Economics: Macroeconomic Theory (A)

About ECON 2400 A

Keynesian and other theories of the macroeconomy. Government policies in relation to the problems of employment, price stability, and growth. Prerequisites: ECON 1400, ECON 1450; MATH 1212 or MATH 1234.

Notes

Prereqs enforced by the system: ECON 1400, ECON 1450; MATH 1212 or MATH 1234. PACE students with permission and override.

Section Description

Macroeconomics studies the economy as a whole, focusing on how variables such as output, consumption, investment, savings, employment, wages, interest rates, and inflation evolve over time and respond to economic shocks and government policies. This course develops a cohesive quantitative framework for analyzing the real side of the economy and for evaluating macroeconomic policies in a disciplined, model-based
way. Some of the topics include long-run economic growth (e.g., the Solow growth model, human capital accumulation, and endogenous growth models), business-cycle theory, fiscal policy and government spending, consumption-savings decisions and monetary policy, search frictions and labor market, and international macroeconomics.

Modern macroeconomics is both qualitative and quantitative. We use mathematical models to organize economic intuition and connect them to data through simple calibration, numerical exercises, and evidence-based discussion. Throughout the semester, you will learn how economists transition from assumptions to predictions, and how they use macroeconomic models to interpret real-world events.

A primary goal of this course is to build your comfort with formal economic reasoning and quantitative models. You will learn to read, manipulate, and interpret macroeconomic models, skills that will prepare you for advanced coursework and valuable applications in academia and industry, where clear analytical thinking is crucial. The exams will reflect this emphasis, but the purpose is not math for its own sake: quantitative models are valuable because they sharpen economic concepts and improve our ability to understand the world around us.

Section Expectation

By the end of the course, students will be able to

• Explain how key aggregate variables such as output, investment, employment, savings and inflation
are determined and how they co-move in the long-run and over the business cycle.
• Use a quantitative framework to study the impacts of macroeconomic shocks in the economy and trace their effects on equilibrium outcomes.
• Formulate and solve core macroeconomic models, translating assumptions into clear predictions and economic intuition.
• Evaluate a range of macroeconomic policies (fiscal, monetary, and stabilization policies) and predict their short- and long-run effects under different assumptions.
• Connect models to data using basic quantitative exercises (calibration/simulation) and interpret their results.
• Communicate macroeconomic reasoning clearly—using graphs, equations, and written explanations— to analyze real-world policy debates and economic events.

Evaluation

The course uses a +/− grading system. Letter grades will be assigned only at the end of the semester based on the overall score and class average. If needed, grades will be curved to ensure that the average grade gets at least a B at the end of the semester. The grades are based on exams, problem sets, and quizzes. There will also be opportunities for extra credit at the end of the semester.

Exams. There will be a total of three midterms and a final exam. The midterms are non-cumulative and will take place during the class period. Questions are similar to the problem sets, quizzes, and exercises covered in class, including a mix of true-or-false questions and mathematical problems. The dates of each midterm will be announced in the first week of classes. Students can’t automatically shift the weight of the midterm towards the final exam. Should an unforeseeable event arise, you must contact me before the exam. Otherwise, you will automatically receive a grade of zero. If your absence is excused, the midterm weight will be shifted towards the final exam. Any student who misses two exams, for any reason, will fail the class.

The final exam will be comprehensive, covering the material from the entire semester. The final exam date will also be announced in the first week of classes. The date and place are determined by the Registrar under the direction of the Faculty Senate. The exam will include a mix of multiple-choice questions and model-solving problems. If there is any conflict, please refer to the University of Vermont final exam policy. Feel free to email me if you run into conflicts and are not sure what to do.

Problems Sets. The purpose of the problem sets is to test your knowledge of the class material and prepare you for the exams. Students will have 1 week to do the problem sets. They will be due at 11:30 PM on the announced date, with no time extension, except in cases of emergency or other unforeseeable circumstances. If you need to request an extension, please contact me as soon as possible. You are allowed
infinitely many attempts before the deadline, so you can keep retaking the homework until you get all the questions correct. Only the attempt with the highest score will be counted. There will be 6 problem sets in total and they will be administered online. I will drop the homework with the lowest score.

Quiz. They consist of short weekly assignments that you will complete throughout the semester. They focus on the material covered in the week and are designed to help you reinforce what you have learned in that week. There will be a total of 15 quizzes during the semester, administered both online and in-class with prior notice. Your final quiz grade will be determined by the average of your 10-highest quiz scores.

Important Dates

Note: These dates may change before registration begins.

Courses may be cancelled due to low enrollment. Show your interest by enrolling.

Resources

• Parking
• PACE Course Pricing
• Textbooks