Outline For Macroeconomics

McGill University
Winter 2013

Professor Christopher Ragan
Leacock 321-C

Economics 295B

Introduction to Macroeconomic Policy
Tuesdays and Thursdays, 4:00 pm – 5:30 pm, Leacock 132

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I. Housekeeping Details
1. Office Hours. My office hours are Tuesdays and Thursdays from 10:00 am - 11:00 am. If you are unable to see me then, please speak to me to arrange an appointment.
2. Required Textbook and MyEconLab. The textbook for this class is the macroeconomics half of Economics, by C. Ragan and R. Lipsey (13th Canadian Edition, published by Pearson Canada).
You can also purchase the macro half separately; Macroeconomics (same authors, same publishers). Both are available at Paragraphe bookstore.
 With new versions of the
Broad Course Outline
Part A: The Basics (~7 weeks)
Section 1. Introduction to Macroeconomic Issues
Section 2. The Real Economy in the Short Run
Section 3. The Phillips Curve and the Adjustment Process
Section 4. Productivity and Long-Run Economic Growth
Section 5. Money, Monetary Policy, and Inflation
Part B: Topics Beyond the Basics (~5 weeks)
Section 6. Open-Economy Macroeconomics
Section 7. Government Debt and Deficits
Section 8. Labour Markets and Unemployment
Section 9. Wrap-Up and Review
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IV. Detailed Course Outline
Readings marked “RL” are from the Ragan/Lipsey textbook. Readings marked “MC” are posted on the course’s MyCourses page under the “extra readings” icon. Readings marked “MEL” are Additional
Topics that are found on the textbook’s MyEconLab website. Other readings can be found using the references given.

Part A: The Basics

Section 1.

Introduction to Macroeconomic Issues

(~2 weeks)

Topics Include:
 definitions of key macroeconomic variables
 the circular flow of income (income v. production v. expenditure)
 the measurement of aggregate prices and quantities
Readings:
RL Chapters 19 and
MC Christopher Ragan, “Why Monetary Policy Matters: A Canadian Perspective”, Bank of Canada Review, Winter 2006-07.
MC Christopher Ragan, “The Evolution of Canadian Monetary Policy: Good Ideas Through Natural
Selection”, 2012.
MEL “The U.S. Housing Collapse and the Financial Crisis of 2007-2008”
MEL “A Beginner’s Guide to the Stock Market”
MEL “The Costs of High Inflation”

Part B: Topics Beyond the Basics

Section 6.

Open-Economy Macroeconomics

(~1 week)

Topics Include:
 balance of payments accounting
 market-determined exchange rates
 should we care about current-account deficits?
 is there a “right” value for the exchange rate?
Readings:
RL Chapter 35
MC Interview with Jeffrey Sachs, World Economic Affairs, Winter 1999.
MC Interview with Milton Friedman, World Economic Affairs, Winter 1999.
MEL “Monetary Policy and the Exchange Rate in Canada”

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— McGill University, Economics 295B: Course Outline page 6—

Section 7.

Government Debt and Deficits

(~1 week)

Topics Include:
 the government budget constraint: primary versus actual deficits
 the dynamics of the debt-to-GDP ratio
 the long-term burden of government debt
Readings:
RL Chapter