First class, and Chapter 1

Link to syllabus

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Textbook, study guide, tutorsMath pre-requisite. Good to read newspaperDifferent interests of students, by majors. People who’ve had 202. Freshmen.Bring pencil and calculator to exams – no scantrons.Note: Econ 201 is Macro at UMD. Different at UM-AA

M.T.’s homepage for syllabus, old exams, and lecture notes in .pptx or .docx format. Also on C-Tools and CANVAS.

Course ArrangementsRoll – class listOffice HoursGrade: Exams, curve, extra creditSyllabusE-mail list server

1. Moves quickly, hitting main points of text, frequent efforts at relating to current events

4. After each exam, students will be asked if the exam was fair, and if it repaid studying. Graded exams returned the next class day (hopefully).

5. Some effort to use the web; syllabus, extra credit, and previous exams on my webpage, and listserver for the class.

3. Anything in the text is fair game on exams. Virtually nothing from outside the text on exams. Not much math, but lots of graphs.

2. Will use PowerPoint presentations. Advisable to bring textbook to class; try to skim it beforehand. Bring a tape recorder if you like. TURN OFF CELLULARS!!

Characteristics of this course:

6. Some parts of text omitted from this course.

Definitions of Economics

Study of production, distribution, and consumption of goods and services

Efficient use of limited resources to achieve maximum satisfaction of human wants.

Differences between macro and micro

Positive (value free) vs. Normative (reflects values of the speaker) [p 37-8]

Overview of Macro:

Overview of Macro: study of factors determining unemployment and inflation

Producers—respond to wages, price of oil, technology, capital stock, regulations, taxes.Purchasers (consumers)—respond to business investment, government spending and taxes, foreign trade, and monetary policy.

[or, buyers and sellers]

Unemployment Rate, US

Source: US Dept. of Labor http://data.bls.gov/timeseries/LNS14000000

Inflation in the U.S.

Source: Bureau of Labor Statistics:http://data.bls.gov/pdq/SurveyOutputServlet?request_action=wh&graph_name=CU_cpibrief

Main Macroeconomic issues for this course:

Government intervention:Left/right; liberal/conservative; interventionist/free market (laissez faire) Democrat/Republican

Government Deficit (and the National Debt)

Depression of the 1930s. Current Crisis (2009)

Globalization: tariffs or free trade, migration, exchange rates

Supply Side Economics—lower taxes, reduce government regulation

Monetary issues, relating to the Federal Reserve Banks, and finance

Very little on the stock markets.

Adam Smith: (1723-1790) Prominent Scottish Philosopher. The Wealth of Nations 1776

In a free market society,individuals, acting out of their ownself interest, will be guided, as if byan invisible hand, to make sociallybeneficial economic decisions.Discussed on page 2.

Also: benefits of free trade, criticism ofmercantilism. Discussed in chapter 2

1798 Essay on the Principle of PopulationOverpopulation; economics as “the dismal science”

Incidentally, Malthus’s ideas had a big impact on Charles Darwin.

David Malthus, 1766-1834

John Stuart Mill, 1806-1873

Perhaps better known as a philosopher,he made important contributions toeconomics, as well, among which arethe theory of Infant Industry Tariffs,which we do in chapter 5.His father was the head of the East India Co., and he was given an elite, rather isolated childhood education.

He was an early promoter of rights forwomen, which many attribute tothe influence of his wife.

Communist Manifesto, Worked with Engels onDas Kapital

Karl Marx, 1818-1883

Criticized capitalism.

Class exploitationRevolution, led by the workers

Keynes

John Maynard Keynes(1883-1946).

General Theory (1936)

Argued that unemploymentduring 1930s Depressioncould be cured by gov’t.spending and deficits

Milton Friedman, 1912-2006

Link to Friedman’s bio http://www.hoover.org/bios/friedman

Most prominent advocate ofa return to free market/non-governmental policies.

Influence concretized underPresident Reagan.

Also: leading ‘monetarist’ anda Nobel Prize winner.

Extra Reading:

Many economists first got interested in this fieldby reading

The Worldly Philosophers,

by Robert Heilbroner.

US Inflation