Parkes' Principles of Macroeconomics Assignments Page, Spring 2010
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Tentative Schedule and Course Assignments:
June 1, 2010 Chapter 35: Open Economy Macroeconomics continued
- Chapter 33: Inflation, Disinflation, and Deflation
- Effects of Inflation
- Winners and Losers from Unexpected Inflation
- Real versus nominal interest rate - The Fisher Effect
- Costs of Inflation
- Moderate Inflation and Disinflation - Definitions and Causes
- The Great Disinflation of the 1980s
DEFLATION - Today's Issue
- Effects of Unexpected Deflation
- Effects if Expected Deflation
- Examples: Japan, Europe today maybe?
Chapter 35: Open Economy Macroeconomics continued
The Role of Exchange Rates
Understanding Exchange Rates
The Equilibrium Exchange Rate
Shifts in Demand
Inflation and Real Exchange Rates
Purchasing Power Parity
- Big Mac Index
- Dollar and the Deficit
Exchange Rate Policies
Exchange Rate Intervention and Foreign Exchange Reserves
Exchange Rate Regime Dilemma: To Fix or Not To Fix
Examples of fixed rates: Bretton Woods, Euro, Yuan
Macroeconomic Policies and Exchange Rates
Day 19 PPT - Stock Markets
Krugman's Chapter 35 PPT
June 3, 2010 Review and Chapter 34: The Making of Modern Macroeconomics
Week 11
FINAL EXAM, Chapters 23 - 35 on Tuesday, June 8, 2010
2:15 pm to 4:15 pm
Rooms 2212, 2311, and 2312
PAST ASSIGNMENTS:
Week 9
May 25, 2010 Chapter 33: Inflation, Disinflation, and Deflation
- Chapter 33: Inflation, Disinflation, and Deflation
- Money and Inflation
- Money and Prices Revisited
- Classical Model of the Price Level
- Inflation Tax
- seigniorage
- Cost, real inflation tax
- Hyperinflation - One Cause: seignoirage
- The Logic of Hyperinflation
- Brazil
- Yugoslavia
- Zimbabwe
- Day 17 PPT - Not Available yet
- Krugman's Chapter 33 PPT
May 27, 2010 Chapter 33 continued and Chapter 35: Open Economy Macroeconomics
- Chapter 34: Modern Macroeconomics
- Classical Economics - A little look back
- The Beginning of the Business Cycle
Chapter 35: Open Economy Macroeconomics
Balance of Payments
Trade Balance, Current Account and Financial Account
Modeling Private International Capital Flows
- Determinants of Private International Capital Flows
- Twin Deficits
- The Golden Age of Capital Flows
The Role of Exchange Rates
Day 18 PPT - Apple's #1
Krugman's Chapter 35 PPT
Week 8
May 18, 2010 Chapter 31: Monetary Policy continued and Chapter 32:Labor Markets and Unemployment
- REVIEW the Exam
- Chapter 31: Monetary Theory continued
- Short Run versus Long Run Effects
- Price level effect in the long run on Money Demand, interest rates return and higher costs decrease business firms' supply
Money Neutrality
Chapter 32: Labor Markets and Unemployment
Three Types of Unemployment
- Job Creation and Job Destruction
- 1. Frictional
- 2. Structural
- 3. Cyclical
The Natural Rate of Unemployment
- Unemployment and the business cycle
- Okun's Law
Day 15 PPT - Hyperinflation examples
Thoughts and Questions - Hyperinflation and Fed Funds
Krugman's Chapter 32 PPT
May 20, 2010 Chapter 32: Unemployment and Inflation - continued and Chapter 33: Inflation
- Chapter 32: The Natural Rate of Unemployment
- Unemployment and the business cycle
- Okun's Law
- Labor Market "Rigidities"
- Misperceptions
- Sticky Wages
- Menu Costs
- Phillips Curve
- Phillips Curve - relationship between unemployment and the inflation rate
- Short-run Phillips Curve
- Long-run Phillips Curve - NAIRU
Chapter 33: Inflation, Disinflation, and Deflation
Day 16 PPT - Not Available yet
Krugman's Chapter 33 PPT
Week 7
May 11, 2010 Chapter 30: Money, Banking, and the Federal Reserve System
- Chapter 30: Money, Banking, and the Fed
- Monetary Role of Banks
- What Banks Do
- The Problem of Bank Run
- The Required Reserve Ratio
- Bank Regulation
Day 13 PPT - Notes on Money and Central Banks
Krugman's Chapter 31 PPT
May 13, 2010 Chapter 31: Monetary Policy
- Chapter 31: Monetary Theory
- Opportunity Cost of Money - the "price" (interest rate)
- Two Theories of Money Demand
- Liquidity Preference Theory (Money Demand depends upon the interest rate)
- Nominal versus Real Demand for Money
- Shifts in the Demand for Money Curve: Price Level changes, Technology and Income Changes
- Velocity Approach to Money Demand
- Quantity Equation
- Percentage Change Identity: %M + %V = %P + %Y
- Two Models of Interest Rates? See the Box on page 758!
