Professor Henry Chappell
Office 409 BA
Office Hours Spring 2010: TTh 2:00-3:15 PM and TTh 4:45 - 5:15 PM and by appointment
Class Meets TTH 3:30 - 4:45 PM BA436
Phone: 803-777-4940 
Fax: 803-777-6876
E-mail: chappell@moore.sc.edu
Web: http://professorchappell.com

Course Materials

Textbook: I suggest that you get a used copy of Macroeconomics, 5th edition, by Abel-Bernanke, or 6th edition, by Abel-Bernanke-Croushore. The 5th edition is cheaper and perfectly adequate. ISBN numbers are below:

Abel-Bernanke (5th) ISBN Number: 0321162129
Abel-Bernanke-Croushore (6th) ISBN Number: 032141554x

I will NOT be using the Course Compass or MyEconLab web-based software packages with the textbook this semester. Inexpensive used copies of the textbook can be found at Amazon.com or Abebooks.com.

Wall Street Journal: You will need to have access to the Wall Street Journal Online edition. I will distribute a form for signing up. The price for print and online subscriptions (combined) is $34 for 15 weeks. I will turn in subscriptions after the drop/add date; your subscriptions will last through the end of classes.

Web-based Resources: I will occasionally ask you to read other materials posted on the web.

Recorded Lectures: I have posted voiced-over PowerPoint presentations for most of the chapters in your textbook. Click here to access lectures. These were created in summer 2007, but the discussion of theory is consistent with the current text.

Facebook Groups: I will use Facebook Groups as a Discussion Board for this class. Sign-up for the Economics 322 Group.

Other: I also suggest that you bring pens or pencils in a variety of colors to class (some of the diagrams make this almost essential).

Course Introduction and Goals

Macroeconomics concerns the evolution of aggregate economic variables like output (GDP), employment, unemployment, interest rates, exchange rates, imports and exports, and the average level of prices. Macroeconomic theory attempts to provide plausible explanations for the observed movements in these variables in a rigorous way. 

If the preceding paragraph fails to fully convey the importance of macroeconomics, recent events are more compelling. In 2006 housing prices peaked and began to fall after rising rapidly for a decade. Default rates on mortgage loans began to rise. In December of 2007, the US economy entered a recession. By September of 2008, problems in mortgage and housing markets led to panic in financial markets, which were followed by government rescues on a massive scale. At the same time the recession worsened, with output and employment falling dramatically. As we begin this course, it appears that the economy is emerging from the recession, but unemployment remains high and may stay high for a prolonged period. Part of our task in this course is to consider whether and how existing theories can explain recent events, as events that occurred in the past. 

Policy issues are studied extensively in this course. Monetary policies are traditionally concerned with the level and rate of growth of the economy's money stock and with the targeting of specific interest rates; fiscal policies are related to taxing and spending decisions. Most macroeconomic theories imply that the conduct of monetary and fiscal policies will have important macroeconomic consequences, although theories differ in their predictions about exactly what those consequences will be. Students in this course will be presented with a theoretical framework that is sufficiently general to encompass alternative views on most issues. The recent recession has seen a proliferation of policy actions that are both conventional and not-so-conventional, and we will also consider the rationale for the actions taken and whether they have been justified.

Students will be expected to be able to describe the theory presented in the text in both verbal and analytical terms, and to use the theory in applications to policy issues. After taking this course students should be able to comprehend and critically evaluate articles on macroeconomics appearing in the popular press.

Course Policies

Prerequisites

There are prerequisites for this class. Students should have already completed Econ 221 and Econ 222, or Econ 224. Also there is a calculus prerequisite: students must have completed Math 122 or Math 141.

Attendance

Students are expected to attend classes regularly. Good attendance is directly rewarded (see the grading scheme) and is important if you wish to do well. 

Academic Integrity

The University Honor Code applies. All work must be your own unless I explicitly permit collaboration. See the Honor Code at this link:

http://www.sc.edu/academicintegrity/honorcode.html

Class Rules

Please arrive on time and stay until class ends unless you have unavoidable conflicts.

Please avoid any activities that will distract others who are attempting to listen.

Please power off mobile phones and similar devices in class. Texting and web browsing in class are prohibited.

