Syllabus - Mypage - Indiana University

Department of Economics, Indiana University
ECON 322
Intermediate Macroeconomic Theory
Summer 2013 Syllabus
Class Information Instructor Contact
Course: ECON 322.13334 Instructor: Fei (Alex) Tan
Time: M thru F 11:00am–12:15pm Office: Wylie Hall 204
Location: Ballantine Hall 304 Off. Hrs: after class & by appt.
TA: Guang Zuo - gzuo@indiana.edu E-mail: tanf@indiana.edu
TA Off. Hrs: by appt. Web: http://mypage.iu.edu/ tanf
Course Description
GENERAL INFORMATION
This course takes an intermediate level approach to macroeconomic theory and its applications,
building on the foundations developed in the introduction to macroeconomics. It will provide
analytical tools and formal models to explain the behavior of output, inflation, employment,
interest rates, exchange rates, and other aggregate economic quantities. This set of tools is
used to understand current economic issues, forecast the behavior of the economy, and assess
the impact of policy choices. This course is meant to train students to think in a structured,
analytically rigorous way about macroeconomic questions. This training will allow students to
use macroeconomics as an analytical tool rather than a set of assorted theories. Finally, it will
help prepare students entering graduate education or starting careers in management, finance,
or economic policy-making.
Prerequisites
E202/S202 (Introduction to Macroeconomics) and E321/S321 (Intermediate Microeconomic Theory).
More generally, students should be familiar with the concepts of supply and demand, the
basics of monetary and fiscal policy, and have some experience using equations, graphs, and
tables to analyze economic situations. Students are also expected to be familiar with functions,
their graphical representation, and the solution of simultaneous equations.
Textbooks
Required: Macroeconomics, 6th Edition, by Olivier Blanchard and David H. Johnson.
Optional: Macroeconomics, 4th Edition, by Stephen D. Williamson.
Online Course Resources:
• Oncourse Website: http://oncourse.iu.edu/portal
• Instructor’s Home Page: http://mypage.iu.edu/ tanf/Courses.html
Course Organization
This class meets for five lectures per week (Monday through Friday from 11:00am – 12:15pm).
Students are expected to have read the corresponding chapter of our required textbook and the
supplementary materials (if assigned) prior to each lecture and should expect to work at least 3
Last Updated: May 27, 2013 1

Department of Economics, Indiana University
hours per day outside of class. Class activities are based on the premise that you have read the
textbook and the materials assigned, at least once, prior to each class. Lectures only compliment
the required reading materials. Lectures are not a substitute for the readings nor are the readings
a substitute for attending and participating in class. After each class the lecture slide of that
class will be posted as online resources on both course websites and you should reconstruct your
notes based upon these materials so that you truly understand the material. You are responsible
for all materials presented in the textbook, lecture, and supplementary materials, as preparation
for an exam.
Course Expectations
Expectations on Classroom Decorum are based on the Code of Student Rights, Responsibilities
and Conduct. Common courtesy and standards of professional conduct require that you arrive
promptly for class, remain attentive for the entire class period, and refrain from any disruptive
behavior. As a community of scholars, we are all dedicated to the pursuit of knowledge, truth,
and excellence. Disturbances that interfere with learning and/or instruction will not be tolerated.
Behaviors that are distracting–arriving late for class, chatting during class, leaving class early,
reading a newspaper, ringing of phones, nonacademic use of laptops, even sleeping–are destructive
to the teaching/learning process and therefore should not occur. Disorderly conduct has no place
in an IU classroom and will be dealt with as personal misconduct according to the Code.
Examinations
IN- & OUT-OF-CLASS ACTIVITIES
The examinations will be either multiple choice, or graphical/numerical problems, or short essay
questions, or any combination of these three. There will be two in-class exams each worth 40%
or 200 points of the course grade. The two exams are scheduled on the following days:
MID-TERM Thursday, May 23 10:30am – 12:30pm
FINAL EXAM Friday, June 14 10:30am – 12:30pm
Attendance Reward
Attendance is not mandatory but strongly recommended. Five unannounced attendance will
be taken throughout the semester and your properly documented attendance will be rewarded
with a maximum of twenty extra-credit points. Each recorded attendance will count as four
points. There will be no extra-credit points given for attendance if you are not in class for any
reason.
Homework
There will be four required homework assignments, each of which is worth 25 points. Late
homework is not graded and will be nullified. Handing in homework in other sections other than
your registered section is not graded and will be nullified. Homework assignments are worth 20%
or 100 points of the course grade.
Last Updated: May 27, 2013 2

