Bettina Berch
A Sample Syllabus
Macroeconomics
Our course in macroeconomics falls into three main sections.
In the first section, we explore some basic concepts of economics, like scarcity and rational decision-making, as well as some basic models: the circular flow, the production possibilities model, and the supply and demand model.
In the second section of the course, we look at the building blocks of macroeconomics: GNP, the price level, employment, growth, banking, etc.
In the third and final section of the course, we build our aggregate model of the economy and explore the policy tools that emerge from it. We conclude with a look at the world economy–exploring trade issues and development.
In the end, you should learn
- The basic tools of economics
- How economists use those tools to analyze economic affairs
- How you can use these tools to understand the economic world around you
Evaluation and Requirements of Students
–Exams
15% First Exam
15% Second Exam
25% Final Exam
–Written Work
30% Assignments
In assignments, you will find a link to a chapter to read and a prompt to respond to. At the end of the first, second and third sections of the course, your work will be graded on a 4.0 -> 0 scale.
–Panel Presentation
15% Every student has been assigned to make a panel presentation during a particular class session, usually with one or two other students. Each of you will prepare an approximately five minute video or powerpoint (or other format) presentation based on some of the assigned readings for that session. In effect, you are teaching the class. During breakout sessions in the first part of the course, you will meet with your fellow panelists to plan your presentations, so you do not repeat each other. However, you do not have to work with each other on the actual presentations, and you are only graded on your own work. Students who CHOOSE to work together will each receive the same grade on their project.
How These Components are Evaluated
Exams:
On exams you are assigned points for correct answers. Exams draw heavily on material taught in class, so students who miss a lot of classes, or who attend ‘in name only’ may have difficulties doing well on exams.
Presentations:
Did you prepare your panel presentation on time? (This is important since you and your panel-mates are teaching the class a particular subject on a particular day. Offering to present later does not do your fellow students much good.)
Did you present the correct material? (that is, either material listed for your panel or an alternative approved by the professor in advance?)
Did you understand the material you were presenting?
Did you help students understand this material as well?
Assignment Entries:
Have you kept making entries throughout the semester? Do your entries show that you really read the assigned material? (Note: if you used an artificial intelligence engine to write your responses, you receive zero credit; it’s not YOUR work.)
Students often ask about extra credit. This semester, I will give “extra credit” based on your participation in class sessions. Regularly attending class with your camera ON will earn you some extra credit; being an active class participant (reporting on breakout discussions, asking/answering questions) can earn you even more!
Schedule of Class Topics
Macroeconomics: Economics 201
- Introduction to course structure
In this opening session we meet each other and go over the structure of the course. Notice that we have 3 exams weighted with more importance as the course progresses. You have also been assigned to a panel on a particular date and theme. So you have work to do as a panelist, and as a regular discussion participant.
Please visit the Panel Page (located in Course Information) and find which panel you have been assigned to, see the names of your co-presenters and your theme. You will be meeting with this group next session.
2. Welcome to economics
Economics, like other disciplines, has a central organizing concept: scarcity. That seems reasonable…until we explore it a bit more, and then we wonder: are the important things in life really scarce? Before coming to class today, please visit the Panel Page (located in Course Information) and find which panel you have been assigned to, see the names of your co-presenters and your theme. You will be meeting with this group in today’s session.
- Scarcity, Choice, and Rational Decision-making
Traditionally, economic theory is based on the idea of the rational ‘economic man’ who makes decisions based on the costs and benefits of every choice. But is that how we decide things? Is it good enough to pretend we act as if that is true?
- The Demand and Supply Model
The most famous economic model is the ‘demand and supply model.’ We develop its most basic version: demand and supply in ‘perfect competition.’ We define what markets are, what perfect competition is, and what it means to be a ‘price taker.’
- Elasticity & Welfare Analysis
Now that we have our demand and supply model with its equilibrium, we look more closely at the shape of the curves (elasticity) to see what insights their steepness or flatness offer. We then use ‘welfare analysis’ to understand some hidden benefits (consumer surplus, producer surplus) of that equilibrium price.
