ECO 320L • Macroeconomic Theory
9:30 AM-11:00 AM
This course is about national income, its growth and fluctuations. It begins with a discussion of national income accounting and measurement of the general price level. There follows an extensive and technical description of the standard growth model and its extensions to represent the long run. A typical question pertaining to this topic is "Why do some nations grow faster than others?" Arguably, growth theory can be considered the most important topic in macroeconomics and, definitely, it is less controversial than the theories that deal with economic fluctuations over the short and inter-mediate runs. Understanding why there is controversy is the main goal of the course. Answers to macroeconomic questions are treated with less emphasis than how those answers are derived. Accordingly the course could be called, "A Course in Macroeconomic Reasoning." The instructor develops his own open-economy model to deal with short and intermediate fluctuations in the economy. This model is an extension of the IS-LM framework to include a production sector and an international trade and finance sector. The model is useful in explaining the economic effects of the attack on Twin Towers and government. However, it is hoped that students who understand the model will be able to use it to explain many economic questions that arise in ordinary discourse. While there is a textbook in the course emphasis will be placed on classroom lectures.