Make-Up Policy
Department of Economics, Indiana University
GRADING POLICY
There are no make-up exams. The points from the excused, missed exam will be placed onto the
final exam. No make-ups are provided for homework. The missed homework points, due to an
approved absence, will be considered when calculating your final grade.
Grading Scale
The final grade for the course is based upon the percentage of the number of adjusted total points
earned. There is no grading curve used other than the scale below. Everyone can get an A+ and
everyone can get an F. Please periodically check your grade throughout the semester
for accuracy.
Max Points % of Total Grade Points Percentage
Homework 100 20 A+ 500-485 100-97
Mid-term 200 40 A 484-460 96-92
Final 200 40 A- 459-440 91-88
Total 500 100% B+ 439-425 87-85
B 424-405 84-81
B- 404-385 80-77
C+ 384-370 76-74
C 369-350 73-70
C- 349-335 69-67
D+ 334-320 66-64
D 319-300 63-60
D- 299-275 59-55
F 274-0 54 or less
IMPORTANT MISCELLANEOUS
Please read the following information thoroughly and carefully. I would assume that you have
fully understood these rules during the entire semester.
1. Your schedule must permit you to be free to take the final exam on Friday, June 14,
2013, from 11am to 1pm. There are no alternatives to taking the exam at this time
and date. If you are also enrolled in Economics E321 or any other courses you have a time
conflict, please drop all but one of these conflicting courses now unless you can resolve the
conflict with your instructor(s) in the other course(s). Please do not ask if you may have
an alternative time for the Economics E322 final – you will not be granted this request.
Consult the final exam schedule to avoid additional conflicts.
Last Updated: May 27, 2013 3

Department of Economics, Indiana University
University calendar: you can find information about the university calendar (including
holidays and last day for withdrawal) on the following webpage
http://enrollmentbulletin.indiana.edu/pages/offcal.php?Term=3&s=f6w
2. Indiana University encourages qualified persons with disabilities to participate in its programs
and activities and is committed to the policy that all people shall have equal access
to programs, facilities, and admissions without regard to personal characteristics not related
to ability, performance, or qualifications as determined by University policy, by state
or federal authorities. If you desire classroom/testing accommodations for a disability,
contact your instructor outside of class to present the written supporting memorandum of
accommodation from the Office of Disability Services for Students
(http://studentaffairs.iub.edu/dss/). Requests for accommodations for disability must be
received and authorized by your instructor in written form no less than two weeks in advance
of need, in order to allow adequate time to review and make appropriate arrangements. No
accommodation should be assumed until authorized by your instructor.
3. Academic Integrity: dishonesty of any kind is not tolerated in this course. Dishonesty
includes, but is not limited to, cheating, plagiarizing, fabricating information or citations,
facilitating acts of academic dishonesty by others, having unauthorized possession
of examinations, submitting work of another person or work previously used without
informing the instructor, or tampering with academic work of other students. Students
who are found dishonest will receive the most severe academic sanction consistent
with IU polices. A minimum penalty for any breach of academic integrity is the
grade of “F” for the course. The University of Indiana has information at its website:
http://www.iu.edu/ code/code/responsibilities/personal/index.shtml. Be sure to read the
contents of this site.
4. The last day to withdraw from the class and receive an automatic “W” is Tuesday, May
28th, 2013, by 4:00pm. This is also the last day to get a withdrawal slip signed without
a special petition. After this date, you can obtain a late withdrawal from a course only by
first receiving special permission from the dean of the college. Such permission is VERY
difficult to get. University rules specify that permission for late withdrawals is “given only
for urgent reasons relating to extended illness or equivalent distress” to a student who is
“passing the course on the date of withdrawal.”
5. You are required to pay attention during the entire class time. In general, it is unacceptable
to be late for class, leave early, fall asleep or talk during class. These are disruptions to
the learning environment. If very special circumstances arise and you must be late, then
enter quickly and quietly. Sit in the last few rows. If very special circumstance arise and
you must leave early, sit in the one of last few rows, near a door and stealthily leave so it
is not noticeable.
6. Valid Excuses: during the course many possible events may occur that would result in
your inability to attend class, exams, or perform at a minimally acceptable level during an
examination. The followings can be legitimate reasons to miss class or to be excused from
a scheduled examination.
Last Updated: May 27, 2013 4

