ECON 401

Intermediate Macroeconomics with Calculus

Semester: Spring 2017
Lecture Hours: Mondays, Thursdays, 4:05-5:20pm
Classroom: Ward 304

Instructor: Professor Gabriel Mathy

E-mail: mathy@american.edu
Office Hours: 2:25-3:50pm, 5:30-6pm Mondays, Thursdays, and by appointment
Office: Kreeger 124

Teaching Assistant: Mike Cauvel

E-mail : mc1465a@american.edu
Office Hours: Wednesdays 2-5pm
Office: Kreeger G02

Course Description and Learning Objectives: This course will focus on growth theory (long-
run macroeconomics) and business cycle theory (short-run macroeconomics). We will study
topics like economic growth, determinants of income per person, unemployment, inflation, and
output. I will try to integrate real-world examples whenever possible, especially of the ongoing
economic situation arising from the Financial Crisis/Great Recession which began in 2008. After
this course, you should have a solid understanding of macroeconomics and be prepared to take
more advanced courses in macroeconomics. You will be able to read the Wall Street Journal or
the New York Times and understand the effect of monetary and fiscal policy on the broader
macroeconomy.

Readings: The required course textbook is Macroeconomics by Robert Gordon, 12th edition.
The text is required and will be very helpful in understanding macroeconomics both for this
course and for your future coursework. Another book is required: The Rise and Fall of American
Growth: The U.S. Standard of Living since the Civil War, also by Robert J. Gordon. This book
will be part of a project on economic growth in the course. Both books will be placed on reserve
at the library.

Course Website: All course materials are available at http://blackboard.american.edu.

Prerequisites: ECON-100 (Principles of Macro), ECON-200 (Principles of Micro), MATH 221

(Calculus I), and Mathematics and Economics OR BS Economics.
Academic Integrity: Student must comply with the Academic Integrity Code available here:
http://www.american.edu/academics/integrity/code.cfm
Academic Support:
The Academic Support Center offers help for all students and has useful resources for
international students, students with learning disabilities and attention deficit hyperactivity
disorder, and student-athletes.
Disability Support Services provides a range of services and accommodations for students with
physical, medical or psychological disabilities

I am happy to accommodate students with disabilities. Please let me know about your situation
as early as possible during the semester. To give me enough time to arrange for appropriate
accommodations, I will need to have the disability accommodation on file at least one week prior
to the exam or the assignment due date.

Make-up policy: Make-up exams will only be given for a documented family or medical
emergencies.

Snow Day policy: In the spring semester, there are frequently snowstorms which the DC metro
region is ill prepared for which results in snow closures even for small amounts of snow. If the
university needs to close, class will not be held and instead I will record the lecture over a
Powerpoint presentation which will be posted to blackboard that you can watch from the warm
comfort of your own home.

Grading:

Homeworks: 14, 1% each, 10% of course grade

Midterms: 1, 25% each, 25% of course grade
Final Exam: 1, 35% each, 35% of course grade

Book Paper: 1, 20% each 20% of course grade

Calculus Project 1, 10% each 10% of course grade
Extra Credit 1, 1% each 0% of course grade

Homeworks: Each homework will consistent of ten (10) multiple-choice questions. There will
be 14 homeworks in total. There will be roughly one homework per chapter and we will cover
roughly one homework per week. The homeworks are 10% of you grade so there are effectively
4 homeworks which can count for extra credit if all homeworks are completed. There will be no
homework due until the add/drop deadline to allow for students to add the course without being
behind, so the early homeworks will be due starting in early February. Late homeworks will
receive no credit.
I have also uploaded a practice homework which covers various parts of the syllabus. Please use
this as an opportunity to familiarize yourself with the Blackboard system and the important
information on the syllabus.

Midterms: There will be a midterm on March 9th. The midterm will cover the first half of the
course and the final will cover the entire course. Review sessions will be scheduled prior to the
midterm by the teaching assistant.

Final Exam: The final exam will be cumulative and will be cumulative. The final exam will be
held on May 4th, 2:30pm-5pm. A review session with be scheduled prior to the final exam.

Calculus Project: There will be a Calculus Project, which will involve working through portions
of the course where calculus can further your understanding of economic growth and business
cycle macroeconomics. This project will be composed of short-answer type questions and will
be due by Friday April 28th at 11:59pm.

Book Project: You will write a 6-8 page book paper about the second half of Robert J. Gordons
The Rise and Fall of American Growth: The U.S. Standard of Living since the Civil War. The
portion you should read is Parts II and II, from p. 329-652. This paper will involve two parts.
The first will present a summary of the arguments made in these chapters in roughly 3-4 pages.
The second portion will involve working through the implications of Gordons book through the
lens of the Solow growth model we are studying in the course, which should be roughly 3-4
pages. All papers should be 1.5 spaced with 11- or 12-point font and one-inch margins. I will
provide some instruction on how to structure this paper in the first few weeks of the course. This
book paper will be due Friday April 21st at 11:59pm. Papers may be turned in as late as Monday
April 24th at 8am with full credit, but will drop by 1 letter grade for each day they are late that
time.

Extra Credit Assignment: The extra credit assignment is worth 1% of your grade and involves
writing a one-page single-spaced response to a macroeconomic current event which you will
relate to something you learned about in this course. For example, the effect of an interest rate
increase by the Federal Reserve would be an acceptable topic. This extra credit assignment can
be submitted at any time before the last day of class on May 1st.

Important Dates:

First day of class: Thursday January 19th

Add/Drop deadline: January 31st
Midterm: March 9th (tentatively)
March 20th: Class cancelled to meet with group for project:
Book Project due: April 21st by 11:59pm
Calculus project due: Friday April 28th at 11:59pm.
Last day of course: Monday May 1st
Final Exam: May 4th, 2:30pm-5pm

Spring Break: March 11th-19th (no lecture March 13th, 16th)

Course Outline:

Introduction

Chapter 1: What is Macroeconomics?

Chapter 2: The Measurement of Incomes, Prices, and Unemployment

Growth

Chapter 11: The Theory of Economic Growth

Chapter 12: The Big Questions of Economic Growth

Business Cycles

Chapter 3: Income and Interest Rate: the Keynesian Cross Model and the IS Curve
Chapter 4: Strong and Weak Policy Effects in the IS-LM Model
Chapter 5: Financial Markets, Financial Regulation, and Economic Instability
Chapter 6: The Government Budget, the Government Debt, and the Limitations of Fiscal Policy
Chapter 9: Inflation: Its Causes and Cures
Chapter 10: The Goals of Stabilization Policy: Low Inflation and Low Unemployment
Chapter 13: The Goals, Tools, and Rules of Monetary Policy

Other Macroeconomic Topics

Chapter 7: International Trade, Exchange Rates, and Macroeconomic Policy

Chapter 8: Aggregate Demand, Aggregate Supply, and the Great Depression
Chapter 17: Where we stand

Special Topics (if time)

Chapters 14-16