|HON 220 - Introduction to Economic Theory and Policy
Professor Elliott Parker
Office: Ansari Business Bldg., Room 319-F
|MWF 11:00 - 11:50 AM
Ansari Business Building, Room 202
Office Hours: MW 2:30-3:30 PM
or email me for an appointment
Books | Grading | Schedule | Links
Short Syllabus for Printing
Plosser's Economic Outlook
This is an introductory course in both microeconomics and macroeconomics, intended for students already accepted in the university honors program. Successful completion of HON 220 will meet the business college requirement of both EC101 and EC102. Both theory and policy applications will be emphasized.
Economics is the study of how individuals in society choose to allocate scarce resources to produce and distribute goods. It is an analytical social science that studies many of the problems facing our society, and it is the foundation of most theories of business finance, management, and marketing. Though it often concerns itself with goods bought and sold in markets, it applies to a variety of arenas in which people make choices among competing alternatives. Many economists use mathematical models to explain and predict economic behavior and econometric analysis to test these models against observed data from the real world, while other economists focus on the institutions that make our economy work, the history of how we got here, and the political process of choosing economic policies.
As a field bridging the gap between the traditional liberal arts, quantitative methods, and business studies, the study of economics helps develop critical thinking and analytic skills. As a field trying to explain and predict behavior in a wide range of social phenomena, economics is a powerful tool that helps you understand the world better. Economics is the foundation of all business studies, and economics is excellent preparation for graduate studies and professional studies in law, public administration and other disciplines. In fact, students majoring in economics are among the best performers on the LSAT exam.
While there are many fields within economics, there are two fundamental categories you will study. Microeconomics is the study of smaller units of the economy, such as firms and households, and is often is concerned with with issues such as competition, markets, prices, incomes, and efficiency. Macroeconomics is the study of the aggregate economy, and focuses on recessions and expansions in the national economy, unemployment, inflation, money creation and the role of banks, interest rates, aggregate investment, and growth. Macroeconomics further attempts to predict the economic effects of government policies, particularly fiscal and monetary policies intended to affect the national economy.
Discussion of examples and policies will focus on the U.S. economy. No previous economic study is required, but a reasonable degree of comfort with algebra and geometry will be extremely helpful. Class discussion is encouraged.
There are different approaches to teaching. Some like to spoon-feed their students bite-sized portions which are easily digestible. I believe in setting goals that you can only reach on tiptoe, and I think this is especially appropriate for honors students. I do this because I believe that you will learn more if you are pushed, and because I believe that you should be aware of how much there is to learn. I fully believe that, if you pay attention, what you learn in this class will help you make more sense of business, politics, and world affairs in the future. (See the Velco Theory of Learning.)
textbook is Microeconomics, 3rd Edition, ISBN: 0-393-97518-5, by
E. Stiglitz and Carl E. Walsh. Professor Stiglitz was the recipient
of the 2001 Nobel Prize in Economics for his contributions to the new economic
theory of information; he is currently a professor of economics at Columbia
University, but prior to that he was chief economist at the World
Bank, the chairman of the President's Council of Economic Advisors,
and a professor at Stanford University. This text is available at
the ASUN Bookstore, or you may shop for it online (I recommend starting
at Bigwords.com for a good price comparison).
It is priced as cheap as $67.20 new, but there is the time and cost of
shipping to consider.
W.W. Norton, Inc., has a great website for the Stiglitz text. You might also consider the Study Guide by Lawrence Martin (ISBN 0-393-97782-X).
You are also expected to get a book of supplementary readings, The Economics of Public Issues, 12th Edition, ISBN 0-321-07915-9, by Roger LeRoy Miller, Daniel K. Benjamin, and Douglass C. North (also a recipient of the Nobel Prize in Economics).
Students are expected to regularly read a business publication such as the Wall Street Journal, Business Week, the Economist, Barrons, or Forbes to familiarize themselves with the business and policy relevance of microeconomics. Online versions are available for the New York Times, the Economist, the Financial Times, and Business Week, among others.
Grading will depend on:
Grading will be done according to a four point scale (4=A, 3=B, 2=C, 1=D, and 0=F). At the end of the semester, your average will be converted back into a letter grade, based on the following ranges:
|3.8 - 4.0||A|
|3.5 - 3.8||A-|
|3.2 - 3.5||B+|
|2.8 - 3.2||B|
|2.5 - 2.8||B-|
|2.2 - 2.5||C+|
|1.8 - 2.2||C|
|1.5 - 1.8||C-|
|1.2 - 1.5||D+|
|0.8 - 1.2||D|
|0.0 - 0.8||F|
Readings will generally follow the order of the Stiglitz & Walsh textbook. Below you will find the approximate order and amount of time we will spend on each topic, along with assigned readings from the textbook.
I. INTRODUCTION -- one and a half weeksRead Stiglitz & Walsh, chapters 1-3II. MICROECONOMICSA. Perfect Markets - three weeksRead Stiglitz & Walsh, chapters 4-10B. Microeconomic Problems and Policy -- three weeksFirst Section Exam on material in I and II.A.Read Stiglitz & Walsh, chapters 11-16
C. Selected Topics -- one weekIII. MACROECONOMICSRead Stiglitz & Walsh, chapters 17-21Second Section Exam on material in II.B and II.C.A. The Full-Employment Model -- three weeksRead Stiglitz & Walsh, chapters 22-27B. Macroeconomic Instability and Policy -- three weeksThird Section Exam on material in Section III.ARead Stiglitz & Walsh, chapters 28-33C. Selected Topics -- 1 weekFourth Section Exam on material in Section III.BRead Stiglitz & Walsh, chapters 34-37
Here are my EC 101 Lecture Notes: Introduction to International Economics.Final Exam will be on all material, including special topics and cases in Miller, Benjamin, & North.Sample past exams are included below for past EC102 (microeconomics) and EC101 (macroeconomics) courses:
EC 102 (Micro)Midterm Exam 1 (introduction): Sample 1 and Sample 2.EC 101 (Macro)
Midterm Exam 2 (perfect markets): Sample 1 and Sample 2.
Final Exam (imperfect markets): Sample 1 and Sample 2.Sample first exam (introduction)
Sample second exam (macro part 1)
Sample third midterm exam (macro part 2)
Sample Comprehensive final exam
For an easy introduction, check out What is a Market Economy, by Michael Watts, in cooperation with the Joint Council on Economic Education.
Check out the websites of the:
Smartstocks.com has a free Stock Market Simulation Game you might want to try. According to their announcement:
The New York Federal Reserve Bank has a good set of explanations (fedpoints) on the Fed and the intricacies of money and monetary policy. The San Francisco Fed has a series of Quicktime clips on monetary policy suitable for high school students, as well as a list of online educational publications you might find interesting.