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College of Business Administration

Depart= ment of Economics

Agg. Economic Conditions & Analysis

Lectur= er: O. Mikhail

ECO 6206-0001

Fall 2= 004

Course Outline

Class Time&= nbsp; &nbs= p; : &= nbsp; Th 18:00 – 20:45.

Location&nb= sp; = : &= nbsp; BA I 110.

Office = ; &n= bsp; = ; : &= nbsp; BA II 302.

Office Hours &n= bsp; : &= nbsp; Tuesday 2:00 p.m. – 3:00 p.m.<= /p>

&= nbsp; &nbs= p; &= nbsp; &nbs= p; Thursday 3:00 p.m. – 5:00 p.m.

Class Web Page : &= nbsp; http://www.bus.ucf.edu/omikhail/Eco6206/Eco-6206.htm<= o:p>

E-Mail = ; &n= bsp; : &= nbsp; omikhail@hotmail.com

= ; &n= bsp; = ; &n= bsp; omikhail@bus.ucf.edu<= o:p>

Phone = &nb= sp; = : &= nbsp; 407-823-4258

Fax &n= bsp; = ; &n= bsp; : &= nbsp; 407-823-3269

Objective

This is a graduate level class in macroeconomics. We present a rigorous treatment of the theoretical and empirical progress of economic growth (Chapters 1 to 3), business cycles (Chapters 4 to 6) models= and macroeconomic policy (Chapters 10 and 11).

We adopt the “theory confronts data” vie= w to build general equilibrium macroeconomic models based on microeconomic principles. This class provid= es both an overview of the field and a solid theoretical foundation in macroeconomics for students who are interested in a career as policy analyst and for students who will pursue more advanced courses and research in macroeconomics and monetary economics. Strong emphasis will be placed on the basis of advanced macroeconomics presented in the first six chapters.

Basic knowledge of calculus and algebra are required. Intermediate-level knowledg= e of microeconomics and macroeconomics are also required. Students are responsib= le for all materials covered in class that is presented in the textbook and in the lecture notes.

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Attend= ance at lectures is not mandatory but is recommended. If you are experiencing any difficulty in this class = (or any other), please arrange a meeting with me to discuss it.

E-mail Policy, Lecture Notes and Class Web = Page

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Office Hours

If my office hours (stated above) conflict = with your schedule and you need to see me, please let= me know so I can arrange a mutually acceptable time to meet.

Evaluation (Preliminary)

Assignments &= nbsp; &nbs= p; &= nbsp; 30 %

Mid-Term Exam (October 21, 2004) 30 %

Final Exam (December 9, 2004) &= nbsp; 40 % = The FINAL EXAM is at 7:00 = p.m.

No extra-credit assignment is given. No ear= ly or make-up exams will be given. The Final Exam is held on Thursday, December 9, 2004 from 7:00 p.m. = to 9:50 p.m.

Assignments

On the class web page, I will regularly post a set of assignments. The purpose= of these assignments is twofold: to prepare the student for the exams and to complement the lectures. I in= tend to give one assignment every week.

Required Book

Rome= r, David. (2001) Advanced Macroeconomics. McGraw-Hi= ll Irwin. Second Edition. ISBN: 0-07-231855-= 4

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Optional Additional Book=

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Ben J. = Heijdra and Frederi= ck Van Der Ploeg (2002) <= span style=3D'mso-bidi-font-weight:bold'>The Foundations of Modern Macroeconomics. Oxford University Press. ISBN= : 0198776179

Reading List ( ± one week )

Additional class n= otes and articles will be posted on the class web page.

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Weeks 1 - 2 Introduction.

<= span class=3DGramE>Stylized Facts.

· Business Cycle.

<= span style=3D'mso-list:Ignore'>o&nb= sp; Notes. Stylized Facts by Manuel Walti (2000).

· Gr= owth.

<= span style=3D'mso-list:Ignore'>o&nb= sp; Cl= ass Notes. Kaldor, Jones and R= omer.

<= span class=3DGramE>Tools.

§<= span style=3D'mso-list:Ignore'>o&nb= sp; Class Notes. The eight tools for economists.=

§o Chapters 2 and 4. Dynamics by Ronald Shoe (1997).

§o = Chapter 7. Elements of Dynamic Optimization = by Alpha C. Chiang (2000).

Economic Growth.

Solow-Swan.

o&nb= sp; Chapte= r 15. Using Mathematics in Economic Analysis by Peter Hess (2002).

o&nb= sp; Chapte= r 1. Romer (2001).

Weeks 3-4 In= finite-Horizon and Overlapping-Generations Models.

§ = Ramsey= -Cass-Koopmans model and Diamond model.

o&nb= sp; Chapte= r 2. Romer (2001).

Week 4 N= ew Growth Theory (Optional).