- Government Roles: Price Ceilings and Price Floors
This is our first of three sessions on proper roles of the government in the economy. Here, we examine what happens when the government puts a maximum on a price (a ceiling) or sets a minimum price (a floor), when it is effective (binding) and what happens to these markets.
- Government Roles: Market Failure and Criminal Justice
We continue looking at appropriate roles for the government in the economy. Understanding that private enterprise can impose costs on society from its activities (externalities) we look at situations where the government corrects the market.
- Government Roles: Taxation and Addressing Income Inequality
Finally, governments levy taxes to finance the services they provide (education, infrastructure, etc). Governments also redistribute tax revenues to address inequality.
- First Exam
- Defining GNP
We are starting the real “macro” part of the course, so first we define key concepts.
The most basic is GNP (or GDP) which is defined as the “market value of ‘all’ final goods and services produced within an economy in a given period of time.” We need to examine each part of that definition to understand its importance.
- Interpreting GNP
Now that we understand how GNP is defined, we can explore its usefulness as a concept. We’d like to be able to measure how well an economy was performing over time, or compared to other economies. Is this what GNP actually does?
- Measuring the Price Level
We have a problem. If our GNP is 10% bigger this year than last year, does that mean we have 10% more stuff to play with? Or does it just mean the price of everything went up by 10%?
- Unemployment: How It Is Defined and Modeled
The person on the street thinks you are unemployed if you don’t have a job. But that’s not how economists define unemployment. So now we look closely at who is included and excluded from these figures.
- Unemployment and the Future of Work
Does Automation Mean a Jobless Future? If so, what will we live on?
- Production and Growth
Remember the production possibilities frontier from the first sessions? We saw that pushing the frontier outward was a way of showing economic growth. Now we look at growth and what determines it. We start with the production function, which is like a ‘recipe’ for the output of the economy. Then we examine what happens to output when we increase the various inputs. In particular, we are interested in what stimulates technological change, or inventions, or creativity. Do patents and copyrights play a role? What about open source?
- Tools of Finance: Stocks, Bonds, Mutual Funds, Insurance
If investment in human and physical capital is a route to growth, we need to see how funds are channeled into such capital formation. How does cash get from your wallet to a business that wants to expand? Financial intermediaries!
- The Market for Loanable Funds/Alternatives
Economists model the market for loanable funds, showing the supply of these funds (your personal savings and government budget savings) and the demand for such funds (from businesses wanting to expand, to invest in capital formation). This model determines an equilibrium real interest rate and a quantity of loanable funds.
We also consider economies where there is no interest rate because interest is NOT charged, the world of Islamic, or sharia-compliant, finance. How does that work?
We also consider informal systems for raising funds for investment without interest charges, and new ways of financing student loans.
- Second Exam
- Money: What It Is, How It Works
Finally, it is time to talk about money—what it is… and isn’t. We consider the different types of money, liquidity, and how fractional reserve banking works.
- The Federal Reserve
The “Fed” was established early in the 20th century as America’s central bank. It regulates and stabilizes the banking system and formulates monetary policy.
- Monetary Policy, and Inflation
We explore the policy tools the Fed uses (setting the reserve requirement, setting the discount rate, performing open market operations). What are the problems created by inflation or deflation?
- The Future of Money
Now that we understand the role of money a bit more, we need to think about how money is changing. Globally, a lot of people have no access to banks (the “unbanked”) so new types of money (m-pesa, for example) have been invented. People who wanted more anonymity and less government regulation with their transactions have invented various cryptocurrencies, like Bitcoin, to serve their needs. How do these work (and not work)?
- Building the Aggregate Model of the Economy: aggregate demand, short run aggregate supply and long run aggregate supply
Now that we have examined some key concepts (GNP, CPI, full employment, growth, the money supply) we can put our aggregate model together. The aggregate model, with the price level on the vertical axis, and real output on the horizontal axis, is saying that nominal variables CAN affect real variables, and this is a very neo-classical view.
