ECO 3202 Applied Macroeconomics

Summer 2007

Dr. Cem Karayalcin

Office DM 319A

Office hrs: M-W 1:00-2:00

e-mail: karayalc@fiu.edu

webpage: www.fiu.edu/~karayalc

This course is designed to further the understanding of macroeconomic phenomena. The course teaches how to interpret business cycles, inflation and government policies that affect the macroeconomic environment. On the theoretical side, the course introduces both the conventional Keynesian theory and monetarism as well as the more recent approaches, such as rational expectations, and real business cycle analysis.

Textbook:  The textbook for the course is Macroeconomics (6^th edn) by Gregory Mankiw. It is available in the University Bookstore.

Exams

Midterm and Final Exams:

Material to be included in each exam is to be announced in class.

Midterm: July 16, 2007 (weight 40%)

Final exam: August 8, 2007 (weight 60%)

Grading Scale:

100 – 90      A

89 – 80        B

79 – 70        C

69 – 60        D

59 – 0          F 

Pluses and minuses will be given at the instructor’s discretion. 

General Notes: THOSE THAT ARE NOT PRESENT FOR AN EXAMINATION CAN EXPECT A FAILING GRADE FOR THAT EXAM. NO EXCEPTIONS.  THERE WILL NOT BE ANY MAKE-UP EXAMS OR EXTRA CREDIT WORK FOR MISSED EXAMS.     

Grades are available to students via web and at kiosks.(Please do not request grades via email, as they will not be provided)

ANSWERS TO MIDTERM

GRADES FOR MIDTERM

ANSWERS TO FINAL

GRADES AND CURVE FOR FINAL

READINGS

I. Introduction

Macroeconomic phenomena; looking around and identifying macro problems in the world; aggregate output and income; the unemployment rate; inflation; deficits.

1. Chapter 1

Reading 1

2. Chapter 2

Reading 2

II. The Core Macroeconomic Problems

The goods market; GDP; consumption; investment; government spending; equilibrium; production and sales; financial markets; money; interest rates; the banking system; the Federal Reserve; the open economy.

1. Chapter 3

2. Chapter 4

Link to US September PPI News

Link to Social Security Payments

3. Chapter 5

Link to the Prospects for the World Economy

Link to Insourcing

Link to Drop in US Home Prices

4. Chapter 6

Trichet vs Sarkozy

III. The Short Run

The natural rate of unemployment; aggregate supply; aggregate demand; monetary policy; fiscal policy; changes in the price of oil; IS-LM, exchange rates, the Phillips curve.

1. Chapter 9

Link to Price Stickiness

2. Chapter 10

Link to October Surprise

3. Chapter 11

4. Chapter 12

Dollar Loses Value

Productivity Growth Slows Down

5. Chapter 13

IV. Policy Debates

Stabilization policy; government debt; rules vs discretion.

1. Chapter 14

2. Chapter 15

V. The Long Run (time permitting)

Facts of growth, saving, capital accumulation and output.

1. Chapter 7

2. Chapter 8