- Monetary Policy and the interest rate
- Contractionary Monetary Policy
- Expansionary Monetary Policy
- The Effects upon Aggregate Demand
- Fighting a Recessionary Gap
- Cooling an Inflationary Gap
Short Run versus Long Run Effects
Price level effect in the long run on Money Demand, interest rates return and higher costs decrease business firms' supply
Monetary Neutrality
Day 14 PPT - Monetary Policy and money creation
Krugman's Chapter 31 PPT
Week 6
HAPPY VACATION - No classes on Tuesday, May 4 or Thursday, May 6, 2010
Mid-term Exam, Chapters 23 - 29 on Friday, May 7, 2010
From 4 pm to 6 pm
Week 5
April 27, 2010 Chapter 29: Fiscal Policy
- Finish Chapter 29: Fiscal Policy
- Taxes, Purchases, and Transfers
- The Government Budget and Total Spending
- Expansionary and Contractionary Policies
- Lags in Fiscal Policy!
- Day 5 PPT - Public Policies
2. Fiscal Policy and the Multiplier
- Government Spending versus Taxes and their Multiplier Effects
- How Much Bank for the Buck?
- Automatic Stabilizers
- 3. The Budget Balance
- Saving (Borrowing) by the Government
- Cyclically Adjusted Budget Balance
- Should the Budget be Balanced>?
4. Long-Run Implications of Fiscal Policy
- Deficits, Surpluses, and Debt
- Problems With the Rising Government Debt
- Deficits and Debt in Practice?
Day 9 PPT - Not Available yet
Krugman's Chapter 29 PPT
April 29, 2010 REVIEW FOR THE EXAM!!! and Chapter 30: Money, Banking, and the Federal Reserve System
- REVIEW
- Chapter 30: Money, Banking, and the Fed
- The Meaning of Money
- What is Money?
- The Role of Money
- Types of Money
- Measuring the Money Supply
Monetary Role of Banks
Day 10 PPT - Not Available yet
Krugman's Chapter 30 PPT
Week 4
April 20, 2010 Chapter 27: Aggregate Demand and Aggregate Supply continued
- Finish Chapter 27: AD-AS
- The Multiplier
- MPC - The Marginal Propensity to Consume
- MPS - The Marginal Propensity to Save
- Autonomous Aggregate Spending
The AD-AS Model
- Short-run Macroeconomic Equilibrium
- Shifts in SRAS - Short-Run Aggregate Supply
- Stagflation
- Shifts in Aggregate Demand: Short-Run Effects
Long-Run Macroeconomic Equilibrium
- Inflationary Gap
- Recessionary Gap
Are YOU ready for the test?
Day 7 PPT - None made
Krugman's Chapter 27 PPT
April 22, 2010 Finish Chapter 27 and Chapter 28: Income and Expenditure
- Problem Set #2 done in class on April 20, 2010
- Chapter 28: Income and Expenditure
- Consumer Spending
- Consumption Function
- Autonomous Consumption
- MPC times income
- Shifts in Consumption - Changes in Future Disposable Income
- Changes in Aggregate Wealth
Investment Spending
- Interest Rate and Investment Spending
- Expectations
- Inventories
The Paradox of Thrift
Bad Times in Buenos Aires
Day 8 PPT - An Introduction to the Federal Reserve
Krugman's Chapter 28 PPT
Week 3
April 13, 2010 Chapter 26: Saving and Investment continued
- Finish Chapter 26: Saving and Investment
- The Market for Loanable Funds
- Policy 1: Saving Incentives
The Market for Loanable Funds - Continued
- Policy 2: Investment Incentives
- Policy 3: Government Budget Deficits and Surpluses
U.S. Government Debt
Day 5 PPT - Public Policies
Special PPT - Government Budget Constraint
April 15, 2010 Chapter 27: Aggregate Demand and Aggregate Supply
- Chapter 27: Aggregate Demand and Aggregate Supply
- Aggregate Supply Curve
- In the Short-Run slopes upward
- Wage contracts make wages "Sticky" causing the upward slope
- Shifts in AS
- Changes in Commodity Prices
- Changes in Nominal Wages
- Changes in Productivity
- In the Long Run Aggregate Supply is vertical - Called Potential Output
- From the short-run to the long-run
- wages change affecting business costs which affect suppliers and shift short-run AS
The Aggregate Demand Curve
Why the Aggregate Demand Slopes Downward
- Wealth Effect
- Interest Rate Effect
Why the Aggregate Demand Curve Shifts
- Changes in Expectations
- Changes in Wealth
- Changes in the Stock of Physical Capital
- Changes in Government Policies - Monetary and Fiscal Policy
Day 6 PPT - Aggregate Demand Shifts and CPI (US)
Krugman's Chapter 27 PPT
Week 2
April 6, 2010 Chapter 25: Long-Run Economic Growth
April 8, 2010 Chapter 25: Long-Run Economic Growth continued
- Finish Chapter 25: Production and Growth continued
- Differences in Economic Growth Rates
- Saving and Investment
- Human Capital - Education
- FDI and Infrastructure
- R & D, property rights and political stabiility
- Rule of 70
- Convergence Hypothesis
- Real wages
- Malthus - what's a Protestant Minister to say?
- Chapter 26: Saving and Investment
- Basics: Financial Intermediaries, Mutual Funds and Financial Markets - READING!!
- Important Identities: Private plus Public Saving = Investment
- Day 4 PPT - Thomas Robert Malthus - a Classical Economist
- Krugman's Chapter 26 PPT
Week 1
March 30, 2010 Chapter 23: The Big Picture
April 1, 2010 Chapter 24: Tracking the Economy
[Andrew's SILC Home
Page, Shanghai, China] - [Drew's Home Page, United States]
email: andrew at andrewparkes.com
Last Update: March 30, 2010
By Andrew L. H. Parkes, Ph. D.