Notice that in our aggregate model, we are relating changes in the prices of ALL goods and services to the quantities of ALL things being produced. Unlike the simple S & D model at the beginning of our course, there’s no way to ‘substitute-away’ from a good that has become more expensive. Everything is more expensive. We also introduce a time dimension now—a short run and a long run on the supply side.
- The Aggregate Model: Equilibrium and Automatic Stabilizers
Now that we have our aggregate curves, we need to understand the equilibrium positions we have reached. We need to interpret the graphs.
- The Aggregate Model: Discretionary Policy (Monetary and Fiscal Policy)
- International Trade: In theory, great. In reality, there are problems…
Why are economists in favor of free trade (as few barriers to trade as possible)? To understand this position, we look at the theory of (absolute) and comparative advantage, which says that when countries specialize in what they do best and trade with each other, world output increases. So, first we explore the theory, and then examine real-world outcomes.
- Globalization, a good thing?
In the modern world, companies are multinational and supply chains are sourced all over the world, with different pieces processed in different countries. This is a different reality than the simple comparative advantage model, of one country trading beef for cars. Also, what is the relationship of globalization to global warming?
- Development Economics
The field of development economics brings together insights from studying economic growth, the role of government in an economy, trade issues, and more. A basic concern for global social justice brings many economists to the development field, yielding a variety of different approaches.
Final Review
- Final Exam
Sample Panel Assignments Page
Panel Assignments
You have been assigned to a panel on a particular theme, on a particular date. On that class day, everyone in the class (you included) has been assigned some basic readings. But the panel has some extra readings that they have prepared, to teach the class some new perspectives. (Please do NOT use panel time to repeat what everyone in the class has learned from doing the assigned homework.)
Each panel has 2-3 topics listed, with your source material also listed. You pick ONE of these! You don’t duplicate! You USE the source material that’s indicated to prepare your presentation (not something you happened to find on the internet).
Sometimes there are 1 or 2 panelists assigned, sometimes 3. Sometimes 2 students are assigned and 1 drops the course. It is NOT your problem. You are only responsible for YOUR theme/topic/source material, and for not duplicating someone else on the panel. EACH PERSON GETS ONE TOPIC FOR JUST THEMSELF, even if that means some topic isn’t covered by anyone. When panel members meet early in the semester, in Zoom class breakouts, they should decide which panel member will take which topic.
Latecomers to the course will have to accept whatever topic the others have left for them. Most of the time, each student works and presents on their own. Sometimes the students on a panel decide to collaborate and present jointly—that’s up to you!
Each panel relates to the theme of the class for that date. Students will present for up to 5 minutes EACH, by sharing their screen with the rest of the class. You are free to make powerpoints or videos, or to give a short lecture.
If you don’t do your panel presentation, you get a 0 (zero) for 15% of your total grade (unless you have spoken with the professor BEFORE that date and some alternative arrangement has been made).
Do not ask to present your work a few days or weeks later—the class will have already moved on to other themes. If you have been assigned to a panel and you have not done the work, DO attend class anyway, so you don’t lose even more ground.
Panel #1: Government Roles: Criminal Justice
a) The ‘convicted’ and their debt: LFOs (legal financial obligations)
https://www.americanbar.org/groups/litigation/resources/newsletters/childrens-rights/criminalizing-poverty-through-fines-fees-costs/
https://www.aclu-wa.org/questions-and-answers-about-legal-financial-obligations-lfos
b) Some propose reforming the criminal justice system by getting rid of cash bail, would this be a good idea?
https://ctmirror.org/2019/12/06/state-considering-alternatives-to-unjust-cash-bail-system/
https://www.americanprogress.org/article/the-case-for-cash-bail-reform/#:~:text=Cash%20bail%20is%20a%20source,the%20resources%20to%20afford%20necessities.
