Parkes' Macroeconomics Assignments Page, Fall 2011
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Page, Shanghai, China] - [Drew's Home Page, United States] - [U.S. Small Business Resources]
Tentative Schedule and Course Assignments:
Final Exam, Chapters 23 - 35 on Thursday, November 17, 2011
From 8:15 am to 10:15 am:
Class 2003 in Room 2111, Class 2004 in Room 2112, Class 2005 in Room 2103
PAST ASSIGNMENTS:
- 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
- The Role of Exchange Rates
- Understanding Exchange Rates
- The Equilibrium Exchange Rate
- Shifts in Demand
- Today's Discussion of Liquidity Trap, Deflation, and the Fed's $600 Billion "QE2" increase in the Money Supply:
- U.S. Treasury Department's Quarterly Refunding (of the Government - i.e. BORROWING) Statement
- Refunding over $13 billion of maturing securities and new funding of over $58 billion
Day 18 PPT - None Made
Krugman's Chapter 35 PPT - Second Edition
November 10, 2011 Chapter 35: Open Economy Macroeconomics
- Finish Chapter 35: Open Economy Macroeconomics
- 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 - None Made.
Krugman's Chapter 35 PPT - Second Edition
Week 9
November 1, 2011 SPECIAL SECTION! Chapter 10: ISLM - HANDED OUT IN CLASS
- Chapter 31: Monetary Theory - continued
- 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
Chapter 10: ISLM
Determination of interest rates
- Affect upon the economic goals
- Monetary Policy in the ISLM framework
- Fiscal Policy in the ISLM framework
Problem Set 6 - ISLM determination of interest rates
Krugman's Chapter 32 PPT - Second Edition (OUR Chapter 33)
Day 16 PPT - Review of Monetary Policy
November 3, 2011 Chapter 33: Inflation, Disinflation, and Deflation
- Monetary 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
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
Krugman's Chapter 33 PPT - Second Edition (Like our Chapter 34)
Day 17 PPT - Thoughts and Questions
Week 8
October 25, 2011 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 14 PPT - Notes on Money and Central Banks
Krugman's Chapter 30 PPT - Second Edition
October 27, 2011 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!
Problem Set 5 - IS adding interest rates to Investment Spending
Krugman's Chapter 34 PPT
Day 15 PPT - Monetary Policy and money creation
Krugman's Chapter 31 PPT - Second Edition
Week 7
October 18, 2011 Chapter 29: Fiscal Policy
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 12 PPT - U.S. Current Spending and Taxes
Krugman's Chapter 29 PPT, 2nd Edition
October 20, 2011 REVIEW 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 13 PPT - Review answers.
Krugman's Chapter 30 PPT, 2nd Edition
Week 6
October 11, 2011 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 9 PPT - None Made
Krugman's Chapter 27 PPT - Krugman's Chapter 28 PPT - 2nd Edition
October 13, 2011 Finish Chapter 27: Aggregate Demand and Aggregate Supply
- Chapter 27: Aggregate Demand and Aggregate Supply
- From the short-run to the long-run
- wages change affecting business costs which affect suppliers and shift short-run AS
- Shifts in AS
- Changes in Commodity Prices
- Changes in Nominal Wages
- Changes in Productivity
- 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 10 PPT - Aggregate Demand Questions and Answers
Mid-term Exam, Chapters 23 - 28 on Friday, October 14, 2011
Also study the Solow Growth Model
Week 5
WEEK 5: October 1 - 7, 2011 Happy Anniversary of the People's Republic of China
- NO CLASSES UNTIL TUESDAY, OCTOBER 11, 2011
Week 4
September 27, 2011 Finish Chapter 26 and Begin Chapter 28: Income and Expenditure
- Problem Set #3: TURN IN THREE POLICY GRAPHS (10 points) - Savings Tax Incentive, Investment Tax Credit and Government Budget Deficit
The Graphs we began last class.
Real wages
Malthus - what's a Protestant Minister to say?
- Chapter 28: Income and Expenditure
- Autonomous Aggregate Spending (AAS or called Aggregate Expenditures (AE)
- Consumer Spending
- Consumption Function
- Autonomous Consumption
- MPC times income
Shifts in Consumption - Changes in Future Disposable Income
Changes in Aggregate Wealth
Day 7 PPT - Government Budget Constraint
Krugman's Chapter 28 PPT - Krugman's Chapter 27 PPT - 2nd Edition
September 29, 2011 Finish Chapter 28: Income and Expenditure
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
Day 8 PPT - Stock Market Indexes - S&P 500 and NASDAQ
Krugman's Chapter 28 PPT - Krugman's Chapter 27 PPT - 2nd Edition
Week 3
September 20, 2011 Solow Growth Model and Chapter 25: Long-Run Economic Growth continued
September 22, 2011 Chapter 26: Saving and Investment
- Due Today, Problem Set #2 - Solow Growth Model - 10 points.
- Chapter 26: Saving and Investment
- Basics: Financial Intermediaries, Mutual Funds and Financial Markets - READING!!
- Important Identities: Private plus Public Saving = Investment
- The Market for Loanable Funds
- Policy 1: Saving Incentives
- Policy 2: Investment Incentives
- Policy 3: Government Budget Deficits and Surpluses
- Problem Set #3 - Begun In Class
- U.S. Government Debt
Krugman's Chapter 26 PPT - Krugman's Chapter 26 PPT - 2nd Edition
Day 6 PPT - Public Policies
Week 2
September 13, 2011 Chapter 25: Long-Run Economic Growth
- Problem Set #1 - Due today!
- Homework for next class - 3 goals, indicators and values for the U.S. AND China
- Chapter 24 - continued
- NIPA - National Income and Product Accounts
- Calculate Components
- Calculate Growth Rates - Real GDP and Gov't
- Calculate PCE and GDP deflator growth rates
- Real wages - with and without inflation and wage raises (quiz)
- Read Chapter 25 about Long-run economic growth
- Productivity - A key determinant of a country's standard of living
- Productivity is defined as output per worker
- Capital per worker
- Technology
- Human Capital
- Diminishing Returns
- Rule of 70
- Convergence Hypothesis
- Day 3 PPT - Some Chinese Values (numbers) for the 3 Goals
- Krugman's Chapter 25 PPT - 2nd Edition
September 15, 2011 Chapter 25: Long-Run Economic Growth continued
- Continue to Read Chapter 25 about Long-run economic growth
- Productivity - A key determinant of a country's standard of living
- Productivity is defined as output per worker
- Capital per worker
- Technology
- Human Capital
- Diminishing Returns
- Differences in Economic Growth Rates
- Saving and Investment
- Human Capital - Education
- FDI and Infrastructure
- R & D, property rights and political stabiility
- Convergence Hypothesis
- Malthus - what's a Protestant Minister to say?
- Day 4 PPT - Solow Growth Model
- Solow Growth Model, as shown in class today
Week 1
September 6, 2011 Chapter 23: The Big Picture
September 8, 2011 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: October 16, 2011
By Andrew L. H. Parkes, Ph. D.