Prof. Bryan Caplanbcaplan@gmu.edu
The course provides a comprehensive survey of modern macroeconomics. It covers the determination of output and the price level, labor markets and unemployment, savings and investment, financial markets, monetary economics, the public sector, macroeconomic policy, and international economics. More generally, students will learn to extend simple supply-and-demand models to understand the history of the world, current global trends, and popular economic fallacies.
I assume that you are familiar with introductory economics, algebra, and very basic calculus.
Most of the course material will consist in detailed notes that will be handed out in class. There will also be required readings in each of the following:
Julian Simon, ed., The State of Humanity
Frederic Bastiat, Economic Sophisms
Frederic Bastiat, Selected Essays on Political Economy
Steven Landsburg, The Armchair Economist
Steven Landsburg, Fair Play
Grading and Exams:
There will be one midterm and a final exam. The midterm counts 30%; the final exam is 45%; homework counts for the remaining 25%. These weights are fixed - improvement on later exams will not retroactively raise your grades on earlier exams.
There is no formal grade for participation, but if you are one of the students who (in my judgment) contributes most to the quality of class discussion your grade will be raised if you are on the borderline between two grades.
There will be approximately six homework assignments during the semester. Depending upon how good a job you do, your homework will receive a check-plus (4 points), a check (3 points), or a check-minus (2 points) if you turn it in; otherwise you receive 0 points. Late homework loses one point. Late homework is no longer accepted after I pass out my suggested answers for a given assignment.
The best way to contact me is by email at firstname.lastname@example.org. Many questions and requests can be satisfied by going to my homepage at http://www.gmu.edu/departments/economics/bcaplan. My office is in 8 Carow Hall; my office number is 3-2324. My official office hours are MWF 2:30-3:30, but you can also schedule an appointment or just drop by and see if Iím available.
My proposed schedule for the semester follows. If it proves too ambitious, I will try to simply say less about each topic rather than cut the topics for the final weeks.
PART I: Classical Macroeconomics: The Long-Run
Weeks 1-3: Aggregate Demand and Aggregate Supply
Simon chapter 2: "Human Mortality Throughout History and Prehistory"
chapter 13: "The Standard of Living Through the Ages"
chapter 14: "Long-Term Trends in the US Standard of Living"
chapter 24: "How 'Poor' Are America's Poor?"
chapter 28: "Trends in the Price and Supply of Oil"
chapter 35: "Agricultural Productivity Before the Green Revolution"
Bastiat, Economic Sophisms, (First Series) chapters 1, 7, 17
Landsburg, The Armchair Economist, chapter 21: "The Iowa Car Crop"
Weeks 4-5: Labor and Unemployment
Simon, chapter 12: "Trends in the Agricultural Labor Force"
Bastiat, Economic Sophisms, (First Series) chapters 2, 3, 20
Week 6: Savings and Investment
Simon, chapter 21: "Trends in the Quantities of Education - USA and Elsewhere"
Landsburg, Fair Play
chapter 13: "People Wanted"
chapter 15: "The Arithmetic of Government Debt"
Landsburg, The Armchair Economist
chapter 14: "The Policy Vice: Do We Need More Illiterates?"
chapter 20: "Random Walks and Stock Market Prices: A Primer for Investors"
Week 7: Money Supply and Money Demand
Bastiat, Economic Sophisms, (First Series) chapter 11
Landsburg, The Armchair Economist, chapter 7: "Why Taxes are Bad: The Logic of Efficiency"
Week 8: Government Spending, Taxation, Levels, and Growth
Bastiat, Selected Essays on Political Economy, chapter 1: "What Is Seen and What Is Not Seen"
PART II: Keynesian Macroeconomics: The Short-run
Week 9: Nominal Rigidities and Short-run Aggregate Supply
Simon, chapter 19: "Trends in Unemployment in the United States"
Week 10: Monetary Policy, Fiscal Policy, and Aggregate Demand
Week 11: Aggregate Demand Policy and Expectations
Landsburg, The Armchair Economist, chapter 23: "New, Improved Football: How Economists Go Wrong"
PART III: Topics
Week 12: The International Economy
Bastiat, Economic Sophisms, (First Series) chapters 4, 6, 12, 13, 18, 19; (Second Series) chapters 13, 14, 15
Week 13: The Macroeconomics of Laissez-Faire and Interventionism: The Great Depression and European Unemployment
FDR's Fireside Chats, "Government and Modern Capitalism"
Week 14: The Macroeconomics of Socialism
Hedrick Smith, The Russians, chapter 9.
Week 15: The Future of Progress
Bastiat, Economic Sophisms, (First Series) Conclusion
Landsburg, The Armchair Economist, chapter 24: "Why I Am Not an Environmentalist"
Simon chapter 9: "The History of Accident Rates in the United States"
chapter 53: "The Carcinogen or Toxin of the Week Phenomenon: The Facts Behind the Scares:
chapter 58: "What Does the Future Hold? The Forecast in a Nutshell"