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Intermediate Macroeconomics: Models, Variables, and Analysis

This course in intermediate macroeconomics covers macroeconomic models, variables, and analysis, including demand-side and supply-side models, output, unemployment, inflation, and economic growth. Students will learn about various macroeconomic theories and their real-world applications.

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Intermediate Macroeconomics: Models, Variables, and Analysis

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  1. ECON 303 Intermediate Macroeconomics • Instructor: Bernard Malamud • Office: BEH 502 • Phone (702) 895 –3294 • Fax: 895 – 1354 • Email: bernard.malamud@unlv.edu • Website: www.unlv.edu/faculty/bmalamud • Office hours: MTWThF 9:30-11am; and by appointment

  2. Course Objectives Refresh your command of • Macroeconomic terminology  eco-talk • Macro Facts • Schools of thought

  3. Course Objectives • Master MODELS • Demand Side Models  AD • Multiplier • IS – LM • Supply Side Models  AS • Wage setting – Price setting • Phillips Curve • Expectations … in theory and practice • Solow Growth Model

  4. Variables of Variables of Macroeconomics • Output … Real GDP • Unemployment • Inflation … CPI, GDP Deflator • Time-frames of macroanalysis • Short-run … sticky prices • Medium-run … prices adjust • Long-run … capital accumulates

  5. Introduction • What’s up … What’s down? • Unemployment • Oil price … the macro impacts • $ Exchange Rate • Inflation fears • US trade deficit • Emerging markets: INDIA, CHINA • Housing bubble

  6. Where to Find the Numbers • http://research.stlouisfed.org/fred2/ • www.bls.gov/data/ • www.economist.com • www.bea.doc.gov • http://www.gpoaccess.gov/eop/ • www.oecd.org

  7. Macro Pictures: Jobs

  8. Macro Pictures: Unemployment

  9. Macro Pictures: Fluctuations

  10. Macro Pictures: Growth

  11. Macro Pictures: Core Prices

  12. Macro Pictures: Budget Deficit

  13. Macro Pictures: Exchange Rate

  14. Macro Pictures: Payments Deficit

  15. Mock FOMC Presentations -- July 1, 2008 • 2 – 3 person team Play a Governor of Federal Reserve or President of a District Reserve Bank Powerpoint-assisted presentation • the state of the national economy • allude to current economic conditions in districts • focus on the state of the national economy • recommendation of why, whether and by how much to change the federal funds rate. • phrasing of the statement to be issued at the end of the mock FOMC meeting. • Governor of Federal Reserve or President of a District Bank Familiarize yourself with your official’s positions • recent speeches • minutes of recent FOMC meetings. • Seek guidance from your professor • appointments will be arranged, the earlier the better.

  16. Macroeconomics The course is divided in three parts: Short -run / Medium-run / Long-run Short - run: IS / LM  AD LM: (M/P)d = (M/P)s (M/P)d = L(Y,i) Ms = [1/(c + r(1-c))]H = {money multiplier} x {monetary base} IS:Y = C + I + G C = c0 + c1 YD = c0 + c1 (Y - T) I = I0 + b1 Y - b2 i  Y = {spending multiplier} x {autonomous spending} Medium - run: AD/AS IS/LM  AD PS/WS  AS PS: P = (1+ μ)(W/A) WS: W= Pe Ae f(u,z)  SRAS and MRAS • In medium - run, Pe = P  (W/P)WS = (W/P)PS = A / (1+ μ) • Natural/Structural/Equilibrium Rate of Unemployment (un ) • “Full - employment” rate of output (YFE)The Green Shaft When AD or AS shift: MR equilibrium  SR equilibrium P  new MR equilibrium Productivity and equilibrium rate of unemployment: Ae = A only in long - run  “Natural rate” decreases with unexpected increase in A Long - run: Growth Steady state: s(Y/AN) = (δ + gN + gA )(K/AN) For simple Cobb-Douglas function: Y = Kα (AN)1-α Y/AN = {s/((δ + gN + gA )}α/(1-α) Golden - rule saving rate = α

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