Testing

Students must take tests at the scheduled time. If you believe that an emergency requires you to miss a test, contact me prior to taking the test. I will attempt to arrange a make-up when a documented emergency arises, but make-ups must be arranged and completed promptly. If your emergency does not permit a prompt make-up, it is possible that added weight will be placed on your final exam in lieu of taking a make-up. An oral examination may also be utilized if deemed appropriate by the instructor. The last two options apply only in the case of a documented and prolonged emergency. 

I will attempt to keep up with the posted schedule in class. If I fail to cover the indicated material by a schedule test date, the test WILL take place as scheduled, but the coverage of the test will be adjusted. 

Please bring a pencil with an eraser for each test. Calculators that perform basic arithmetic operations are permitted. Programmable devices or devices with any information storage capabilities are NOT permitted. You may not access cell phones during a test and may not use a cell phone as a calculator.

If you believe that an error has been made in grading your test, you may return the test to me with a written request describing the grading issue you are concerned with. When tests are regraded, the entire test will be reviewed, with lower as well as higher grades possible on all portions. Requests to have a grade reviewed must be made within one week of the date tests are returned in class.

Accommodating Disabilities

Reasonable accommodations are available for students with a documented disability. If you have a disability and need accommodations to fully participate in this class, contact the Office of Student Disability Services: 777-6142, TDD 777-6744, email sasds@mailbox.sc.edu, or visit LeConte College Room 112A. All accommodations must be approved through the Office of Student Disability Services.

Expectations for the Instructor

I will do my best to facilitate learning, to answer questions appropriately, to be fair and objective in grading, to provide timely and useful feedback on assignments, and to maintain adequate office hours. It is my intention to provide you with the best possible learning experience. 

Study Recommendations

Like most economics courses, this class requires analytical thinking. Casually reading of the text will not be adequate study, nor will casual listening to lectures. Memorization will not substitute for understanding, especially later in semester. You must attempt to master the logic of the arguments that are made by the text and in class. 

I am occasionally asked the following question: “Do I have to know all of the formulas in the book?” In response, I am tempted to reply: “You don’t have to know (memorize) anything, as long as you understand everything.” That may not be an especially helpful response, but it does suggest something about how I think you should study. 

I strongly recommend that you do the following:

1. When confronted with a logical argument, ask yourself if you can work through and understand the argument on your own. Close the book and write it out.

2. For every diagram you see in the text, be able to explain what is plotted and what concept or principle the diagram is illustrating. Can you provide an appropriate caption for each diagram without looking?

3. Practice solving problems like those found at the end of each textbook chapter.

4. If you do poorly at first, consider studying with a group or hiring a tutor. Do not continue to follow an unsuccessful approach.

One last piece of advice: I firmly believe that the best way to get an F in this class is to aim for a C.

Grading and Course Requirements

Grades are determined according to the weighting and grading scheme described below:

Grades are determined according to the scale below:
   

Range	Grade
90-100	A
85-90	B+
80-85	B
75-80	C+
70-75	C
65-70	D+
60-65	D
0-60	F

Notes on Grading: I reserve the right to make small adjustments in the grading scale in a way that might raise some grades (e.g., upward rounding). However, I will not alter the scale in a way that would lower grades. I also will not alter the scale in response to any student request. At the end of the semester, there are always a few students whose average leaves them close to the cutoff for a higher grade, no matter where that cutoff is. This inevitably leads to some disappointment, but this is inherent in the process of grading.

Course Outline and Schedule

Test dates will not change (after the course has begun); however, topics covered on each test are subject to change depending upon progress made in class. I may also add or subtract reading assignments during the semester. Appendices and “Applications” are not required reading unless I specifically indicate that you should read them, but some of you may find them useful.
 

