IAS 107 (Fall 2018)

Intermediate Macroeconomics
Instr. Mario B. Muzzi
Office: Stephens 107b
Hours: M/W/F-8-9am
Email: marmuzzi@berkeley.edu

Intermediate Macroeconomics--Syllabus

Course Description:
Macroeconomics is the study of aggregate economic activity. The typical princi-
ples level course in macroeconomics provides a survey of methods for measuring macro-
economic activity and outlines basic models of the interrelationships between key macro-
economic variables such as the price level, gross domestic product, employment, unem-
ployment, and interest rates. The purpose of this course is to expose students more for-
mally to macroeconomic theory: its nature, uses, strengths, and weaknesses.

After a brief review of the topics covered at the principles level, the first half of
the course describes an economy in the long run, i.e., the market clearing potential econ-
omy around which the actual economy fluctuates. The second half of the course focuses
on macroeconomics in the short run introducing and developing basic models of business
cycle fluctuations and policy applications. Along the way, a student should gain a thor-
ough understanding of: (1) the Classical Theory, (2) the Solow Growth Model, (3)
Keynesian Theory and IS/LM model, (4) the debated effects of monetary and fiscal pol-
icy on output, prices and employment, (5) issues concerning government debts and (6)
issues concerning trade imbalances.

Learning Outcomes:
1. Understanding macroeconomic data;
2. The fundamentals of economic growth;
3. The tools of fiscal and monetary policy and how they affect the economy;
4. The nature and causes of the business cycle (expansions and recessions);
5. The influence international trade and finance have on an economy;
6. How the principles learned in microeconomics are consistent with certain macroeco-
nomic models.
7. To analyze and critically evaluate economic arguments and policies discussed in the
media in a rigorous and systematic manner.

Office Hours:
My office hours this semester will be before class from 8 am to 9am. Do not wait
until you are lost in this class to seek help. Remember that I am here to help you learn.
My office is located in Stephens Hall. Don’t hesitate to email me if you need help or
have any other issue you wish to discuss. Please send me an email beforehand notifying
me that you intend to see me during my office hours.
Homework, Quizzes, Exams and Grades
5 Problem Sets 25%
Two Midterms 40%
Final Exam 35%
100%

Class attendance While no portion of the official points is allocated to class par-
ticipation, class attendance and participation will form the basis for borderline grade deci-
sions. Tardiness to class is a distraction to the flow of a lecture and if habitual (i.e., more
than 3 times during the session) will cause me to reduce your overall grade.

Grade Scale:

92-100% A
88-91 A-
84-87 B+
79-83 B
75-78 B-
72-74 C+
68-71 C
65-67 C-
63-64 D+
58-62 D
56-58 D-
Less than 55% F

Reading Assignments:
The textbook for this course is Macroeconomics (9th Edition) by N. Gregory
Mankiw. Feel free to read the text either just before or just after the lectures on a certain
topic. But I would encourage you to keep up with the reading; it will be very hard to do
well in this class without devoting just as much time at home as in lecture. Intermittently
during the semester, I may assign articles of interest from the Wall Street Journal, the
New York Times, the Financial Times, The Economist, or reputable online blogs. Any
such material will be posted on bspace or emailed to you.

Rules of the Game:

1. Be on time to class. Coming into class late distracts other students and is a nuisance.
After a warning tardiness will begin to have a strong negative effect on your grade—re-
ally!

2. Turn in problem sets on time--problem sets turned in after the beginning of the class
they are due will be heavily marked down (i.e., 10% to 25%). Late assignments will not
be accepted after 5pm on the day they are due. If you cannot attend class to turn the as-
signment in, you may email it instead.
3. Make sure your cell phones are silent during the lecture. I do allow the use of laptops
and tablets during the lecture but if I notice that your use of such technology is distracting
other students from the lecture, I will take away your privilege to use said technology.

4. Feel free to work together in pairs or in groups on problem sets but turn in your own
separate work. Cheating of any kind on exams will not be tolerated and will be dealt with
in a very serious way. This class will be conducted in strict observance of the Univer-
sity’s Academic Honesty Code

5. The only excuse for missing homework, midterms or the final is a medical excuse
signed by a doctor or a verifiable personal or family emergency. Please do not take this
class if the final exam date is not convenient for you. No other dates will be availa-
ble.
Tentative Class Schedule
Aug 22,24: Introduction: The Science and Data of Macroeconomics
(Chapters 1-2)

Aug. 27, 29, 31 National Income: Where It Comes From and Where It Goes (Chap-
ter 3)

Sept. 5, 7 The Monetary System

(Chapter 4)

Sept. 10, 12, 14 Inflation: Its Causes, Effects, and Social Costs
(Chapter 5)

Sept. 17, 19, 21 The Open Economy

(Chapter 6)

Sept. 24, 26, 28 Unemployment

(Chapter 7)

Oct. 1, 3, 5 Review, Midterm I

Oct. 8, 10, 12 Economic Growth I: Capital accumulation and Population Growth

(Chapter 8)

Oct. 15, 17, 19 Economic Growth II: Technology, Empirics, and Policy
(Chapter 9)

Oct. 22, 24, 26 Introduction to Economic Fluctuations, Aggregate Demand I:

Building the IS-LM Model
(Chapter 10-11)
Oct. 29, 31, Nov 2 Aggregate Demand II: Applying the IS-LM Model,
(Chapter 12)

Nov. 5, 7, 9 Open Economy IS-LM, Midterm II.

(Chapter 13)

Nov. 12, 14, 16 Aggregate Supply and Short-run Tradeoff Between Inflation and
Unemployment
(Chapter 14)

Nov. 19, 21 Alternative Perspectives on Stabilization Policy

(Chapter 18)

Nov. 26, 28, 30 Government Debt and The Financial Crisis

(Chapters 19-20)

Dec. 3, 5, 7 Review

Dec. 13 FINAL EXAM (7-10pm)