Thursday, April 3, 2008

Lecture 1 - Introduction

Professor Woo introduced himself to us. Most of the introductory information is on the course web page/syllabus which is linked from his home page. Here are some miscellaneous notes that I took:

Professor Woo received his PhD from Harvard and worked at the OECD in Paris.

The course will focus on macroeconomics, including productivity growth, employment, the boom/bust cycle, international trade and the flow of capital. We'll be discussing very relevant issues such as the impending recession, the banking crisis and policy setting.

We'll start each class with a discussion of a theoretical model in a highly analytical way. Examining the theoretical model will be an intellectual exercise, but with a purpose. We'll look at real data and interpret current events and apply/compare them to the model to see if the model adequately explains the data and events.

Class Goals

This class will not make you an economist. However, one of the high-level goals of the class is to get you to a level at which you can read the Financial Times, Wall Street Journal, The Economist, etc and understand them.

A note about economics articles: They're not always right! Reporters often get things wrong, so don't take anything you read, especially in the popular press, as absolutely true.

Textbook, Readings and Lectures

Our textbook is Mankiw's Macroeconomics Sixth Edition. (Mankiw is a Harvard economics professor and has a popular blog.) The textbook is written very clearly and simplifies complex concepts. Be aware, though, that you sometimes lose some of the detail through abstraction and simplification.

The textbook will be supplemented by outside readings which are either posted on the class web site or will be provided in hardcopy in class. Readings can be read either before or after the topic has been covered in class - your choice. As a suggestion, Prof Woo mentioned that it may be easier to read the articles after learning about the model in class first.

The lectures don't follow the chapters of the textbook strictly. For example, there isn't much discussion in the textbook on financial markets. We will be covering that topic in the lecture though.

Exams and Group Project

Readings are great, but the lectures are the most important in terms of preparing for the exams.

Midterm and Final are each worth 40% of grade.

Midterm is take-home. The exam will be emailed to us and you will turn it in via email as well. The timing of the exam wasn't totally clear to me. It sounded like Prof Woo will email it out on the day of the 5th week of class (no lecture that day) and that it's due by the day of the 6th week of class. Expect to spend half a day preparing the answers if you've kept up with the readings. (Is that half of a work day - 4 hours? Half of normal waking hours - 8 hours? Half of a full day - 12 hours?)

There will be 2 parts to the midterm:
1. Economic statements. Answer whether they are true or false and explain. Explanation is very important, of course.
2. I didn't catch exactly what the second type of question will be. Maybe someone else can fill me in on that.

The Final Exam will be in-class, closed-book and not cumulative. It will consist of multiple choice questions and an analysis (short essay) section.

There is a group project that is 20% of the final grade. Groups are limited to 4 people max. All members receive the same grade - it's hard to evaluate individual effort in a group project. The paper should be about 15 pages. He's not concerned with format (don't bother making it fancy and look pretty), but he is concerned with the content. You don't need to think about a topic until about the 3rd or 4th week of the class, so you have a better idea of the type of things we'll be covering. (Personally, I'd like to get a jump on this.)

Although it's not formally worked into the final grade 40-40-20 formula, contributing to class will merit consideration when a grade is on the borderline.

No Blackboard.

One of the best assessments of the US economy is the Monetary Policy Report to Congress which is prepared to by the Federal Reserve Board and delivered in February and July of each year. (Feb and July are only 5 months apart. Not a very even split of the year. I wonder why they chose those months specifically...) It's pretty heavy reading, but its contents are supported by both theoretical model and empirical evidence. Take it to bed with you. (It's sure to help you fall asleep.)

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