Economics 442: Macroeconomic Policy

This site provides resources for students in Economics 442 at the University of Wisconsin, Madison for Spring 2018 Semester

Source:FRED via St. Louis Fed FRED.

Syllabus | Academic Integrity | Important Dates | Downloadable Course Materials and Information Sources | Department of Economics Robert M. LaFollette School of Public Affairs |

Instructor
Professor Menzie Chinn
Office Hours: M 12:45-2:15, W 1:45-2:15
Office: 7418 Social Sciences Bldg.
Phone: (608) 262-7397
email: mchinn [at] lafollette.wisc.edu
Home Page

Course Syllabus

Econ 442 Syllabus in PDF file.

This course will address current issues in modern macroeconomic policymaking, including: (1) the causes of growth slowdown; (2) the efficacy of fiscal and monetary policy, (3) the impact of policy uncertainty, (4) international macro policy challenges, (5) the recent behavior of inflation. Prerequisites: Econ 301 or 311, and Econ 302 or 312, and Econ 310.

The required textbook is Olivier Blanchard, Macroeconomics 7/e (Prentice-Hall, 2017). Other required readings are listed below. In addition, some readings from Econbrowser will be assigned.

Notes Regarding Academic Integrity

Examples of academic misconduct include, but are not limited to: cheating on an examination (copying from another student's paper, referring to materials on the exam other than those explicitly permitted, continuing to work on an exam after the time has expired, turning in an exam for regrading after making changes to the exam), copying the homework of someone else, submitting for credit work done by someone else, stealing examinations or course materials, tampering with the grade records or with another student's work, or knowingly and intentionally assisting another student in any of the above. Students are reminded that online sources, including anonymous or unattributed ones like Wikipedia, still need to be cited like any other source; and copying from any source without attribution is considered plagiarism.

The Dept. of Economics will deal with these offenses harshly following UWS14 procedures:

1. The penalty for misconduct in most cases will be removal from the course and a failing grade,
2. The department will inform the Dean of Students as required and additional sanctions may be applied.
3. The department will keep an internal record of misconduct incidents. This information will be made available to teaching faculty writing recommendation letters and to admission offices of the School of Business and Engineering.

Grievance Procedure: The Department of Economics has developed a grievance procedure through which you may register comments or complaints about a course, an instructor, or a teaching assistant. The Department continues to provide a course evaluation each semester in every class. If you wish to make anonymous complaints to an instructor or teaching assistant, the appropriate vehicle is the course evaluation. If you have a disagreement with an instructor or a teaching assistant, we strongly encourage you to try to resolve the dispute with him or her directly. The grievance procedure is designed for situations where neither of these channels is appropriate. If you wish to file a grievance, you should go to room 7238 Social Science and request a Course Comment Sheet. When completing the comment sheet, you will need to provide a detailed statement that describes what aspects of the course you find unsatisfactory. You will need to sign the sheet and provide your student identification number, your address, and a phone where you can be reached. The Department plans to investigate comments fully and will respond in writing to complaints. Your name, address, phone number, and student ID number will not be revealed to the instructor or teaching assistant involved and will be treated as confidential. The Department needs this information, because it may become necessary for a commenting student to have a meeting with the department chair or a nominee to gather additional information. A name and address are necessary for providing a written response.

Important Dates

• Midterm 1: 2/28
• Midterm 2: 4/4
• Term paper due: 5/4 (Fri).

Course Materials and Sources of Economic Information

Downloadable Course Materials

• Lecture 1 (1/22)
• Problem Set 1 due 2/12
• Problem Set 1 Answer Key due 2/12
• Lecture 7 (2/14)
• Problem Set 2 due 2/21
• Spring 2017 Midterm 1
• Lectures 9-10 (2/21-26)
• Problem Set 2 Answers due 2/21
• Midterm 1 Answers
• Midterm 1 Histogram/Grades
• Lecture 11 (2/26)
• Lecture 12 (3/5)
• Lecture 13-14 (3/7-12)
• Problem Set 3 due 3/19
• Handout on Taylor Rules
• Lectures 15-16 (3/14-19)
• Problem Set 3 Answers due 3/19
• Spring 2017 Midterm 2
• Lecture 17 (3/21)
• Paper Assignment due 5/4
• Midterm 2 Answers
• Midterm 2 Histogram/Grades
• Lecture 22 (4/16)
• Lecture 23 (4/18)
• Problem Set 4 due 4/30
• Lecture 25 (4/25)
• Lecture 27 (4/30)
• Problem Set 4 Answers due 4/30

