Syllabus for Econ 499. Winter, 2008 (revised) Michael Twomey Univ. of Michigan, Dearborn
The "textbook" for the course is the Fair's US Model Workbook. You can
either download the workbook in pdf form (36 pages), or read it off the
computer screen.
The student is expected to turn in the following exercises, and three
papers. Although no strict calendar is imposed, this works out to about one
exercise a week, and one paper a month. There will be no exams. The student
should probably read most of the workbook. The page numbers refer to the
workbook, as of November, 2007.
Exercises. (Exercise number, workbook page, and brief description)
- 3.1 (page 20) do some four or
five.: Get to know the data and the programs.
- 4.3 (p. 22), and 4.4 (p. 23):
Government Receipts and Expenditures, Saving
- 5.1 (p. 24): Multiplier from
a change in Government Expenditures
- 5.2 or 5.3 (pages 24, 25):
How alternative monetary specifications affects multipliers when changing
Government Expenditures
- 5.5 or 5.6 (pp. 25, 26):
Change in taxes or a change in transfers
- 5.7 (p. 27): What is the
balanced budget multiplier?
- 6.1 and one of 6.2, 6.3 or
6.4 (pp. 28-29): Tight monetary policy
- 7.2 (p. 30): No increase in
import prices in 1973
- 7.3 (page 30): Stock market
crash
- 8.1 (p. 30): Deficit
reduction
- 8.4 and 8.5 (pp. 31-32):
Decrease in exports with and without Graham Rudman in force
- 9.1 (p. 32): Importance of
the interest elasticity of the demand for money
- 10.1 or 10.2 or 11.1 (pp. 33-34):
interest or price elasticity of aggregate demand
Comments about the exercises.
You should turn in some sort of print-out
indicating what data have been generated and analyzed for each exercise, and a
typed out version of the questions as they appear in the workbook, together
with your answers. Try to make your answers legible (hence typed, not
handwritten) and understandable, but they need be neither long nor eloquent.
Try to avoid e-mailing the exercises. As you get familiar with the program, you
might find it convenient to turn in more than one exercise at a time.
Papers. (see also the bibliography)
- Write a short (5 page)
essay on one of the following three topics: i) A comparison of the
accuracy and the usefulness of the predictions of the Fairmodel, with
respect to those of other commercially available forecasters; ii) A
comparison of the structure of the Fairmodel with that of other publicly
available macroeconomic models, such as those of Klein & Goldberger,
Brookings Institution, UM-AA, Penn/MIT/Fed, St. Louis, etc. By structure
is meant size, method of econometric estimation, degree of theoretical
sophistication of aspects such as consumption, investment, monetary
sector, labor market, foreign trade, crowding out, and the distribution
of income; iii) starting about three decades ago, macroeconomic models
began placing growing emphasis on inflationary expectations, and more
recently the rational expectations perspective has argued the position
that systematic government policy cannot affect real variables such as
output and employment. How well does the Fairmodel incorporate
inflationary expectations, and to what extent does it support the
rational expectations non- interventionist position?
- Create your own
scenario in which you predict what the Bush administration might do
during the next year (taxes and spending) and trace through the economic
impacts of those policies on the deficit, unemployment, and inflation.
Grades. Those economics majors taking this to
satisfy part of their upper division Economics elective course requirements
will need a letter grade. My expectation is that passing grades will be either
an A or a B. People who are satisfied with C's should take another course.
Otherwise, this course can be taken on a pass/fail basis, and it will not be
applied toward the upper division elective requirement for Econ majors.
Plagiarism. Plagiarsim is turning in and
representing as your own, work which was done by someone else. I don't have a
problem with your working with another student occasionally, as long as the
written comments are each individual's. Indeed, I encourage students to share
hints with each other, and otherwise to study together. If you do intend to
work consistently with another student, please let me know beforehand.
Further introductory comments about getting
started are available by clicking here.
Professor Twomey's office is upstairs in the CASL
Annex; he can also be reached at 313-593-5176 (o), 313-995-1907 (h), or by
clicking mtwomey@umd.umich.edu