Notice - Department of Economics Web Site: The Department of Economics maintains a comprehensive web site at http://www.tulane.edu/~economic/ . This should be your first stop for all your economics inquiries. On the web site you will find information about the major, the faculty, and internet resources in economics.  Other important links are Econlit (you are able to download most papers through TU Link from Econlit) and  Economics Research Resource Guide.  The web site for this class can be accessed at http://www.tulane.edu/~msyun/ .

Course Description: This course provides an exposition of modern macroeconomic theory. Theory of national income, employment, and the price level. The role of monetary and fiscal policy in economic stabilization and growth.

• Economic Literacy: Students who complete this course should understand and be able to articulate, both orally and in writing, the core economic principles, concepts and theories that form the foundation of  modern economic analysis and economic research for various economic development issues.

• Economic Numeracy: Students who complete this course should be familiar with the tools, techniques and methods of empirical economics for economic development issues. They should be able to analyze data using computer applications and should be familiar with regression methods and other statistical techniques. They should be able to read and assess general interest articles on economic development issues. In addition, they should be able to understand and evaluate key findings in published economic research from a wide range of sources including academic economists, public policy ‘think tanks,’ and government agencies.

• Economic Citizenship: Upon completion of this course students should be able to apply their understanding of core concepts and quantitative tools to analyze and research real world problems and evaluate alternative economic policy proposals on economic development issues.

• This class provides an understanding of the forces determining the performance of the aggregate economy along a variety of dimensions such as employment and output, interest rates, and inflation. By the end of this class you should have a solid understanding of many (not all!) important concepts and theories in macroeconomics.The main emphasis will be on analytical modeling. Throughout the course we focus on the micro foundations of the big macro picture and combine economic theory and data analysis.
  

• Explain how the main macroeconomics aggregates are calculated and their main limitations.
• Describe the behavior of the economy in the long run. In particular, explain how national income, inflation and unemployment are explained by the classical model.
• Explain what determines economic growth.
• Explain the Solow growth model.
• Describe the golden rule level of capital.
• Use the Solow growth model to compare economic growth across countries.
• Explain the endogenous growth theory.
• Use growth accounting to determine the sources of economic growth.
• Describe the behavior of the economy in the short-run. In particular, explain how national income, inflation, and unemployment are explained by the IS-LM model.
• Explain the role of fiscal and monetary policies in the IS-LM model.
• Explain the aggregate demand (AD) and aggregate supply model (AS).
• Describe the main theories of consumption.
• Describe the main theories of investment.
• Explain the current debate on macroeconomic policies.
  

Program Outcomes: The completion of this course will contribute to the outcomes of the economics major/minor. This course has the following program outcomes;

• Describe and assess macroeconomic data
• Understand how the level and of growth of national income are determined
• Apply mainstream macroeconomic models to explain aggregate income, unemployment, and inflation
• Describe main microfoundations of macroeconomic models
• Assess macroeconomic policy debates

Office Hours: TTh 1:00-2:00 PM or by appointment. Room: Tilton Hall 310, 862-8356.   My email address is msyun@tulane.edu .

Readings: The following should be available at the Bookstores:

Andrew B. Abel, Ben S. Bernake, and Dean Croushore, Macroeconomics (8th Edition), Prentice Hall, 2014.

The etext is available from MyEconLab (http://www.myeconlab.com/, Course ID: yun82443).  Student registration instructions are here.

Though I do not require to read any additional materials due to the reasons noted above, students may obtain interesting insights not offered by the textbook by reading various books, for example, books by Paul Krugman and Joseph Stiglitz among others.  Note that I do not suggest that their view is correct.  There is no shortage of  views on how economies work.   Students are also supposed to keep up with national and international economic conditions and events.  Students may apply theories learned in the classroom to real economies. Some good sources are the Wall Street Journal (http://www.wsj.com ), the Economist (http://www.economist.com ), the Financial Times (http://www.usa.ft.com ) and the New York Times (http://www.nytimes.com ).

