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Intermediate Macroeconomics Theory

Fall 2015

Instructor: Lonce Ndikumana; Email: ndiku@econs.umass.edu; Web: www.ndikumana.com

Day/time: Tuesday and Thursday, 11:30-12:45
Venue: Integrated Learning Center, Room S211
Office hours: Tuesday and Thursday, 10-11am, Thompson Hall 910
This course provides the analytical tools for understanding the behavior of key macroeconomic
variables, notably aggregate output and its components (investment, consumption, government
expenditure and net exports), employment, and inflation, both the context of a closed economy and
in the open economy. Conditions for equilibrium in key markets (goods, labor, and financial
markets) are examined. The course discusses the instruments of monetary and fiscal policy as well
as the impact of fiscal and monetary policy interventions on economic activity.

Required Textbook: Blanchard, Olivier and David R. Johnson (2012). Macroeconomics. 6th edition
Other readings:
Robert Pollin (2012). Back to Full Employment. MIT Press.

Reports and papers by the Federal Reserve Board; others selected papers.

Class attendance (lectures and sections): 10%
Note: Permission for missing lectures, discussion sessions, and exams (with granting
makeup) is granted by the course Professor only (not the TAs).
Mid-term exams (two): 50%
Final exam: 25%
Total for 3 exams: 75%
Two mandatory 2-3 page essays on 2 documentary videos: 15%
Extra credit (optional): up to 2.5% for a 3rd essay on a video. Essay must be submitted by
regular due date for the particular Video. Once submissions are closed, they are so for both
regular and extra credit options.
Mid-term exam I: October 1, 2015, 11:30-12:15, Integ. Learning Center S211
Mid-term exam II: November 5, 2015, 11:30-12:15, Integ. Learning Center S211
Final exam: TBA

1. Cellular phones must be turned off or on silent mode

2. Laptops are not allowed in lectures, except for taking notes. If a student is found using a
laptop for other purposes, he/she will be asked to leave the lecture room immediately.
3. The grade for attendance is based on physical attendance in lectures and discussion
sections. The TAs will take attendance at every discussion session. The Instructor will take
attendance randomly in lectures throughout the semester.
4. A missed exam earns zero points. A makeup exam may be granted by the Instructor (not the
TA) upon submission of a University-sanctioned excuse, including:
Attending University-sanctioned activities; e.g., athletes participating in official
sports events.
Illness: the student must provide a Doctors note.
Other emergencies: the student must provide official proof of absence.

All due dates are firm. Submissions on Moodle are closed at the due date hour. If you have a
University-sanctioned reason for late work, please notify the Instructor (not the TA) as soon as
All assignments must be submitted on Moodle and all files must be in MS Word or pdf.

===WEEK 1: Sep 8, 10===

Section 1: Introduction
- Course objectives, key concepts and methodology (Blanchard and Johnson, Chapters 1, 2;
Pollin Chap 1, 2)
- The global financial crisis and policy responses: Blanchard and Johnson, Chapter 9
Other readings:
Federal Reserve Board (2015). Monetary Policy Report. July 15, 2015
Bernanke, Ben (2012). The Federal Reserves Response to the Financial Crisis
Yellen, Janet (2015). Recent Developments and the Outlook for the Economy. Speech at the City
Club of Cleveland, Cleveland, Ohio, July 15, 2015.
===WEEK 2: Sep 15, 17 ===

Section II: The Short Run

IIa. The Goods Market (Blanchard and Johnson Chapter 3)
Documentary #1: The Inside Job; Essay due on September 17.

===WEEK 3: Sep 22, 24===

IIb. Financial Markets (Blanchard and Johnson Chapter 4)

IIc. Goods & Financial Markets: IS-LM Model (Blanchard and Johnson Chapter 5)

===WEEK 4: Sep 29, Oct 1===

IIc. (contd) Goods & Financial Markets: IS-LM Model (Blanchard and Johnson Chapter 5)
October 1: Midterm Exam #1

===WEEK 5: Oct 6, 8===

Section III: The Medium Run

IIIa. The Labor Market (Blanchard and Johnson Chapter 6)

===WEEK 6: Oct 15 (Oct 13th: no class; Monday class schedule followed)===

IIIb. Putting Markets Together: AS-AD Model (Blanchard and Johnson Chapter 7)
===WEEK 7: Oct 20, 22 ===
IIIc. Inflation and unemployment (Blanchard and Johnson Chapter 8)

===WEEK 8: Oct 27, 29 ===

Section IV: The Long Run
IVa. Facts of Growth (Blanchard and Johnson Chapter 10)
IVb. Growth Analysis (Blanchard and Johnson Chapter 11)

===WEEK 9: November 3, 5 ===

IVc. Technological Progress (Blanchard and Johnson Chapter 12)
November 5: Midterm #2

===WEEK 10: November 10, 12 ===

Section V: The Open Economy
Va. Openness in Goods Markets (Blanchard and Johnson Chapter 18)

===WEEK 11: November 17, 19 ===

Vb. The Goods Market in an Open Economy (Blanchard and Johnson Chapter 19)
Vc. Monetary & Fiscal Policy in an Open Economy (Blanchard and Johnson Chapter 20)
Documentary #2: Black Gold; Essay due on November 19
===WEEK 12: November 24 (Nov 26: no class; Thanksgiving holiday)===
Section VI: Policy issues
Pollin Ch3-5
VIa. Policy making as a game (Blanchard and Johnson Chapter 22)
===WEEK 13: December 1, 3 ===
VIb. Fiscal policy: Inflation & Deficit Financing (Blanchard and Johnson Chapter 23)
Documentary #3: Life and Debt; Essay due December 3
===WEEK 14: December 8, 10===
VId. Monetary Policy: tools and impact (Blanchard and Johnson Chapter 24)

===WEEK 15: Dec 14-19===

FINAL EXAM: Date and time TBD