Department of Economics, Indiana University
(a) Illness or injury: a note from a physician, physician’s assistant, or a nurse-practitioner
that says, among other things, “..unable to attend..” is required. The words “unable to
attend” must be precisely stated in the note. If the note leaves any ambiguity on this point
you will not be excused. Further, the note must be provided to the instructor within one
week of the missed course event (in cases of extended illness or incapacity, the note must
be provided within a week of the end of your illness or incapacity, and it should specify the
period of your inability to attend the course).
(b) Family emergencies: you must provide verifiable documentation of the emergency.
Given the vast array of family emergencies the instructor will provide precise guidance as
to what constitutes adequate documentation. Unless the emergency is critical you should
notify the instructor in advance of your absence from the scheduled course event. In cases
of critical emergencies, you must notify the instructor within one week of your absence.
(c) University-approved curricular and extra-curricular activities: verifiable documentation
is also required. The student should obtain from the unit or department sponsoring the
activity a letter (or class absence form) indicating the anticipated absence(s). The letter
must be presented to the instructor at least one week prior to the first absence.
(d) Religious holidays: the student should notify the instructor by the third week of the
course of any potential conflicts.
Please note that some modification of policies may be required during the semester. The instructor
will make explicit announcements pertaining to any such changes.
ONE FINAL COMMENT
I recommend the following strategy to get the best grade you can in this class. First, read the
textbook and supplementary materials thoroughly in a timely manner. Come to class regularly,
prepared with questions, and stay engaged in the lecture and all class activities. Missing a
single class will put you significantly behind. Second, you need to remember that economics
is conceptual ideas communicated in mathematical frameworks, which means that you need
to practice drawing graphs and solving problems. Third, because thinking like an economist
involves using the language of economics precisely, you should spend time learning the vocabulary
of the course.
TENTATIVE COURSE OUTLINE
Below is a tentative outline. My goal is to proceed at an optimal pace: slow enough that
important concepts are thoroughly learned, yet fast enough that the course does not drag. It is a
delicate balance. Consequently, this outline is subject to change. Any changes will be announced
in class.
Last Updated: May 27, 2013 5

Department of Economics, Indiana University
Appendix: TENTATIVE ECON 322.13334 SCHEDULE
Week ♯ 1 May 7 Topic 1: “A Tour of the Book”
May 8 Topic 2: “The Goods Market”
May 9 Topic 3: “Financial Markets”
May 10 Topic 4: “Goods and Financial Markets: The IS-LM Model”
Week ♯ 2 May 13 Review ♯ 1
May 14 Topic 5: “The Labor Market”
May 15 Topic 6: “Putting All Markets Together: The AS-AD Model”
May 16 Topic 7: “Phillips Curve, Natural Rate of Unemp., and Inflation”
May 17 Topic 8: “The Facts of Growth”
Week ♯ 3 May 20 Review ♯ 2
May 21 Topic 9: “Saving, Capital Accumulation, and Output”
May 22 Topic 10: “Technological Progress and Growth”
May 23 Midterm Exam: 10:30am – 12:30pm
May 24 Topic 11: “Tech. Progress: The Short, Medium, and Long Run”
Week ♯ 4 May 27 Memorial Day–No class
May 28 Review ♯ 3
May 29 Topic 12: “Expectations: The Basic Tools”
May 30 Topic 13: “Financial Markets and Expectations”
May 31 Topic 14: “Expectations, Consumption, and Investment”
Week ♯ 5 June 3 Review ♯ 4
June 4 Topic 15: “Expectations, Output, and Policy”
June 5 Topic 16: “Openness in Goods and Financial Markets”
June 6 Topic 17: “The Goods Market in an Open Economy”
June 7 Review ♯ 5
Week ♯ 6 June 10 Topic 18: “Output, the Interest Rate, and the Exchange Rate”
June 11 Topic 19: “Fiscal Policy: A Summing Up”
June 12 Topic 20: “Monetary Policy: A Summing Up”
June 13 Review ♯ 6
June 14 Final Exam: 10:30am – 12:30pm
Last Updated: May 27, 2013 6