ECON 52 - Economic Analysis III (Intermediate Macroeconomics)

Syllabus - Spring 2013

Professor Pablo Kurlat

pkurlat@stanford.edu
Office: Landau Economics 331
Lectures: Tuesday and Thursday 9:00 - 10:50 am
Section: TBD
Office Hours: Wednesday 3:00 - 5:00 pm in Landau 331

Overview
Macroeconomics attempts to explain the evolution of the main economic aggregates over time.
We will study the determinants of long-term economic growth, consumption, savings, investment,
short-term economic fluctuations, unemployment, inflation and interest rates. We will also study
the conduct of fiscal and monetary policy and how those affect macroeconomic outcomes. The emphasis of the course will be on constructing models to think about these questions and contrasting
these models with evidence.

Economics Department Common Course Policies

All courses taught at the Stanford Department of Economics are governed by a common set of
course management rules. A document explaining these rules is on the Economics Department
website at http://economics/undergraduate/economics-common-syllabus. Please be sure to read
this document in its entirety and, if you have any questions, send an email to both me and
Joanne DeMarchena (jdemar@stanford.edu), the undergraduate administrator at the economics
department. Note that it is your responsibility to get familiar with these policies, and failure to
do so does not constitute grounds for exceptions from these policies.

ECON 52, Winter 2012

Prerequisites
You should have taken ECON 1B, ECON 50 before you take this class and also have taken
MATH 51 or some equivalent maths course as a prerequisite for ECON 50. We will be relying
on concepts and techniques from those classes from the beginning, so if there are things you
forgot or never learned properly, you will need to review them soon.
You should know about utility functions, production functions and income and substitution
effects.
In terms of maths, you should be familiar with problems of the form
max u (c1 , c2 )
c1 ,c2

s.t. p1 c1 + p2 c2 M
meaning that you can solve them, understand what you are doing when you solve them and
can interpret the solution.
I will sometimes ask you to compute numerical examples of models that we work with but
I will not assume that you are familiar with any numerical or computational tools, so I will
give you guidance on anything that is not straightforward.

Resources
You should come to class.
I will use the coursework site to post materials and homework and make announcements so
make sure you are registered.
There are three optional textbooks, none of which is great. They are all less rigourous than
we will attempt to be in this course and they use different types of simplifying assumptions,
so they may be useful as way to build your intuition or to look for alternative ways to look
at a question but they are not an alternative way to take the course. I will not follow any of
them very closely at all. Older editions are just as good.
1. N. Gregory Mankiw, Macroeconomics, 8th edition, 2012, Worth. This has nice examples
and the explanations are reasonably clear, but some of the discussion of business cycles
is a bit old fashioned.
2. Charles I. Jones, Macroeconomics 2e, 2011, W.W. Norton. This textbook has been
assigned in past editions of this course so it has the advantage that you might be able
to steal it from your roommates. The part on growth is not bad.
2

ECON 52, Winter 2012

3. Stephen D. Williamson, Macroeconomics, 4th edition, 2011. This attempts to be a bit

more rigourous but without using too much maths, which can make it a bit obscure.
I will post my notes on the coursework site, usually before class (but I cant promise). They
are designed to help me remember what I plan to do in class and not as something to be
read on its own, but feel free to use them in whatever way is most helpful.
I will sometimes ask you to read articles or case studies before coming to class. These readings
will usually not be very long.

Assignments and Grading

There will be 6 Problem Sets.
In each Problem Set there will be a couple of questions that will be relatively direct applications of what we did in class and a couple of questions that ask you to think about problems
we have not talked about in class. The Problem Sets are designed to be challenging.
You will have about a week to complete each Problem Set.
You are strongly encouraged to discuss the problem sets with each other and/or work in
groups but not to just copy off of someone elses work.
Your best 5 scores from the Problem Sets of them will count towards your final grade. If you
miss one Problem Set thats fine, but then the other 5 will be the ones that count.
There will be a Midterm Exam on April 30 in class and a Final Exam during the final exam
period. The Midterm will cover material up to April 25 and the Final will be comprehensive.
The weights to determine your course grade will be:
Problem Sets

25%

Midterm

25%

Final

50%

Timetable
The exact date when we study each topic might change a bit; the dates of problem sets and exams
probably not.

ECON 52, Winter 2012

Date

Topic

Optional textbook reference

M
J
W

Tue

Apr 2

GDP and living standards

Ch 2

Ch 2

Ch 2

Thu

Apr 4

GDP and living standards

Ch 2

Ch 2

Ch 2

Tue

Apr 9

Economic growth

Ch 8,9

Ch 3, 4, 5

Ch 6, 7

Thu

Apr 11

Economic growth

Ch 8,9

Ch 3, 4, 5

Ch 6, 7

Tue

Apr 16

Consumption-savings

Ch 16

Ch 10.5

Ch 8

Thu

Apr 18

Investment

Ch 17

Ch 10.2

Ch 10

Tue

Apr 23

Labour markets

Ch 7

Ch 7

Ch 4

Thu

Apr 25

General Equilibrium

Tue

Apr 30

Thu

May 2

Business cycles

Tue

May 7

Real business cycle model

Ch 10

Thu

May 9

Real business cycle model

Ch 10

Tue

May 14

Money

Ch 4

Ch 8

Ch 11, 16

Thu

May 16

Money

Ch 4

Ch 8

Ch 11, 16

Tue

May 21

The New Keynesian Model

Ch 11, 12

Ch 10, 11

Ch 13

Thu

May 23

The New Keynesian Model

Ch 11, 12

Ch 10, 11

Ch 13

Tue

May 28

Monetary Policy

Ch 14, 15

Ch 12

Ch 18

Thu

May 30

Monetary Policy

Ch 14, 15

Ch 12

Ch 18

Tue

June 4

No class

Tue

June 11

Class Event

Problem Set 1 due

Problem Set 2 due
Problem Set 3 due

Ch 10
Midterm Exam
Ch 10

Ch 9

Ch 3
Problem Set 4 due

Problem Set 5 due

Problem Set 6 due

Final Exam. 12:15-3:15