Economics 110, Section 3: Introduction to Economic Theory

Professor Christiaan Hogendorn
Fall 2011

Syllabus

SW = Joseph Stiglitz and Carl Walsh, Economics, 4th Edition, Norton, 2006, or 3rd Edition.
Chapter numbers are from 4th edition, with 3rd edition in [brackets].
Items marked with # are not yet available.

Course Policies and Grading

I. Introduction
Sept. 6 T 1. A Brief History of Economics
SW: 1 [1]
Review: SW: 2 Appendix [2 Appendix]
Sept. 8 Th 2. Money, Inflation, and "Why is Economics the Dark Side?"
SW: 28 pp. 615-620 [25 pp. 518-523]
SW: 23 all [23 pp. 472-479]
BLS Consumer Price Index Data

II. Economic Policy Using Supply and Demand
Sept. 13 T 3. Markets for Goods and Services
SW: 3 [4]
EIA Petroleum Data
Sept. 15 Th 4. Analysis in the Supply and Demand Model
SW: 4 [5]
Sept. 20 T 5. Consumer and Producer Surplus
SW: 10 [10] read up to General Equilibrium
Sept. 22 Th Class Canceled
Sept. 27 T 6. Quantity Controls and Taxes
Review discussion of taxes in SW 4 [5] and SW 10 [10].
Tax Rates
Sept. 29 Th 7. International Trade
SW: 19 [18]
Oct. 4 T 8. Externalities and the Environment
SW: 18 [21]

III. Firms
Oct. 6 Th 9. The Nature and Value of a Firm
SW: 9 [9]
Oct. 11 T FIRST MIDTERM
Covers classes 1-7, Problem sets 1-4.
Oct. 13 Th 10. Production and Costs
SW: 6 [7]
Oct. 18 T 11. The Perfectly Competitive Firm
SW: 7 [8]
Oct. 20 Th 12. The Imperfectly Competitive Firm
SW: 12 [12]
Oct. 25 T FALL BREAK
Oct. 27 Th 13. The Labor Market
SW: 8 [9]
Nov. 1 T
Cancelled		 15. Imperfect Factor Markets
SW: 16 [15]
Nov. 3 Th 16. Introduction to Macroeconomic Models
SW: 21, 22 [22, 23]
SW: 24 [24]
BEA GDP Data
Nationmaster GDP Data

IV. Introduction to Macroeconomics
Nov. 8 T
Election Day		 14. The Capital Market and the Real Interest Rate
SW: 39 [17]
Nov. 10 Th 17. Savings, Investment, Government
SW: 25, 26 [26]
IMF Savings and Investment Data
Nov. 15 T 18. Growth
SW: 27 [27]
Eswar Prasad, Raghuram Rajan, and Arvind Subramanian, "The Paradox of Capital," Finance and Development, 44(1), March 2007.
BLS Productivity Data
Background: Dani Rodrik, "Making Room for China in the World Economy," American Economic Review, 2010.
Nov. 17 Th 19. Central Banks
SW: 28 pp. 618-632 [25 pp. 518-528]
Phil Davies, "Right on Target: A behind-the-scenes look at open market operations, the Fed's big stick of monetary policy," The Region, December 2004: 39-48.
Background: Interview with Gary Gorton, Yale University finance economist on the growth and collapse of shadow banking, The Region, December 2010.
Nov. 22 T SECOND MIDTERM EXAM
Covers classes 8-17, Problem sets 5-7.
Nov. 24 Th THANKSGIVING RECESS

V. Fluctuations
Nov. 29 T 20. Money and the Real Economy
SW: 28 and 34 [25 and 34]
Federal Reserve Money Supply Data
Niel Willardson, "Actions to Restore Financial Stability," The Region, Federal Reserve Bank of Minneapolis, December 2008.
Dec. 1 Th 21. Unemployment and Business Cycles
SW: 29 [28]
NBER Business Cycles
BLS Unemployment Data
Dec. 6 T 22. Aggregate Demand and Inflation
SW: 31 [30]
Dec. 8 Th 23. Inflation and Unemployment
SW: 37 [31]

24. Household Choices Revisited
SW: 5 Appendix [6 Appendix]

Review Session
2:00-3:30pm

Dec. 16 F FINAL EXAM
2pm - 5pm