St. Francis Xavier University



St. Francis Xavier University

Department of Economics

ECONOMICS 202:12

Intermediate Macroeconomics I

Dr. J. Amoako-Tuffour Sept. 2007-December 2007

Office: NH310

Office Hours:

Class: NH21 HJ/JH Block : M, W (3:45-5:00)

I: COURSE OVERVIEW

Macroeconomics is concerned with the causes of changes in the level of and the fluctuations in economic activities, the consequences of the changes, and what can be done about them to improve the economic living standards of citizens. To this end, macroeconomics focuses on the big issues such as inflation and unemployment, national income or output, money and interest rates, deficits and public debt, trade and balance of payment, business cycles and economic growth.

The goal of this course, the first of a two sequence intermediate macroeconomics courses, is to introduce students to (a) the building blocks in understanding how the macroeconomy works, (b) the interrelationships among the key macroeconomic issues; (c) the tools that economists use to interpret, analyze, and even predict macroeconomic issues in the very long run and the very short run.

A common problem for beginning economics students is how to apply the rich set of tools and concepts that you learn in the course. We hope to overcome this by drawing on a number of real world issues that appear daily in the Globe and Mail, the Economist Magazine and other news magazines. The setting of the course is the Canadian economy. But the concepts are universal. Our focus shall remain on the mastering of the tools and the steps of analysis that are needed in the process of learning and practicing economics everywhere.

II. Student Assessment

|Assign/Quiz/Exam |Weights | |

|Assignments (3) |20% | |

|Quizzes (2) |35% | |

|December |45% | |

| |Out Date |Due Date |

|Assign 1 |Week 2 | |

|Assign 2 |Week 6 | |

|Assign 3 |Week 9 | |

| | | |

|Quiz 1* | |Week 5 |

|Quiz 2 | |Week 10 |

|December Exam | |TBA |

|* All quizzes and the final exam will consist of multiple choice questions, explanation of concepts, and short |

|answer/ problem solving questions using diagrams, simple arithmetic, explanations. |

In addition to the hand-in assignments, there will be problem sets designed to encourage self-study and applications of the concepts learnt in class. These problem sets will be posted on the web at Econ 202 Intermediate Macro I

Class Attendance: Please read St. F.X Academic Calendar Section 3.8 (p.13)

III. TEXTBOOK(S)

• N. Gregory Mankiw and William Scarth, Macroeconomics 3rd Canadian ed., 2008, Worth Publshers. (M&S)

• Andrew Abel, Ben S. Bernanke, Gregor W. Smith, and R.D. Kneebone Macroeconomics, 3rd Canadian Edition, 2003 Addison Wesley (Abel et. al.) A copy of this book is available on Reserve.

Web Resources

• Check the Pulse of the Canadian Economy and Economic Analysis and Statistics from Statistics Canada

• About Canadian money matters and the performance of the Canadian economy as seen by the Bank of Canada.

• Find out about what the Bank of Canada staff is doing about macroeconomic policy research. Economics 202 is the foundation for this kind of stuff.

•

• provides free access to all the main economic indicators for the past few years.

• Ministry of Finance

• Several of the large chartered banks provide summaries of developments in the Canadian economy. My favourite is the Bank of Montreal site.

• Organization for Economic Cooperation and Development ( OECD)

• Bookmark this site for your regular weekly visits. Economics Everyone

Follow the link below and read up on key economic concepts as compiled by Statistics Canada. This is especially helpful for those who may have taken Economics (100) 0r 101 & 102 some years back.

•

IV: DETAILED COURSE OUTLINE

(Keep in mind that some material may be added as the course progresses)

1. Introduction

a. What macroeconomics is about

b. Macroeconomic facts of the Canadian economy

c. Schools of Thought in Macroeconomics – central messages

•

•

Follow the link below and read the quarterly developments in the key macroeconomic indicators of the Canadian economy.

•

• M&S Ch. 1

• Abel et. al Ch. 1

• Class Discussion: Abel et. al. p. 21 Analytical Questions #1, and 2.

d. Measuring the performance of the Canadian economy

• M&S Ch. 2 & 3 Review Problem p. 41 #7.

• Abel et. al Ch. 2 pp. 52-53 Numerical Problem #3.

• National Income Accounting in Coccusland (handout)

2. The Classical Steady State- The Economy in the Long Run-Productivity, Output and Employment

a. Production function and the Aggregate Supply of goods and services

b. Competitive Labour Market

c. Unemployment

• M&S Chs. 3, 6 (pp. 166-186) Review Problems pp.77-79 #1, 11

Follow the link below and read about Canadian labour market, recent trends in employment, family working status and unemployment.

•

3. The Classical Steady State Continued- The Asset Market, Money and Prices

• M&S Ch. 4

4. Open Economy: More on National Accounts- Balance of Payments and Exchange Rate

• M&S Ch. 5 (Problems: Page 78 #9, Page 157 #2)

• Abel et. al Ch. 5 (See Review Questions and the Numerical Problems pp. 194-196. Do Analytical Problems #1, #3.)





5. Business Cycles and Patterns in Macroeconomic Data, Business Cycles & and the AD-AS model

• M&S Ch. 9

• Abel et. al Ch. 8

•

6. The Closed Economy in the Short Run- The Essence of Keynesian Economics

a. The Building Blocks of the Aggregate Demand side of the Economy

b. The Concept of Multipliers

c. The Concept of Macroeconomic Equilibrium

d. The Goods Market and the IS Curve

e. The Money Market and the LM curve

f. The Concept of Equilibrium in Goods and Money Markets – The IS-LM Model

g. Monetary and Fiscal Policy in the Short Run – Putting the IS-LM to work

• M&S Ch. 10-11

• Abel et. al Ch. 9



7. Macroeconomic Policy Debate: Stabilization

• M&S Ch. 14

• Abel et. al Ch. 14

8. Government Spending and its Financing (Time permitting)

• M&S Ch. 15

• Abel et. al. Ch. 15

What Can I Do

With An Undergraduate Degree in Economics?

Although economics is based on a common theoretical core, foundations if you like, there are various areas of specialization if you study the subject to a higher level.

• Economics 101/102,

• Economics 201/202,

• Economic 301/302, and

• Economics 401/402

provide a sequence of the core of economics throughout our program. At every level throughout the program you are introduced to more and more advanced topics and applications of the core subject areas of Microeconomics and Macroeconomics. These two strands will introduce students to all the various of economics including:

• Money and Banking

• Financial Economics

• International Trade and Finance

• Public (Welfare) Economics

• Public Finance –Taxation and Expenditures

• Development Economics

• Industrial Organization

• Health Economics

• Labour Economics

• Environmental and Natural Resource economics

• Economic History and Political Economy

• Agricultural economics

• Urban and regional economics

• Game Theory

• Econometrics

• Mathematic Economics

Economists are employed by governments, banks, industry and a wide range of other national and international profit and nonprofit organizations.

Individuals with a strong economics background are also particularly suited for careers in law, politics, Foreign Service, and teaching. Indeed students in other disciplines such as business administration, political science, sociology find that economics enriches their understanding of their own fields.

For more explorations of economics career paths, check out the following sites.

Bank of Canada



Statistics Canada



Ministry of Finance



Other Career Guide Websites for Economists

Economics Career Exploration Panel

What Can I Do Economics

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