Homepage for Econ 502
Masters-Level Macroeconomic Theory

Last Updated: 15 December 2007 Latest Course Offering: Fall 2007 Course Instructor: Professor Leigh Tesfatsion Department of Economics Iowa State University Ames, Iowa 50011-1070 (515) 294-7318 (Secretary) http://www.econ.iastate.edu/tesfatsi/ tesfatsi AT iastate.edu 502 Syllabus (Topics&Assignments) In-Class Discussion Schedule General Macro/Financial Resources

Course Meeting Time and Place: TR 11-1, 272 Heady F 12:10-1, 272 Heady Instructor's Office and Office Hours: Office: 375 Heady Hall Hours: F 10-12 and by appointment. Teaching Assistant (TA): Mr. Ruiqing Miao Tel: (515) 294-6042 Email: miaorong AT iastate.edu TA's Office and Office Hours: Office: 271 Heady Hall Hours: MW 10-11, Thursdays 4-5 and by appointment

Homepage Contents:

Course Objectives Course Topics Credits and Requirements Grade Policy

In-Class Discussion Policy Take-Home Exercise Policy Midterm and Final Exam Policy Disability Statement

Course Objectives

Macroeconomists study the structure and performance of economies at the national or regional level and how government policy makers attempt to influence the trajectories of these economies over time.

From Keynes' General Theory (1936) through the mid-nineteen seventies, macroeconomic models primarily consisted of highly aggregated relationships for consumption, investment, and other key economic activities using some version of the IS-LM framework. Over the past thirty-five years, however, macroeconomists have developed a variety of macroeconomic models based more explicitly on microeconomic foundations.

These micro-based macroeconomic models come in a variety of forms, including: (a) new classical models incorporating rational expectations, single representative agents, and continual market clearing; (b) new Keynesian models incorporating rational expectations, asymmetric information, and possible market disequilibrium; (c) various hybrids of the latter two approaches - e.g., dynamic stochastic general equilibrium (DSGE) models; and (d) agent-based computational models in which macroeconomic regularities arise over time from the repeated interactions of heterogeneous microeconomic agents.

This course will critically compare and contrast a selection of these micro-based macroeconomic models for logical coherence, empirical relevance, and policy implications. Particular attention will be paid to three important issues: microfoundations modeling of economic growth; expectations modeling; and the modeling of market coordination mechanisms.

Course Topics

1. Introduction
2. Aggregate Macroeconomic Modeling: A Microfoundations Critique
3. Economic Growth: A Microfoundations Approach
4. Treatment of Expectations in Macroeconomic Models
5. Treatment of Coordination Issues in Macroeconomic Models

Credits and Requirements

• Credits: 4 credits

• Prerequisites: Intermediate macro and micro theory, intermediate calculus, and basic matrix algebra.

• Required Course Packet:
  

  Class Lecture Notes for Economics 502: Fall 2007, a packet of three-hole punched lecture materials (374 pages) prepared by the instructor. Shrink-wrapped copies of this packet are now available for purchase from Copyworks (105 Welch Avenue, Ames, 292-3630) for a price of $13.08 (plus tax). A discount coupon for a three-ringed notebook should be included with each packet. Copyworks is open 24 hours each day of the week.

  NOTE: If packet copies are sold out, alert Copyworks and additional copies will be made on a short turn-around basis.

• Other Required and Recommended Readings:

  The course packet (above) is the only required purchase for Econ 502. Other required and recommended readings will be made available either on-line, through closed reserve, or as hand-outs. See the Econ 502 Syllabus for a detailed annotated listing of all required and recommended readings for Econ 502.

Grade Policy

• Grades for the course will be based on assigned moderation duties for an in-class discussion (10 points), assigned take-home exercises (at least 50 points), one midterm exam (70 points), and a final comprehensive exam (100 points). General contributions to class discussion will count for extra credit in case of a borderline grade.

• As the course proceeds, students will be able to check their accumulated point scores at the following Accumulated Grade Site (pdf). The last four digits of student identification numbers will be used in place of student names at this site.

In-Class Discussion Policy

Since all lecture notes for Econ 502 are available in advance in course packet form, class discussion will be stressed in place of traditional lectures. Students will be expected to study assigned readings prior to attending the class in which they are discussed. Key discussion questions will be identified in advance for each class meeting, and students should come to class prepared to participate in a discussion of these questions.

In addition, the class will be divided into discussion groups, each consisting of about 2-4 students. Each of these groups will be assigned a small number of discussion questions focusing on some controversial aspect of the regular course materials, plus a class presentation date. On or before their assigned class presentation date, each discussion group will be asked to distribute a hand-out to all class members that presents their response to their assigned discussion questions. On the class presentation date, the discussion group members will be expected to lead a one-hour class discussion based on this hand-out. Discussion groups will be given a group performance rating (from 0 to 10 points), which will count as part of each discussion group member's course grade.

Take-Home Exercise Policy

As indicated at the top of each assigned take-home exercise sheet, these exercises must be received by me by the beginning of class on each due date in order to be counted as part of a student's cumulative course points. Late assignments will not be accepted for formal grading -- no exceptions. The reason for this policy is that exercise answers will be discussed in class on each due date; the passing out of an exercise answer key and/or the beginning of the discussion of the answers (whichever comes first) will be the effective dividing line between on-time and late assignments. The bag of collected exercises will be sealed at this time.

If you must miss class on a due date, you can still ensure your exercise is in on time by one of the following means: (a) have someone else carry the exercise to class for handing in; hand in (or have someone else hand in) the exercise directly to the TA or to the instructor prior to the start of class on the due date (e.g., during office hours); or (c) put (or have someone else put) the exercise under the Heady 375 office door of the instructor no later than ten minutes prior to the start of class on the due date. Please note that putting exercises in the department mail box of the instructor or TA, or emailing answers to the instructor or TA, are not among these listed options because there is no set time that mailboxes and/or email will be checked.

The intent of this policy is to help ensure that student grading is fair and accurate. Your cooperation is appreciated.

Midterm and Final Exam Policy

The Econ 502 midterm exam for fall 2007 will be held on Thursday, October 18, 11-1pm, in the regular class meeting room (Heady 272). According to the Fall 2007 tentative final exam schedule for ISU, the Econ 502 final exam for fall 2007 will be held on Thursday, December 13, 9:45-11:45am in Heady 272.

Both exams will be closed-book exams covering all assigned materials to date. Test booklets will be provided at each exam, so students do not need to bring paper or blue books to the exams. Each exam will consist of a selection of problems designed to test ability to think through macroeconomic issues using basic economic tools and concepts as aids. These exam problems will make use of class lecture materials, in-class discussion questions, required readings, and assigned home exercises, and will be similar in nature to in-class exercises and assigned home exercises.

Absence from either the midterm or final exam will result in a grade of zero unless the instructor agrees there are verified extenuating circumstances such as a major medical emergency. In the latter case, the course grade will be determined on the basis of other work completed; no make-up exams will be scheduled. Any student missing both the midterm exam and the final exam will be asked to withdraw from the course.

To get a more concrete idea of what to expect on the midterm and final exams, please refer to the midterm and final exam review materials provided at the end of the Econ 502 Syllabus.

Disability Statement

If you have a disability and require accommodations for this course, please contact the instructor early in the semester so that your learning needs may be appropriately met. You will need to provide documentation of your disability to the Disability Resources (DR) office, located on the main floor of the Student Services Building, Room 1076, 515-294-6624.

Copyright © 2007 Leigh Tesfatsion. All Rights Reserved.