3-3:30pm
Term/ Year: Spring 2013 Welcome to Macroeconomics. This course is designed to help students develop an understanding of the microeconomic foundations of macroeconomics. Topics included for discussion are consumption theories, the role of money, inflation dynamics, fiscal policy and the government budget, public debt, and theories of economic growth. The prerequisites for this course are (i) ECON 202, (ii) ECON 211, and (iii) willingness to work. Students are strongly encouraged to attend all class lectures, participate in discussion, and do the assignments. Textbooks Barro, R. and A. Serletis (2010). Macroeconomics: A Modern Approach, 1st Canadian edition, Nelson Publisher. Barro, R. (1997). Macroeconomics, 5th edition, MIT Press. Jones, C. (2001). Introduction to Economic Growth, 2nd edition, W. W. Norton & Company. Romer, D. (2006). Advanced Macroeconomics, 3rd edition, McGraw Hill. Williamson, S. (2010). Macroeconomics, 3rd Canadian edition, Pearson Canada. Evaluation Assignments Midterm exam (June 6, Thursday class time) Final exam (Scheduled by the Registrar’s office)
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Important Notice • There is no deferred or make-up midterm test. If you miss the test due to illness and have a valid medical documentation, then the weight of the test will be shifted to the final exam. Otherwise, a mark of zero will be given to the missed test. •
Assignments are due at 5:30pm on the due date. There will be a 30% mark deduction per day for any assignments handed in late.
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To maintain a classroom environment that is conducive to learning, I expect the highest level of courtesy and professional behavior from every student. In particular, be punctual and turn off all audible ringers on phones, pagers, and laptops during class.
Topics (additional readings will be assigned in class): 1.
Economic Growth: Theories and Evidence Readings: Barro and Serletis Chapters 3, 4, 5; Romer Chapter 1 Alfaro, L., S. Kalemli-Ozcan, and V. Volosovych (2008). "Why Doesn’t Capital Flow from Rich to Poor Countries? An Empirical Investigation." Review of Economics and Statistics 90: 347-368. Gylfason, T. (2001). "Natural Resources, Education, and Economic Development." European Economic Review 45: 847-859. Hall, R. and C. Jones (1999). "Why Do Some Countries Produce So Much More Output Per Worker Than Others?" Quarterly Journal of Economics 114: 83-116. Lucas, R. E. (1990). "Why Doesn’t Capital Flow from Rich to Poor Countries?" American Economic Review Papers and Proceedings 80: 92–96. Reinhart, C. and K. Rogoff (2004). "Serial Default and the “Paradox” of Rich-toPoor Capital Flows." American Economic Review Papers and Proceedings 94: 53-58. Sala-i-Martin, X. (1996). "The Classical Approach to Convergence Analysis." Economic Journal 106: 1019-1036.
2.
Microeconomic Foundations of Macroeconomics 3.1 Markets, Prices, Demand, and Supply 3.2 Foundations of Household Choice 3.3 Intertemporal Choice 3.4 Equilibrium Business Cycle Model 3.5 Capital Utilization and Unemployment Readings: Barro and Serletis Chapters 6, 7, 8, 9; Romer Chapter 7 Hall, R. (1978). "Stochastic Implications of the Life Cycle-Permanent Income Hypothesis: Theory and Evidence." Journal of Political Economy 86: 971987. Hsieh, C. T. (2003). "Do Consumers React to Anticipated Income Changes? Evidence from the Alaska Permanent Fund." American Economic Review 93, 397-405. Kreinin, M. (1961). "Windfall Income and Consumption: Additional Evidence." American Economic Review 51, 388-390.
3.
Money, Inflation and Interest Rate 4.1 Demand for Money 4.2 Inflation, Money Growth, and Interest Rates 4.3 Neutrality of Money 4.4 Dynamics of Inflation Readings: Barro and Serletis Chapters 10, 11 Hall R. (2010). "Why Does the Economy Fall to Pieces after a Financial Crisis?" Journal of Economic Perspectives 24: 3-20.
4.
Government 5.1 Government Consumption 5.2 Taxes and Transfers 5.3 Public Debt Readings: Barro and Serletis Chapters 12, 13, 14 Auerbach, A., W. Gale, and B. Harris (2010). "Activist Fiscal Policy." Journal of Economic Perspectives 24: 141-164. Seater, J. (1993). "Ricardian Equivalence." Journal of Economic Literature 31: 142-190.
Academic Integrity, Grievance, Discipline, Appeals, and Note for Students with Disabilities Academic Integrity: In order to maintain a culture of academic integrity, members of the University of Waterloo community are expected to promote honesty, trust, fairness, respect and responsibility. Grievance: A student who believes that a decision affecting some aspect of his/her university life has been unfair or unreasonable may have grounds for initiating a grievance. Read Policy 70 - Student Petitions and Grievances, Section 4, http://www.adm.uwaterloo.ca/infosec/Policies/policy70.htm. Discipline: A student is expected to know what constitutes academic integrity, to avoid committing academic offenses, and to take responsibility for his/her actions. A student who is unsure whether an action constitutes an offense, or who needs help in learning how to avoid offenses (e.g., plagiarism, cheating) or about Arules@ for group work/collaboration should seek guidance from the course professor, academic advisor, or the Undergraduate Associate Dean. When misconduct has been found to have occurred, disciplinary penalties will be imposed under Policy 71 B Student Discipline. For information on categories of offenses and types of penalties, students should refer to Policy 71 - Student Discipline. http://www.adm.uwaterloo.ca/infosec/Policies/policy71.htm. Appeals: A student may appeal the finding and/or penalty in a decision made under Policy 70 - Student Petitions and Grievances (other than regarding a petition) or Policy 71 - Student Discipline if a ground for an appeal can be established. Read Policy 72 - Student Appeals, http://www.adm.uwaterloo.ca/infosec/Policies/policy72.htm. Academic Integrity website (Arts): http://arts.uwaterloo.ca/arts/ugrad/academic_responsibility.html Academic Integrity Office (UW): http://uwaterloo.ca/academicintegrity/ Note for students with disabilities: The Office for Persons with Disabilities (OPD), located in NH1132, collaborates with all academic departments to arrange appropriate accommodations for students with disabilities without compromising the academic integrity of the curriculum. If you require academic accommodations to lessen the impact of your disability, please register with the OPD at the beginning of each academic term.
