Spring 2003

Dr. Dao

MWF 11:00-11:50

ECN 4689: Theory and Research (Part II)

Topics to be covered:

__MACROECONOMIC STATISTICS __(Dornbusch, Fischer, Startz, chapters 2 and
7)

Gross National Product

Other Measures of Income

Nominal versus Real Values

- Nominal GNP
- Real GNP
- GNP Deflator

Employment and Unemployment

Measuring Inflation

- Consumer Price Index

Problems with the CPI

- Redistribution of Income and Wealth
- Inefficiencies

__MACROECONOMIC THEORY __(Dornbusch, Fischer, Startz, chapters 5, 6, and
9-11)** **

The Income-Expenditure Model

- Consumption Spending
- Equilibrium
- Tax Analysis

IS-LM Analysis

- The IS Curve
- The LM Curve
- Full Employment and Inflation

Aggregate Demand and Aggregate Supply Analysis

- The Aggregate Demand Curve
- The Aggregate Supply Curve
- Inflation and Stagflation

__MONEY AND BANKING __(Dornbusch, Fischer, Startz, chapters 15 and 16)

The Financial System

- Financial Intermediaries
- "Fractional Reserve Banking"

Money Classifications

- M1
- M2

The Money Creation Process

- Real World Complications

The Federal Reserve System

- FUNCTIONS
- MONETARY POLICY

The Demand for Money

Monetary Policy

Monetarism

- Equation of Exchange
- Quantity Theory of Money

Tenets of Modern Monetarism

__INFLATION AND GROWTH __(Dornbusch, Fischer, Startz, chapters 7 and 3)**
**

Inflation

- Phillips Curve
- Inflationary Expectations
- Accelerationist Hypothesis
- Cost-Push and Supply-Shock Inflation
- Rational Expectations

Economic Growth

- Productivity
- Productivity and Living Standards
- Increasing Productivity

Supply-Side Economics

- Laffer Curve

__STATISTICS APPLIED TO ECONOMICS II __(Newbold, Carlson, and Thorne, chapters
9-12, 17-18)** **

Hypothesis Testing

Regression

(A) **Simple Regression**

(B) **Ordinary Least Squares Estimation**

(C) **Multiple Regression**

Towards the end of the course, students are required to take an examination in the fields of macroeconomics and statistics comparable to the external GRE in Economics.