Honors | Intro to Macroeconomics: Honors
S202 | 1597 | Leeper, E


11:15A-12:30P MW    BH 237

Macroeconomics studies economy-wide phenomena. These include how fast the
economy grows, how many new jobs are created, and how overall prices will
change. The phenomena emerge from the interactions of consumers, producers,
financial market participants, and governments. Government policies
initiated by the President, Congress, or the Federal Reserve profoundly
affect your economic well being. Fiscal policy determines your tax bill and
how big a player the government is in the economy. Monetary policy
influences interest rates charged on credit cards, student loans, and car
loans. Taken together, monetary and fiscal policy strongly affect employment
prospects and inflation. A sample of the questions this course addresses
is: What are the sources of long-term economic growth?

Why do countries regularly experience episodes of expansion
and recession?

What causes inflation and why do some countries suffer from
very high inflation, while others get by with little?

How do policy decisions affect the likelihood that you will
find and keep a job? How do they influence your take-home pay?

How do banks and other financial institutions fit into the
macro economy?

Why does the Federal Reserve feel the need to "slowdown"
a rapidly growing economy?

How does the federal government plan to pay off the debt
it incurs through budget deficits?

Are trade deficits bad?  Is a strong currency good?

This course will introduce students to the analytical tools
macroeconomists use to address questions like these; The tools include basic
models of how goods markets, labor markets, and financial markets interact
to determine overall economic performance; We course also discusses current
economic events.

An important aspect of understanding the macro economy
is familiarity with macroeconomic data; Some assignments will involve
finding recent macro data on the World Wide Web; Several relevant links to
data sources are available from my home page at

Another important aspect of learning about the macro economy is staying
abreast of current economic developments; To that end, student are expected
regularly to read a reputable source for economic news and analysis; Some
suggestions of such publications are the Wall Street Journal, The New York
Times, The Financial Times, and; The Economist (a weekly magazine); I will
occasionally hand out copies of articles about current macroeconomic events;
Some of the articles will be discussed in class.

The course culminates with a mock Federal Open Market Committee (FOMC)
meeting of the Federal Reserve System; The FOMC is the policymaking arm of
the Fed and meets every six weeks to decide how to set the short-term
interest rate; Students play the roles of Federal Reserve officials and use
Federal Reserve web sites to obtain information about the macro economy; The
meeting ends with a formal vote on the setting of the interest rate; This
exercise pulls together all the material learned during the semester.

The textbook is Introduction to Macroeconomics by Alan C. Stockman. The
author is a leading macro/international economist in the United States. His
text is very modern and carefully written, and it contains a fair amount of
actual economic data.