Lec1 - Finance 101: Monetary Economics & the Global Economy...

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Finance 101: Monetary Economics Lecture 1 Introduction and overview Prof. Hnatkovska Fall 2011
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FNCE 101 - Hnatkovska - Lecture 1 2 Outline What is macroeconomics? Course overview and administrative stuff A first look at the data
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FNCE 101 - Hnatkovska - Lecture 1 3 What is macroeconomics? Typical macro questions What determines a nation’s long-run growth rate? How do recessions / booms occur? Why is the unemployment rate so high / low? What causes inflation and why is it a bad thing? How can the government influence the economy with monetary and fiscal policy? Is this a good idea? Our objectives Provide a coherent model of the aggregate economy in order to answer these questions Understand the origins of recent financial crisis and its macroeconomic impact.
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Course methodology Consider economy as a combination of different markets Build analysis from ‘the bottom up’ Individual: derive demand and supply from agents’ (households, firms) optimal decision problems Aggregate: sum up demands and supplies across agents and combine to describe goods, labor and capital markets General equilibrium: combine different aggregates such that all markets clear simultaneously Advantages Changes in economic environment (e.g. taxes) change agents’ behavior => ‘bottom up’ analysis allows us to take these changes into account Markets are interrelated and must be considered jointly => General equilibrium allows us to do so 4
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Course program Review macro statistics and asset prices Describe key economic markets Production and labor market Consumption, investment and capital markets Money, prices and asset markets Combine everything in general equilibrium IS-LM / AS-AD framework Use model to discuss Business cycles (Classical vs. Keynesian view) Fiscal and monetary policy Long-run growth Expand model to address issues in international economics FNCE 101 - Hnatkovska - Lecture 1 5
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Lectures Attendance is not mandatory but is HIGHLY recommended Sit in same seat every lecture so that I get to know your names Ask questions often and at any time Don’t distract your classmates (and yourself) No food No cell phones FNCE 101 - Hnatkovska - Lecture 1 6
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FNCE 101 - Hnatkovska - Lecture 1 7 Website https://webcafe.wharton.upenn.edu/eRoom/fnce/ Access Wharton username and password Apply online at http://accounts.wharton.upenn.edu Content Lecture notes Assignments Supplementary readings and weblinks Practice exams Administrative info Discussion groups Sign-up tools
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FNCE 101 - Hnatkovska - Lecture 1 8 Required reading material Lecture notes (slides) Available on webCafé (the evening before class at the latest) Textbook Abel, Bernanke and Croushore (2011). Macroeconomics . Addison- Wesley, 7th edition. [ABC]
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This note was uploaded on 10/26/2011 for the course ASDF 2342 taught by Professor 2adga during the Spring '11 term at Mansfield University of Pennsylvania.

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Lec1 - Finance 101: Monetary Economics & the Global Economy...

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