c) Using prisoners as a cheap work force
If above article is not available, use this:
https://www.aclu.org/wp-content/uploads/publications/2022-06-15-captivelaborresearchreport.pdf
Panel #2: Government Roles: Taxation and Addressing Income Inequality
a) INCOME inequality in America and what could be done about it? (this presenter should go first)
https://www.cfr.org/backgrounder/us-inequality-debate
b) WEALTH inequality (and that buzzword ‘generational wealth’)
https://www.stlouisfed.org/on-the-economy/2021/january/wealth-gaps-white-black-hispanic-families-2019
c) Cut tax rates and raise tax revenues? The “magical thinking” of the Laffer curve, explained
https://www.youtube.com/watch?v=Man2ObWWSgc
Panel #3: Interpreting GNP
WARNING: do not stand up and tell the class what GNP and GDP are/we have already covered this
a) Bhutan proposes Gross National Happiness
https://ophi.org.uk/policy/bhutan-gnh-index/
b) A critical approach to GDP
https://hbr.org/2012/01/the-economics-of-well-being
Panel #4: Unemployment and the Future of Work
a) Did the Covid Pandemic Accelerate Automation and Unemployment?
https://www.hamiltonproject.org/assets/files/AutorReynolds_LO_FINAL.pdf
b) Is Universal Basic Income (UBI) one solution to the Jobless Future? How is UBI doing around the world?
https://www.vox.com/future-perfect/2020/2/19/21112570/universal-basic-income-ubi-map
c) Will AI (artificial intelligence) kill jobs or “upskill” jobs?
Panel #5: Production and Growth
a) Does Property in Ideas (patents, copyrights) enhance economic growth or is ‘open source’ better?
http://www.ipwatchdog.com/2011/01/02/why-patents-matter-job-creation-economic-growth/id=14170/
https://techcrunch.com/2015/12/15/the-golden-age-of-open-source-has-arrived/
b) Let’s Stop Insisting on Growth, on an Economy of MORE and MORE stuff (this panelist goes second)
https://www.nytimes.com/interactive/2022/07/18/magazine/herman-daly-interview.html
Panel #6: Alternatives to Traditional Finance
a) What can we learn about traditional methods of finance by studying Islamic Finance?
https://www.gfmag.com/topics/blogs/islamic-finance-faq-what-islamic-finance-and-how-does-it-work you could read more in this series if interested,
or go for a different angle:
b) informal finance in America today
https://static1.squarespace.com/static/53d008ede4b0833aa2ab2eb9/t/542b1f5ee4b0801eab6fa720/1412112222733/issue3-informal.pdf
c) Alternative ways to finance going to college:
https://www.npr.org/sections/money/2019/03/29/708152566/episode-903-a-new-way-to-pay-for-college
Panel #7: The Future of Money
a) How does a cryptocurrency like Bitcoin work? (please go first when presenting)
https://www.youtube.com/watch?v=kubGCSj5y3k
b) environmental impact of crypto: (a few to read, so try a few and see which ones click for you)
https://www.nytimes.com/2021/10/10/business/dealbook/crypto-climate.html
https://everestpipkin.medium.com/but-the-environmental-issues-with-cryptoart-1128ef72e6a3
c)African Americans and crypto
Panel #8: International Trade: In theory, great! But there are problems…
a) America’s changing positions on free trade, tariffs, and other types of trade protection
https://www.wsj.com/articles/free-trade-united-states-policy-11670602596
(and for more background on recent tariffs https://www.thebalance.com/trade-wars-definition-how-it-affects-you-4159973)
b) Could protectionism be good for a developing economy? Insights from the clothing/textile industries
https://www.greenbiz.com/article/invasion-second-hand-clothes-africa
Panel #9: Globalization: is it good? Bad?
a) Climate change and world trade
b)One of our current environmental crises—recycling–has a world trade dimension (think about all the container ships leaving Asia full of exports, and going back…empty?)
https://www.nytimes.com/2018/01/11/world/china-recyclables-ban.html
Panel #10: Development Economics
a) Nobel-prize winner Dr. Duflo (use the subtitles if her accent bothers you) recommends an experimental approach to poverty
b) Is “microfinance” a solution to poverty/road to development?
First, some background on micro-credit: https://www.gdrc.org/icm/not-new.html
Then, some critical thoughts: https://www.worldfinance.com/special-reports/why-the-microfinance-model-wont-solve-the-global-poverty-crisis
Media Attributions
- Money © Peambles World
