Economics 341

Monetary and Fiscal Policy
Fall 2016
Jeffrey Parker

Course Information

Course Content
Class Format
Prerequisites
Office Hours
Exams and Other Assignments
Grading
Texts and Readings

Course Content

This course presents a broad examination of the economic literature on monetary, budget, and financial regulatory policies that governments can use to pursue macroeconomic goals such as steady growth, high employment, low inflation, and a stable financial system. The fields of monetary theory, macroeconomics, public finance, and political economy/public choice all contribute significantly to its content. Attention is given to theoretical models, empirical tests, and relevant institutional details of the U.S. and world economies. Among the specific issues discussed are alternative structures of monetary systems; banking, central banks, and regulation of the financial system; the effects of monetary and fiscal policy on output, employment, and inflation; inflation and disinflation; the macroeconomic implications of government budget deficits; and modern theories; evidence on the effects of fiscal policy; and theories of how political and economic considerations affect the formation of economic policies.

Back to top

Class Format

Much of the course is structured as a student-participation conference. The instructor will lecture when the material demands it. Students are expected to participate actively in class. The class will meet from 1:10 to 2:00 each Monday, Wednesday, and Friday throughout the semester, with a few minor exceptions. The instructor will need to miss the class scheduled for November 8. We will make up the missed class by extending class sessions on two other class days to 1:10-2:30, which should not pose conflicts because it remains within the same class block. The extended classes will be announced well in advance.

Back to top

Prerequisites

The formal prerequisite for this course is Economics 201: Introduction to Economic Analysis. Those who have taken Economics 304 or 314 (macroeconomics) or Econ 342 (international macro) will find that preparation useful, though it is not essential. Students will be expected to have some basic understanding of macroeconomic principles; supplementary readings will be available for those whose preparation may be inadequate. There is no mathematics prerequisite. Most of the analysis will be performed graphically though fundamental methods of calculus, statistics, and econometrics will appear from time to time, especially in the readings. A few readings are quite mathematical in nature, but students should be able to "read between the equations" to get a basic understanding of these models.

Back to top

Office Hours

The instructor will hold office hours in Vollum 229 on Mondays from 2:00 to 3:30pm and Tuesdays from 10:00 to 11:30am.

Students for whom these hours are inconvenient may make appointments at other times by contacting the instructor at extension 7308 or by email to parker@reed.edu.

Back to top

Exams and Other Assignments

Reading and Conference Participation. Students are responsible for the required reading on the reading list. In order to achieve a successful conference, reading must be done in a timely manner. While some classes may be more lecture-oriented, most will include periods of class discussion. All students should participate in the class discussion every day. If oral participation is not natural for you, it might help to think of a few questions or comments ahead of time as you do the reading. Then inject them at the appropriate moment in class.

Exams. There will be a mid-term exam roughly halfway through the course (planned for October 10) and a final exam at the end. Part or all of these exams may be take-home.

Policy Project. We will undertake an extended project involving an important current issue in macroeconomic policy. Past projects have focused on U.S. monetary policy and on the Greek/Euro crisis. 

Writing Assignments. In addition to the policy project, there will be several (3 or so) written assignments during the semester. These will be a mix of problem sets, policy essays, and perhaps summaries of papers.

Back to top

Grading

Grades will be based on all information the instructor has about your level of understanding of monetary and fiscal policy. This includes evidence from exams, assignments, projects, class participation, and individual discussions.

Back to top

Texts and Readings

Most of the readings for this class will be journal articles and chapters from books. All readings will be on reserve in the Reed Library or linked electronically from the online reading list on this Web site. The literature on monetary and fiscal policy is highly dynamic, with new papers being published (or discovered by the instructor) every week. It is quite likely that additional readings will be added or substituted on the reading list as the semester progresses. You are strongly advised to use the Web-based reading list on an ongoing basis rather than printing out the current version.

Back to top