Day	Date	Topic	Reading	Current Events
1	T, 1/12	Introduction	Chapter 1
2	Th, 1/14	Macroeconomic Measurement	Chapter 2
----	F 1/15	Last day to drop/add	------------	------------
3	T, 1/19	Business Cycle Facts	Chapter 8 Read only pp. 276-298
4	Th, 1/21	Productivity, Output, and Employment	Chapter 3
5	T, 1/26	Growth Arithmetic	Chapter 6 Read Only Section 6.1	Quiz! Chapter 2 Quiz Due 3:30 PM.
6	Th, 1/28	Consumption, Saving, and Investment	Chapter 4
7	T, 2/2			Quiz! Chapter 3 Quiz Due 3:30 PM.
8	Th, 2/4	The Asset Market, Money, and Prices	Chapter 7	Who is Greedy? Would You Pay $103,000 for This Arizona Fixer-Upper?  WSJ, 1/3/09 American Dream 2: Default, Then Rent WSJ, 12/10/09 Until Medical Bills Do Us Part (Kristoff) NYT, 8/29/09
9	T, 2/9			Quiz! Chapter 4 and Chapter 7 Quizzes Due 3:30 PM.
10	Th, 2/11	TEST 1	Coverage TBA
11	T, 2/16		Chapter 9
12	Th, 2/18
----	M 2/22	Last day to withdraw without a WF	------------	------------
13	T, 2/23		Chapter 10
14	Th, 2/25			WSJ Readings! A Layoff in the Smith Family Ripples Through Town WSJ, 1/29/2009 Firms Race To Regain Control Over Inventories WSJ, 2/9/2009 Growth Hits 6-Year High WSJ, 1/30/10
----	M 3/1	Semester midpoint	------------	------------
15	T, 3/2		Chapter 11	Quiz! Chapter 9 Quiz Due 3:30 PM.
16	Th, 3/4
17	T, 3/9	SPRING BREAK
18	Th, 3/11	SPRING BREAK
19	T, 3/16		Chapter 12	Inflation in 2008 Slowest Since 1954 WSJ, 1/16/2009
20	Th, 3/18	The Recession		Recession! (Paper on the current recession) Questions and Answers about the Financial Crisis (Gorton) Prepared Congressional Testimony How Did Economists Get It So Wrong? Krugman, NYT, 9/2/2009 The Stimulus Evidence One Year On (Barro) WSJ, 2/23/10 Krugman on Stimulus:  Part I   Part II   Part III  Vice Chairman of Fed to Retire, Letting Obama Reshape Board NYT, 3/2/10
21	T, 3/23			Quiz! Chapters 10 and 11 Quiz Due 3:30 PM.   Quiz! On the Recession Reading Due 3:30 PM. Reflections on a Year of Crisis Bernanke Speech 8/21/2009 What Happened to the 'Depression'? WSJ, 8/31/09, Meltzer New! (3/16/2010) Hoenig on Debt and Inflation
22	Th, 3/25		Chapter 5
23	T, 3/30		Chapter 13	Quiz! On WSJ Reading Due 3:30 PM. Tensions Rise Over Yuan WSJ, 11/18/09
24	Th, 4/1			As Budget Deficit Grows, So Do Doubts on Dollar WSJ,  8/26/2009
25	T, 4/6			Europe's Recovery Stumbles WSJ, 10/14/2009 The Chinese Disconnect NYT, Krugman, 10/22/09
26	Th, 4/8	TEST 2
27	T, 4/13		Chapter 14	Bernanke Is the Best Stimulus Right Now - Robert Lucas WSJ, 12/23/08 The Weekend That Wall Street Died WSJ, 12/29/08 Fed's Gamble: Buying Long Bonds WSJ, 3/19/2009 Political Interference Seen in Bank Bailout Decisions  WSJ, 1/22/2009 Q&A: Former Fed Official Poole on Bernanke and Politics WSJ, 12/3/09 Finding the Right Fix for 'Too Big to Fail' WSJ, 11/25/2009
28	Th, 4/15	Awards Day
29	T, 4/20		Chapter 15	The Coming Deficit Disaster WSJ, 11/21/2009 The Stimulus Bill WSJ, 2/17/2009 All Clunkered Out WSJ, 8/23/09 Federal Intervention Pits 'Gets' vs. 'Get-Nots' WSJ, 6/15/09 Stimulating thoughts, 3rd quarter edition Krugman, NYT, 10/30/2009 An Alternative Stimulus Plan - Boskin WSJ, 11/18/2009 Why No One Expects a Strong Recovery WSJ, 11/20/2009
30	Th, 4/22
31	T, 4/27	Reading Day
32	4/30	Final Exam 9 am