Honors | Introduction to Macroeconomics - Honors
S202 | 1596-1597 | Glomm


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
	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

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   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.