§ = Resear= ch & Development models and Cross-Country Income Differences.

o&nb= sp; Chapte= r 3. Romer (2001).

Week 5 Real-Business Cycle (RBC) Theory.

§ = Baseli= ne RBC and Extensions.

o&nb= sp; Chapte= r 4. Romer (2001).

o&nb= sp; Kydland and Prescott (1982) “Time to build and aggregate fluctuations,” Econometrica 50(6), November, pp. 1345-1369.

o&nb= sp; Edward= C. Prescott (1986) “Theory ahead of business cycle measurement,” <= i>Federal Reserve Bank of Minneapolis Quarterly Review, Fall<= /span>, pp. 9-22.

o&nb= sp; Robert= G. King, Charles I. Plosser and Sergio T. Rebelo (1988) “Production, growth and business = cycles I: The basic neoclassical model,” Journal of Monetary Economics 21(2), March, pp. 195-232.

Week 6 = ; Tra= ditional Keynesian Theories of Fluctuations.

§ Aggreg= ate Demand and Aggregate Supply.

§ = IS/LM.=

§ = Open E= conomy and the Mundell-Fleming Model.

§ = The Na= tural Rate and the Phillips Curve.

§ = Money = and Output: The St. Louis Model.

o = Chapte= r 5. Romer (2001).

Week 7-8 &nb= sp; Microeconomic Foundations of Incomplete Nominal Adjustment.

<= span style=3D'mso-bookmark:OLE_LINK1'>§ = The Lu= cas imperfect-information Model.

<= span style=3D'mso-bookmark:OLE_LINK1'>§ = Stagge= red Price Adjustment.

<= span style=3D'mso-bookmark:OLE_LINK1'>§ = New Keynesian Economics.

o = Chapte= r 6. Romer (2001).

Week= 9 &= nbsp; MID-TERM EXAM &nb= sp; October 21, 2004

Week 10 &nbs= p; Consumption.

<= span style=3D'mso-bookmark:OLE_LINK1'>§ = The Life-Cycle, Permanent-Income Hypothesis and the Random Walk Hypothesis.

o = Chapte= r 7. Romer (2001).

Week 11 &nbs= p; Investment.

<= span style=3D'mso-bookmark:OLE_LINK1'>§ = Adjust= ment Costs, Tobin’s q and Uncertainty.

o = Chapte= r 8. Romer (2001).

OR

Week 10 &nbs= p; Unemployment.

<= span style=3D'mso-bookmark:OLE_LINK1'>§ = Effici= ency-Wage, Shapiro-Stiglitz, Insider-Outsider and Search/ = Matching models.

o = Chapte= r 9. Romer (2001).

Week 11 = ; Inflation and Monetary Policy.

<= ![if !supportLists]>§ = Moneta= ry Policy and the Term-Structure of Interest Rates.

<= ![if !supportLists]>§ = Incons= istency.

<= ![if !supportLists]>§ = Seignorage and = the Costs of Inflation.

o&nb= sp; Chapte= r 10. Romer (2001).

Weeks 12-13 Budget Deficits and Fiscal Policy.

<= ![if !supportLists]>§ = Ricardian Equiv= alence, Tax-Smoothing, Strategic Debt Accumulation and Debt Crises.

o&nb= sp; Chapte= r 11. Romer (2001).

Week 14&nbs= p; November 25-27, 2003 &n= bsp; Thanksgiving

Week 15 &nbs= p; Review.

Academic Dates and De= adlines	=
Classes Begin=	August 23
Late Registration and Ad= d/Drop	August 23-27 =
Withdrawal Deadline=	October 22
Registration Appointment= Date and Time for Spring 2005 on POLARIS	October 25
Classes End; Last Day to= Remove Incomplete	December 4
Final Examination Period=	December 6-11=
Commencement<= /span>	December 13-14
Grades Due in Registrar'= s Office (noon)	December 15 <= /span>
Grades Available on POLA= RIS (begins at 9 a.m.)	December 17 <= /span>

Fall 2004 Holidays	=
Labor Day	September 6 <= /span>
Veteran's Day	November 11 <= /span>
Thanksgiving<= /span>	November 25-27
Fall 2004 Special Eve= nts	=
Homecoming Week (classes= still held)	November 1-6 =

THE UCF CREED

Integrity, scholarship, community, creativity, and excellence are the core values
that guide our conduct, performance, and decisions.

Integrity

I will practice and defend academic and perso= nal honesty.

Scholarship

I will cherish and honor learning as a fundam= ental purpose
of my membership in the UCF community.

Community

I will promote an open and supportive campus environment by
respecting the rights and contributions of every individual. <= /p>

Creativity

I will use my talents to enrich the human experience.

Excellence

I will strive toward the highest standards of performance in any endeavor I undertake.

http://pegasus.cc.uc= f.edu/~admissio/creed.htm