Econ 13 Macroeconomics

Summer 2004, July 26 - August 31

Fred E. Foldvary

Santa Clara University


Class web site:

Textbook web site:

Aplia web site: (class key: CJ8J-3TSF-BBVD, cost: $28)

Kenna 212, 4 units, MTR 8:00-10:10:10 AM, sec. #40109

Telephone: office 408/554-6968; home 510/843-0248

e-mail: [email protected] (use Econ13 for the subject)

Office hours: Monday, Tuesday, & Thursday 10:30-11 AM and by appointment, Kenna 209.

Fax (econ dept.) 408/554-2331

Please do not email me any attachments.

Do not email me any problem sets; they must be on paper.

If you cannot come to class, place assignments in my mailbox, Dept. Of Economics, Kenna 3rd floor.

Course overview:

The principles of macroeconomics involve national aggregates, economy-wide equilibria, and the origin and effects of government policy. Aggregates include national output and income (their size, components, growth, and fluctuations), money, unemployment, and inflation. Major macroeconomic equilibria include interest rates, the price level, and foreign currency exchange rates. Policy includes taxation, banking, borrowing, spending, regulations, foreign exchange, and institutions such as the Federal Reserve Bank.

The purpose and objective of the course is to enable you to gain a long-term understanding of the basic principles of macroeconomics and to be able to analyze economic issues. My aim is for you to be able to understand and apply economic concepts as an enlightened citizen, investor, and participant in organizations. You will learn how to "keep it real" by understanding the economic reality behind the superficial appearance of economic activity

Biographical sketch:

Fred E. Foldvary received his B.A. in economics from the University of California at Berkeley, and his M.A. and Ph.D. in economics from George Mason University, Virginia. He is the author of The Soul of Liberty, Public Goods and Private Communities, and Dictionary of Free-Market Economics. He edited Beyond Neoclassical Economics and co-edited The Half-Life of Policy Rationales. His areas of research include public finance, business cycles, governance theory, social ethics, and the economics of real estate.

Elements of the Class

The following constitutes an agreement between me the instructor and you the student.

By staying in the class, you agree to the terms of the syllabus.

Use of class time

The usual structure of class time is:

1. Possible quiz; general announcements and news. 2. Hand back assignments and go over them.

3. Discussion of feedback on previous class. 4. Lecture and discussion of new material.

5. Your brief daily summary of what you learned and what needs to be clarified.

If you think class time can be used more effectively, please let me know. I will assume that you agree class time is being used effectively unless you let me know otherwise.

Expressing yourself.

You are encouraged to express yourself in class freely and openly by raising your hand. Do not fear to ask a question. All questions relevant to the class topics are good questions. Usually, other students may have a similar question. You are also encouraged to send me suggestions by email or at my office. If you feel you are not able to fully express yourself freely, please let me know. I assume you agree you are encouraged to express yourself freely unless you say otherwise

Student progress.

Your scores on problem sets, exams, and reports will be recorded on computer, and I will occasionally post them on the class web site. You will be assigned a number, and this will be shown rather than your name. If you don't wish to be included in this viewing, let me know. I am concerned with your success and progress, and will let you know your status at any time on request. I assume that you agree that I am being actively helpful with your progress unless you say otherwise

Grades and the criteria for evaluating your work.

The maximum points for each category are:

First midterm exam: 144 points

Second midterm exam: 144 points

Third midterm exam: 144 points

Final exam: 288 points

Quizzes, problem sets, reports 210 points

Term paper 50 points

Oral Exam 20 points

total = 1000 points.

There will be an conversation and oral exam in my office. You don't need to prepare for it. It will usually last about 10 minutes. These conversations will help me get to know you better and see how you are developing your economic understanding.


A : 921-999, A-: 900-920, B+: 880-899, B : 821-879; B-: 800-820;

C+: 780-799, C : 721-779, C-: 700-720; D+: 680-699; D : 621-679; D-: 600-620, F : 0-599

All problem sets, quizzes, and exams are open book - the purpose is to test your ability to analyze rather than memorize. All assignments must be submitted on paper, not by e-mail.

Essays are graded by the following criteria:

1) presentation (language, legibility, organization);

2) how completely they cover a topic;

3) focus (avoiding irrelevancies and redundancies);

4) knowledge of the relevant theory, facts, and terms, and defining of key terms;

5) warranting (by clear, sound, organized reasoning) and citing of sources.

For the term paper, you will select a local economy such as a city block, a dormitory, apartment complex, or business district, and determine its total income and output, as well as the factor incomes, the imports and exports, and a brief description of the economy.


The class starts exactly on time. There may be a timed quiz at the start of class. To obtain full credit for problem sets and exams, if you are unable to attend class and on time, contact me by e-mail, fax, or letter and submit your assignment in my mailbox as soon as you can. Without advance notice or a bona fide reason, submissions after the class date for which it is due will be reduced by 20% of the total maximum score. After the following class date, the grade will be zero. Make-up midterms must be scheduled before the midterm date unless there is some emergency.

Text books

Principles of Macroeconomics, 3rd edition, by N. Gregory Mankiw

Aplia online readings, experiments, and problem sets.

Reading Assignments

Note: Aplia assignments will be announced in class and on the Aplia web site.

The schedule is approximate; sometimes we may be ahead or behind.

Week 1. July 26+ . Chapters 8, 10-12

Register with Aplia.

Macroeconomic models, taxation and the social surplus, GDP

Indexing, growth

Week 2. Aug. 2+ Chapters 13-16

First midterm. Savings, finance. Unemployment, monetary system.

Week 3. Aug. 9+ Chapters 17-20

Money growth, open economy, aggregate demand and supply. Second midterm.

Week 4. Aug. 16+ Chapters 21-23

Policy and trade-offs.

Week 5. Aug. 23+

Class project due May 23. Economic simulation. Third midterm. Review for final exam.

Final exam: Tuesday, Aug. 31.