Macroeconomics Cheung Kong Graduate School of Business Prof. Cheng Wang

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28 Οκτ 2013 (πριν από 4 χρόνια και 15 μέρες)

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Macroeconomics


Cheung Kong Graduate School of Business


Prof. Cheng Wang

Macr oeconomics




1.

C
ourse Objectives


The
fi
rst objective of this course is to acquaint you with fundamental principles and

methods of modern macroeconomic theories
.


The second obje
ctive of this course is to teach you how to use these principles and

methods to think about macroeconomic issues in real life and for business
decision
-
making
.


The third objective
,
which is more speci
fi
c, is that after this course
,
you should be

able to
u
nderstand almost all the reports and discussions related to
m
acroeconomic

data and
policy in the Wall Street Journal
.



2.

Textbook and Lecture Notes


Students are required to purchase the following book
(
available in the university

Bookstore
):




Macroecono
mics

fi
fth Edition
,
author
:

Gregory Mankiw
,
publisher
:
Worth

(2003)


Students are responsible for reading the assigned chapters, as they are covered in

class. In
addition to the textbook, Professor Wang will hand out lecture notes
.
The

relevant part of
the

notes should be reviewed after each lecture
.



3.

Course Design


This course is designed to give you a system of knowledge based on which you can

develop your own way of thinking about macroeconomic issues.


This system is made relatively self
-
contained
.

In
other words
,

this course is not a

sequence of loosely connected stories and cases. The theoretical framework is the

tree
.

The stories and cases are the fruits of the tree
.



4.

Course Evaluations


Your final grade will be based on your performance on the foll
owing four parts.


Part
1.

Class participation
(10%)

Part
2.
Your solutions to the homework problems
(30%)

Part

3.

Your performance on the midterm exam (20%)

Part
4.

Your performance on the final exam
(40%)



5.

Class Participation


It is essential that you e
ngage actively in class studies and discussions.


Students are encouraged to ask questions and make comments during class time. Raise
your hand when you have a question or want to make comments during class.

Please be brief so that we can make the most e
f
fi
cient use of the class time
.



6.

Homework Problems


Homework problems must be done independently, although you are encouraged to

discuss the questions with your classmates before you construct your own answers.



7.

Exams


The midterm exam is

45

minutes long.

It covers material taught during the first half

of
the course.


The

fi
nal exam takes place at the end of the course. The final exam is

90

minutes

long
and covers all the material taught in the whole course, although the emphasis

will be on
the second hal
f of the course.



8. Course outline (December 2003)


Note that this course outline is tentative
.
Modi
fic
ations to this outline will

be made when the course is being taught
.


(1)

Introduction


What is Macroeconomics
?

A list of Macro and Micro questions

Why
Macroeconomics
?

How do economists think
?

The model of demand and supp
ly

Exogenous and endogenous variables


(2)

Macroeconomic Variables


Gross domestic product

(
GDP
)

Computing GDP

Nominal vs
.
real GDP

National income accounting

The components of GDP

Other meas
ures of income

The GDP de
fl
ator

The consumer price index
(
CPI
)

Measuring in
fl
ation

Measuring unemployment

Unemployment and in
fl
ation
:
The Okun’s Law


(3)

The Supply Side of the Economy


The production function

Constant returns to scale

The marginal product of
labor

The law of diminishing marginal product

The marginal product of capital

The demand for labor

Why doesn’t capital
fl
ow from rich to poor countries
?


(4)

The Demand Side of the Economy


Consumption

Investment

Government spending

Equilibrium in the goods ma
rket

Equilibrium in the credit market

Public and private saving

Policy analysis


(5)

The IS
-
LM Analysis


The IS curve

The government purchases multiplier

Cutting taxes to stimulate the economy

Money

The demand for money

Money market equilibrium

The IS

LM analy
sis

Fiscal and monetary policy design

The great depression

The e
ff
ects of de
fl
ation

The Japanese recession in the
1990s

The liquidity trap


(6)

Lessons for China


The Open Economy

The open economy

International capital
fl
ows and trade balance

A small open econ
omy

Exchange rates

The Mundell
-
Fleming Model

Policies under the
fl
oating exchange rate system

Policies under the
fi
xed exchange rate system

Speculative attacks and the
1997
Asian
fi
nancial crisis


(7)

The New Economy


Concept

Characteristics of the new economy

Globalization