Peter K. Schott

2024 M425 Core Macro (Schott; Spring 2)

Evans Hall Room 2410

This syllabus last updated on 2024.2.10

Red (M/W@1010), Gold (M/W@1300), Blue (T/TH@1010), Green (T/Th@1300), Silver (T/Th@1440)

Introduction

• This course offers a framework for understanding macroeconomic events as they occur, and for interpreting economic commentary of the type that shows up in The Wall Street Journal, the Financial Times, the New York Times and the Economist

Office Hours

• If you would like to meet the professors outside of class, please email us (peter.schott@yale.edu, kevin.donovan@yale.edu) a few times that work for you and I will pick one. Please feel free to email questions at any time; we will try to return them promptly.

Teaching Assistants

• There are 10 teaching assistants for this course: Ben Decker, Mishra Prakhar, Jonatan Hartanto, Sahana Srinivasan, Nik Aleiferis, Henry Joyce, Alex Yeo, Stephanie Lu, Camila Magendzo, Frances Klimczak.

Website

• All course materials including powerpoint slides, problem sets and required additional readings are posted to the course website on Canvas. Slides will be posted before class, and professors will note during class if slides have been updated for lecture.

Required Text

• "Macroeconomics" by Abel, Bernanke and Croushore – 6th edition or later. This text is referred to as ABC on the class calendar. Note that use of older editions is perfectly fine and substantially cheaper. The latest (9th) edition is ISBN-13: 978-0134167398.

Required Readings

• The other required reading is “Germany in the 1990s: Managing Reunification (HBS 9793033).” You might consider reading this case before the course begins so that you can later compare how much your initial understanding of the issues changes as a result of takin the course.

Optional Texts

• There are a number of macro texts on the market, and we try to read or at least scan many of them as they come out. ABC offers a relatively good balance of theory and data. If you want even more macro, you can might enjoy the following. For MORE DATA, see Macroeconomic Patterns and Stories: A Guide for MBAs (Edward E. Leamer). This book is completely unlike other texts on the market. Its emphasis is on data and using data to develop stories. Great book from a great guy (my PHD advisor). For MORE THEORY, see Macroeconomics (Stephen Williamson). This book emphasizes real business cycles and is strong on models. If you don’t already know what "real business cycles" means, you will about half way through the course.

Class Participation

• We expect students to be able to answer questions based on the readings at the beginning of each class session. This class works best if you try to relate the material covered in class to current events as we go along. Toward that end, we encourage you to ask questions / make comments both about material you don’t understand as well as how the material associates with what you read in the papers every day. I strongly encourage you to get in the habit of reading the business sections of the NYT, WSJ, FT or other major publication, such as the Economist.

Assignments

• A master list of problem set questions is posted under \files on Canvas. For each problem set, please answer the questions on the calendar above (e.g., for problem set 1, please answer questions 1 to 10). Problem sets are to be completed in your small groups (<=4 students). All members are responsible for completing the problem sets and ensuring they are handed in on time. There will be no credit for late assignments. Graded problem sets will be returned within 4 days of the due dates noted above and on Canvas.

Review Sessions

• Times and places for review sessions will be provided by the Head TA.

Caveats

• Macro is hard and learning it can be frustrating. Here is some advice based on past experience
• NOTE
• 1. Don’t fall behind: as noted above, a basic goal of the course is to give you a framework (known as “ISLM”) for understanding how economies evolve across the business cycle. Each session of the course contributes to this framework. By class 6 or 7, we have it up and running, and then spend the rest of the time enriching it. Be careful not to let any steps go by without understanding them, or you might find yourself lost three or four weeks into the course.
• NOTE
• 2. Try to apply what you are learning: One of the best ways to test whether you are learning the material is to apply it to the real world. Toward that end, read the macro articles that appear in the WSJ or FT, etc. regularly and try to explain them to yourself and friends. Why did the U.S. Fed just raise rates? How will a low price for oil contribute to U.S. and EU growth? How can you tell if China is slowing down? How would such a slowdown affect the U.S., the EU, the BRICS? Etc. If you can’t explain it, you don’t know it.
• NOTE
• 3. Make full use of the problem sets: The problem sets are designed to test your intuition and ability to apply what you are learning in the real world. You’ll learn much more from them if you try to complete them by yourself first and then have a group meeting where you discuss your answers.
• NOTE
• 4. Keep us in the loop: If you can’t figure something out, be sure to tell us or the TAs so we can help. See number 1.

Grading

• Your grade will be determined by your performace on the final (60%) and problem sets (35%) as well as your class participation (5%).

Academic Integrity

• No student's name should appear on a group project if the student has not contributed to the production of the project. The following is an example of unacceptable conduct: Neo agrees to produce a case write-up, putting Trinity's name on the case write-up. Trinity agrees to repay Neo by producing a subsequent assignment on his own.
• NOTE
• In group work, all group members are responsible for the integrity of work that is submitted. Group members should always question other members about the source of material and analysis that is being included in group projects. If a group member has any concerns about the integrity of material being submitted by the group, that group member should discuss those concerns with the instructor.
• NOTE
• Note that I re-use assignments over time. It is a violation of academic integrity to rely on any work from prior iterations of this or any related course in working on your assignments for this iteration of the course.

Plagiarism

• The members of any academic community are expected not to present ideas or material from other sources as their own. In the context of this course, it is acceptable to, for example:
• NOTE
  • Refer to concepts, frameworks, and analytical tools from the readings or class lectures without citation. For example, you may refer to the five forces, added value, sustainable competitive advantage, signaling, and so on without citing the source.
  • Refer to the material in cases without citations. For example, you do not need to cite the HBS case in your case analysis when you refer to factual information from the text or tables.
  • However, it is not acceptable to quote or paraphrase analysis from another source and present it as your own. For example, it would be unacceptable to find an analysis of your case project company on the web and quote or paraphrase it in the analysis you hand in without correctly attributing it. There is a difference between consulting a source and then forming your own opinion based on what you have read, and "lifting" material directly.

Podcasts

• The following podcasts provide good discussions of the noted topics. If you have suggestions, please let us know and we will add them to the list
• NOTE
  • Money: The Dollar at the Center of the World (NPR 2014)