econ101syllabus - ECONOMICS 101 Intermediate Macroeconomic...

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ECONOMICS 101 Intermediate Macroeconomic Theory MTW 4:10 – 5:50 p.m., HOAGLD 113 Department of Economics Professor Siegler UC Davis Summer 2009 O VERVIEW Macroeconomics is the study of issues that affect the economy as a whole, especially unemployment, inflation, and economic growth. John Maynard Keynes defined economics as the “science of thinking in terms of models, joined with the art of choosing models which are relevant to the contemporary world.” Economic models are simplified representations of relationships within an economy, and are described as a set of mathematical relationships between economic variables. Models are useful because they allow us to focus on necessary and important relationships while omitting unnecessary detail and complexity. In this course, we will be examining many models of the macroeconomy, each with its own set of simplifying assumptions. One way to categorize the models is by the time horizon over which they apply. Models can generally be grouped into two broad categories: The Long Run – These models assume that wages and prices are fully flexible and, therefore, that capital and labor are fully employed. Over the long run, labor, capital, and technology can change. The production model, Solow growth model, Romer growth model, and the quantity theory of money are examples of long-run models. Long-run models are best suited for explaining the economy over a time horizon of several years or more. The Short Run – Most short run models of the economy (for example, the IS/MP/AD/AS model) assume that prices and/or wages take some time to adjust to long-run equilibrium. Because of this stickiness, capital and labor are sometimes not fully employed. That is, not all markets clear in the short run. Non-market clearing models are widely viewed as being important for explaining the economic fluctuations we observe from month-to-month or from year-to-year. Prerequisites for this course include Economics 1A and 1B, and Mathematics 16A-16B or 21A- 21B, all passed with a grade of C- or better. C OURSE R EQUIREMENTS AND G RADING Course requirements include in-class exercises, four take-home problem sets, and two in-class exams including a comprehensive final exam. Final grades will be weighted as follows:
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This note was uploaded on 06/28/2009 for the course ECON 101 taught by Professor Miyanishi during the Summer '08 term at UC Davis.

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econ101syllabus - ECONOMICS 101 Intermediate Macroeconomic...

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