The questions at the end of each chapter in textbook are excellent  test of  your understanding of the material.  Please consider the questions in the textbook as your assignments.  Though you don't have to hand in your answers, I highly recommend to do the questions.  The MyEconLab (http://www.myeconlab.com/) also provides numerous questions which will help you understand the material.

Lecture Topics: The following is a list of chapters which will be covered in this class. On some I will go into great detail, others I will but mention in passing.

• Ch. 1.      Introduction to Macroeconomics [week 1]
  
• Mark Killingsworth, A Simple Introduction to Econometrics 
• Nisbet and Vakil, "Some Estimates of Price and Expenditure Elasticities of Demand for Marijuana Among U.C.L.A. Students," Review of Economics and Statistics, 1972, 473-75
• Ch. 2.      The Measurement and Structure of the National Economy [week 2]
  
• Ch. 3.      Productivity, Output, and Employment [weeks 3 and 4]
  
• Ch. 4.      Consumption, Saving and Investment [weeks 4, 5 and 6]
  
• Ch. 7.      The Asset Market, Money, and Prices [weeks  7 and 8]
  
• Ch. 9.      The IS-LM/AD-AS Model: A General Framework of Macroeconomic Analysis [weeks 9 and 10]
  
• Ch. 8.      Business Cycles [week 11]
  
• Ch. 10.    Classical Business Cycle Analysis: Market-Clearing Macroeconomics [week 12]
  
• Ch. 11.    Keynesianism: The Macroeconomics of Wage and Price Rigidity [week 13]
  
• Ch. 6.      Long-Run Economic Growth [weeks 14 and 15]
  
• Ch. 12.    Unemployment and Inflation (if time allows)
• Ch. 14.    Monatary Policy and the Federal Reserve System (if time allows)
• Ch. 15.    Government Spending and Its Financing (if time allows)
  

• Note:  I reserve the right to alter this schedule during the semester. All exams are cumulative. Of course,  new material covered since the last exam (chapters in bold) will be emphasized, but you are responsible for all the material.
• Makeup Policy:  Students who simply do not show up for exams should not expect to be given a makeup.  You should present a valid documentation in order to avoid receiving zero points on the missing exam.
• Extra-Credit Policy: There are no extra-credit assignments. There is no way to ex post improve your grade on an examination. Plan to do well on the required material.

Some Warnings, Advice and Hints:

0. All students are responsible for knowing and adhering to Tulane University’s Honor Code, available at  http://tulane.edu/college/code.cfm.
1. If you are having problems, please seek out help early. Come in prepared, having gone over the lectures, text, and problems in the text. If you have missed any classes, make sure you have gotten the missed notes from classmates. In cases like this, it usually pays to get the notes from at least two of your class mates.
2. Some students slack off. The readings, after all, seem pretty minimal. They aren't! Macroeconomics is deceptive. The only way to learn it is to keep going over it, work the problems in your text, and THINK about what you are doing at each step. I suggest that you first read through the entire book. This will help you to begin to think about macroeconomics. Go over the lectures and think about what problems I raise and what problems are raised in the book. A good exercise is to pick up the newspaper and come up with alternative explanations of various "business" and "economic" news. Furthermore, let me urge you to read as much of the material as possible early on in the course. You will find this will help you develop a perspective on the course material and lead to a better understanding of macroeconomics.
3. Do not wait until after I have lectured on something to read the material work on it yourself. Come to class prepared !
4. The emphasis in this class is on developing your ability to apply analytical techniques and on your understanding of fundamental concepts. Exams will emphasize this. They will not test whether you remember what the balance of trade for the U.S. was in 2010. They will assume you have a complete understanding of the lectures, text and study guide, and will ask you to apply what you have learned to "new" circumstances.
5. The course material builds on earlier work. It is essential that you master every part of the material. I will integrate the material as we go along, but you will be ahead of the game if you make extended efforts to learn and integrate it yourself.