ECONOMICS
102
INTERMEDIATE
MACROECONOMICS
Department of Economics
Fall 2007
Instructor: Guido Menzio, gmenzio@sas.upenn.edu
Teaching Assistant: Sergiy Stetsenko sestet@sas.upenn.edu
Time and Location of Class: Tuesday, Thursday 9:00-10:30,
Final Examination: TBD
Office Hours:
McNeil Building 476,
Wednesday 11:00-12:00 (Teaching
Assistant)
Prerequisites: Econ 101, Multivariate Calculus
Textbook: Williamson, S. D. 2005. Macroeconomics.
Recommended
Class Website: web-facstaff.sas.upenn.edu/~gmenzio/teach_int.htm
or blackboard
Objective and Content of the Course
The course introduces you to the methodology of
modern macroeconomics and exposes you to some of the main findings developed in
the literature over the past 35 years. The primary objective of the course is
to enable you to analyse current macroeconomic phenomena and discuss policy
issues in a rigorous and independent way. The secondary objective of the course
is to prepare you (and make you ask) for more specialized macroeconomic classes
(monetary economics, labor economics, international trade, growth theory).
The course begins with the mathematical
description of the dynamic decision problems faced by households, firms and the
government. In particular, we are interested in the consumption-saving and the
work-leisure decisions of the households, in the hiring and investment
decisions of the firms, in the consumption and taxing decisions of the
government. From the solution of the decision problems of the economic actors,
we derive the demand and supply of labor, private and public consumption goods
and investment goods. Then, we introduce the definition of market equilibrium
and use it to pin down the prices of labor, consumption goods and investment.
This completes the characterization of the general equilibrium of the model
economy.
In the second part of the course, we use the
model to study three important macroeconomic topics. First, we want to
understand the mechanisms through which public policy affects aggregate output,
consumption, investment and ultimately social welfare: The model sheds light on
why tax cuts are sometimes ineffective at increasing economic activity, on why
temporary changes in government spending affect the economy differently than
permanent changes, on whether the government can improve the well-being of the
households with the appropriate mix of taxes and subsidies.
Secondly, we want to understand the causes of
fluctuations in aggregate economic activity. More specifically, we derive the
empirical regularities of the
Finally, we want to identify the engines of
economic growth. Using the model, we show that physical capital accumulation
cannot explain why the
Course Calendar
As of early January, the calendar for class is
the following. Most likely, this initial plan will be revised to respond to the
students’ interests and needs. Such revisions will be posted on the class
website, which should be visited regularly.
|
September 6 |
Introduction |
Chapter 1 + Slides |
|
September 11-13 |
National Accounting |
Chapters 2, 3 + NIPASlides
+ TreatmentSlides |
|
September 18 |
US Postwar Data |
|
|
September 20 – October 2 |
Household’s Problem |
Chapters 4, 8 + Slides |
|
October 4 |
Midterm #1 |
|
|
October 9-11 |
Firms’ Problem |
Chapters 4, 8 + Slides |
|
October 16 |
Fall Break |
No Class |
|
October 18-23 |
Competitive Equilibrium |
Chapters 5, 9 + Slides |
|
October 25 |
Welfare Theorems |
Chapter 5 +Slides |
|
October 30- November 8 |
Business Cycle Theories |
Chapters 9, 11 + Slides |
|
November 1 |
|
No Class |
|
November 13 |
Midterm #2 |
|
|
November 15 |
Growth Facts and Accounting |
Chapter 6 + Slides |
|
November 20 |
Malthusian Growth Model |
Chapter 6 + Slides |
|
November 22 |
Thanksgiving Break |
No Class |
|
November 27-29 |
Solow Growth Model |
Chapter 7 + Slides |
|
December 4 |
Physical and Human Capital |
Chapter 7 + Slides |
|
December 6 |
Midterm #3 |
|
|
TBA |
Final Examination |
|
Exams and Grades
In this class, grades are determined as
follows. If a student takes at least two of the three midterms, her grade is
determined as the average of the two best scores. If a student misses two or
more midterms, her grade is determined exclusively by the score on the final
exam. If a student misses two or more midterms and the final, she can sign-up
for the make-up exam at the beginning of next semester.
Throughout the semester, three practice tests are
going to be posted on the class website. Students are not required to solve the
practice tests, but they are recommended to do so in order to verify their
understanding of the material and to practice their exam-taking skills.
Practice tests are solved by the Teaching Assistant during review sessions.
Finally, according to recent departmental
policies, all complaints concerning grades have to be put in writing and
submitted to the instructor and the teaching assistant.