1:00-2:15P   TR   SE 010

Course Objectives: Macroeconomics studies economy-wide phenomena. Of
course, economy wide phenomena can only be understood if we understand how
individuals make decisions. In Macroeconomics we thus have to aggregate up
individual decisions. In other words, we need to know Microeconomics
before we can do Macroeconomics. That makes Macro a bit more challenging,
but ultimately much more fun than Micro.
	The phenomena we study include differences in wealth across
countries, why some economies grow and develop so much faster than others,
how many new jobs are created, why some jobs disappear, and how the price
level changes.
	The phenomena we study emerge from interactions of consumers,
firms and various governmental agencies. Since government is one
player/decision maker in the economy, it might be able to influence
economic outcomes, both in a positive or an adverse way. This class will
stress how government policy influences economic outcomes. This class will
also provide criteria, which will enable us to study whether particular
government policies are desirable.
	This course will attempt to merge analytical/theoretical tools of
modern macroeconomics with analysis of macroeconomic data. It is not the
purpose of this class to help you understand what is going in Greenspan's
mind (I wish I knew). Nor is it the purpose of this class to help you get
rich (quick). The purpose of this class is to give you tools that you can
use to understand important economic phenomena.
Grading: Grades will be based on three exams (including the final exam),
homework, a small project, a larger project and class participation. There
will be five homework sets. You have at least one week for each one of the
homework sets. The weight on the homework sets is 15% in the computation
of the course grade. The weights on the in-class exams (mid-term) is 15%
each, the weight on the final exam is 30%.
	The small project is called News, Weather and Sports. Each one of
you will report on important breaking Macroeconomic News. (Here is your
chance to impersonate Dan Rather.) In your economic news report include
what? Where? When?, include a brief interpretation of the news, and if
there is a controversy surrounding the news, include a brief description
of the controversy. Include a brief (one sentence) weather forecast for
the place. Finally, tell us about a sports event that includes the IU
Hoosiers, either an outcome of a recent competition or an upcoming game
(in one sentence or two). Of course, I want you to concentrate on the
Macroeconomic News. The entire report should not exceed 4 minutes. I will
hand out a schedule for News, Weather and Sports soon. The weight on the
small project is 5%.
	The large project is your group project which you are asked to be
a Macroeconomic sleuth. I will ask you to collect data that might be
puzzling, and solve the puzzle by using models and knowledge from class,
or find data to confirm or refute a hypothesis. I will give you precise
instructions with the group assignments about 3 weeks before the project
is due. The large project is worth 20% of the course grade.

Dates:
Homework #1 Due		January 23 at beginning of class
Homework #2 Due		February 13 at the beginning of class
Exam 1			February 22 in class
Homework #3 Due		March 8 at the beginning of class
Homework #4 Due		March 27 at the beginning of class
Exam 2			April 5 in class
Homework #5 Due		April 18 at the beginning of class
Large Project Due	April 26 at beginning of class
Final Exam		May 3, 12:30 to 2:30 PM

No late assignments will be accepted. There will be no make-up exams. If
you miss an exam with a valid excuse, I will average your scores over the
remaining exams. Valid excuses include own illness, death or life
threatening illness in the immediate family. Family reunions, prepaid
airline tickets do not constitute a valid excuse for missing an exam. If
you have to miss an exam, I want to be notified before the exam. In case
of an illness proper documentation signed by the attending physician is
required.

Course Outline:
(i) Introduction: What is Macroeconomics? How do Macroeconomists do their
thing? Chaper 0.
(ii) Markets for beer and pizza and other consumption goods. Chapter 1.
(iii) Input markets. Chapter 2.
(iv) Credit markets. Chapter 3.
(v) Markets for financial assets. Chapter 3.
(vi) National income Accounting and other measurements issues. Chapter 4.
(vii) Economic Growth. Chapter 5.
(viii) What goes up must come down? Business Cycles. Chapter 6.
(ix) Labor markets (again) and unemployment. Chapter 7.
(x) Fiscal policy. Chapter 8.
(xi) Money. Chapter 9.