Required On-line Readings

• CBO: CBO, Budget and Economic Outlook: 2018-2028, April 2018, Chapter 1 [link]
• ISLM: Notes on IS-LM. [link]
• PCO: Notes on Portfolio Crowding Out. [link]
• KS: John Kitchen and Menzie Chinn, Financing U.S. Debt: Is There Enough Money in the World – and At What Cost?" International Finance (2012). [link]
• ADAS: Notes on Aggregate Demand/Aggregate Supply [link]
• SS: Secular Stagnation: Facts, Causes, Cures. [link]
• Chinn, “Fiscal Multipliers” Palgrave Encyclopedia of Economics [link]
• Open: Notes on Open Economy Macroeconomics [link]
• BBD: Baker, Bloom and Davis, “Has Policy Uncertainty Hampered the Recovery” [link]
• FHSW: Fernald, Hall, Stock, Watson, “The Disappointing Recovery in Output since 2009” [link]
• BFR: Byrne, Fernald, Reinsdorf, “Does Growing Mismeasurement Explain Disappointing Growth?” [link]
• BCS: Blanchard, Cerutti, and Summers, “Inflation and Activity” [link]

Newspapers/serials

• WSJ student subscription link
• Economist student subscription link
• Financial Times student subscription link

Additional Readings

• Bob Arnold, "How CBO Produces Its 10-Year Economic Forecast," Working Paper 2018-02 (February 2018).
• Furman, "Extracting the Signal from the Noise: 7 Tips for Interpreting Macroeconomic Data," Milken Institute Review (2016).
• Ferrera, Lhuissier, Tripier, "Uncertainty Fluctuations: Measures, Effects and Macroeconomic Policy Challenges ," CEPII Policy Brief 20 (December 2017).
• Baker, Bloom and Davis, "Measuring Economic Policy Uncertainty," Quarterly Journal of Economics, 131(4).
• GS Global Macro Research, "Top of Mind: Rundown on Runoff," September 2017.
• Greenlaw, Hamilton, Harris, West, "A Skeptical View of the Impact of the Fed’s Balance Sheet," US Monetary Policy Forum paper (2018)
• CEA, Assesssing the State of the Economy in Real Time using Headline Economic Indicators (January 11, 2017)
• Economic Report of the President, 2018

Tracking the Crisis and Recession

• Cleveland Fed "Credit Easing Tools"
• St. Louis Fed "Tracking the Global Recession
• NY Fed "Timelines of Policy Responses to the Global Financial Crisis

Weblogs and Perspectives

• Econbrowser (UCSD and UW-Madison) blog
• Wall Street Journal Real Time Economics
• Atlanta Fed's Macroblog
• SF Fed "FedViews"
• Calculated Risk
• Greg Mankiw's (Harvard) blog
• Brad DeLong's UC Berkeley blog
• Council on Foreign Relations Geo-Graphics

Economics and Economic Policy Links

• Resources for Economists Extensive links to data sources, working papers and organizations.
• American Enterprise Institute Right of center think tank.
• Brookings Institution Moderate/left of center think tank.
• Peterson Institute for International Economics
• Institute for International Finance Think tank associated with international banks.
• Economic Policy Institute Left of center labor-oriented think tank.

International Organizations

• International Monetary Fund
• Bank for International Settlements Central banks' central bank.
• Organization for Economic Cooperation and Development Developed country research organization.

U.S. Government Agencies

• White House Council of Economic Advisers
• U.S. Department of the Treasury
• Congressional Budget Office Nonpartisan analytical agency of the Congress.
• Federal Reserve Board

Current and Historical Data

• St. Louis Fed economic database Thousands of time series on economic activity, in an easily downloadable form.
• IMF International Financial Statistics via UW Data and Information Services Center
• YCharts Macro and equity market data series.
• Yahoo finance website Current financial data.
• Google finance website Current financial data.
• ino.com Futures data.
• Federal Reserve Board data Monetary, financial and output data collected by the Nation's central bank.
• Bureau of Economic Analysis, Dept. of Commerce Data on GDP and components (the national income and product accounts) as well as other macroeconomic data.
• Bureau of the Census, Dept. of Commerce Data on the characteristics of the US population as well as of US firms.
• Bureau of Labor Statistics, Dept. of Labor Data on wages, prices, productivity, and employment and unemployment rates.
• Energy Information Agency, Dept. of Energy Data on energy (electricity, gas, petroleum) production, consumption and prices.
• Economic Report of the President, various years. The back portion of this annual publication contains about 70 tables of government economic data.
• Economic Indicators CEA and JEC Compilation of economic data in tabular form.
• Economic Time Series page A large collection of economic time series.
• NBER Data Specialized economic databases created by economists associated with the National Bureau of Economic Research.