ECON 303
Intermediate Macroeconomics
Instructor:
Bernard Malamud
–Office: BEH 502
Phone (702) 895 –3294
Fax:
895 – 1354
»Email: [email protected]
Website: www.unlv.edu/faculty/bmalamud
Office hours: MW 9-10am; 11:15am-12:15pm; and by
appointment
Macro News
2007 CPI Inflation: 4.1 %, highest in 17 years!
– Core CPI up only 2.4%.
2007 Housing Construction: Down 25%
– Clark County Home Sales: New – 45%
Existing – 40%
December Index of Industrial Production: No gain
December Index of Leading Indicators: Down 0.4%
December Unemployment Rate: 5.0%, up from 4.7%
December Retail Sales: Down 4%
Index of Consumer Sentiment: Down 18%, Nov - Nov
S & P 500
– December 31, 2007  1468
– January 17, 2008 [Philadelphia Beige Book]  1333
January 22, 2008: 75 Basis Point Fed Funds Rate Cut
Macro Concerns
An impending recession? Stagflation?
–Housing bubble
–Spike in unemployment
–Consumer to the rescue??!?
Oil price rise… the macro impacts
Exploding US trade deficit
–$ depreciation helps … but threatens inflation
– Emerging markets help? INDIA,
NA
CHI
– Other locomotives? Europe, Japan?
See The Education of Ben Bernanke, NY Times Magazine,
1/20/08 http://www.nytimes.com/2008/01/20/magazine/20BenBernanke-t.html?hp
Today’s Headlines
Timely
Targeted
Temporary
Robust
Textbook Macroeconomics
Course Objectives
Refresh your command of …
Macroeconomic terminology
 eco-talk
Macro Facts
Schools of thought
Course Objectives
Master MODELS
– Demand Side Models  AD
Multiplier
IS – LM
Macroeconomics Without LM
– Embed the Fed’s (Bernanke’s) Reaction Function
in the Money Market
– Supply Side Models  AS
Wage setting – Price setting
Phillips Curve
– Role of Expectations … in theory and practice
Macro - variables
Output … Real GDP … Growth Rate
Unemployment
Inflation … CPI, GDP Deflator
Macro Time Frames
Short-run … sticky price
Medium-run … price adjusts
Long-run … economic growth
Where We’re Heading
Develop tools to address macro questions:
– What drives expansions and recessions?
– What holds inflation in check?
– Can the unemployment rate be too low?
What causes unemployment?
– Why do growth rates differ across
countries?
Where to Find the Numbers
http://research.stlouisfed.org/fred2/
www.bls.gov/data/
www.economist.com
www.bea.doc.gov
http://www.gpoaccess.gov/eop/
www.oecd.org