Econ 302 Course Outline and Resources

Course Outline

Section I: Economic Growth and GDP

• Introduction of the Fed Challenge
• GDP and Potential GDP
  • Real vs Nominal GDP
    • BEA: GDP News Release
    • What Are the "Ingredients" for Economic Growth?
    • GDP: Does It Measure Up?
  • Components of GDP
    • Consumption Behavior
      • The role of interest rates: Two-period Consumption Model
      • Keynesian view: MPC and autonomous consumption
    • Investment Behavior
      • Capital creation
      • Loanable Funds Market
        • Wait, Is Saving Good or Bad? The Paradox of Thrift
    • IS Curve and Aggregate Demand
  • Potential GDP
    • Production Function and the Solow Growth Model
      • Connect the steady state in the Solow Growth model with Investment
      • The Output Gap: A "Potentially" Unreliable Measure of Economic Health?
      • Measuring Labor Productivity: Technology and the Labor Supply ...
    • Classical Long-run Supply Curve
      • The Productivity Puzzle
      • Why Are Some Countries Rich and Others Poor?
  • Keynesian Short-run supply Curve
  • Business Cycle Basics
    • Employment and Capacity Utilization Over the Business Cycle
• Introduction to Classical vs Keynesian Approaches
  • Does demand follow supply or the other way around?

Section II: Financial Markets and Interest Rates

• Financial Markets
  • Where do interest rates come from?
  • Real vs nominal interest rates
  • Behavior of interest rates
    • Differences in maturity and the yield curve
      • Treasury: Daily Yield Curve
      • NPR: Explaining the Yield Curve
    • Difference in default risk
    • What the Libor-OIS Spread Says
    • Why Are U.S. Bond Yields So High?
    • Financial Conditions Indexes
    • A Perspective On Nominal Interest Rates | St. Louis Fed
• Monetary Policy Basics
  • What is money?
    • Roles of money
      • IMF: What is Money?
    • Measures of the money supply
      • NY Fed: The Money Supply
      • SF Fed: Education | How much currency is circulating in the economy, and how ...
      • The Quantity Theory of Money
      • The curious case of low U.S. money velocity
    • Tools of Monetary Policy
      • Monetary Policy Basics - Federal Reserve Education
      • EconLib: Money Supply
      • StL Fed: How Monetary Policy Works
      • What is neutral monetary policy?
      • A Neutral Federal Funds Rate?
  • Structure and Objectives of the Federal Reserve
    • US’s Dual Mandate
    • Inflation targeting
      • IMF: Inflation Targeting: Holding the Line
      • San Fran Fed: What are the costs and benefits of inflation targeting? Should the Fed adopt an inflation targeting monetary policy regime?
  • Expected impact of changes in interest rates on the macroeconomy
    • IS-MP model
  • Basic Monetary Policy Rules
    • Taylor (1993)
    • Monetary Policy and the Output Gap
  • Long-run Money Neutrality

Section III: Inflation and Unemployment

• Inflation
  • How is unemployment measured
    • Consumer Price Index Summary - Bureau of Labor Statistics
    • FRED in the Classroom: Measures of Inflation
  • Different measures of inflation
  • Assignment: Evaluate the current trends in inflation
    • What's in Your Market Basket? Why Your Inflation Rate Might Differ from the Average
    • Making Sense of the Ups and Downs of Prices
    • Money and Inflation: A Functional Relationship
    • Deflation: Who Let the Air Out?
    • PCE and CPI Inflation: What’s the Difference?
    • What is inflation and how does the Federal Reserve evaluate changes in the rate of inflation?
    • Methods for Evaluating Recent Trend Inflation
• Unemployment
  • How is unemployment measured
    • BLS: Employment Situation Summary
      • Charting the labor market: Data from the Current Population Survey
    • How the Government Measures Unemployment
    • FRED in the Classroom: Employment and the Labor Force
  • Different measures of unemployment
    • BLS: Current Population Survey
    • Alternative Measures of Labor Underutilization
  • Labor Force Participation Rates
  • The natural rate of unemployment and NAIRU
  • Assignment: Evaluate the current labor market conditions
    • Will Robots Take Our Jobs?
    • Vox: The big debate about the future of work
      • Why I’m skeptical that robots will take all our jobs
    • Humans need not apply
    • The natural rate of unemployment
    • How low can unemployment go?
• Phillips Curve Relationship
  • The Phillips Curve
  • Bank of America: “The Phillips curve is dead”
  • The Phillips curve may be broken for good
  • Why Inflation Stays Low Even Though Unemployment Is Down
  • Is the Phillips Curve Dead? And Other Questions for the Fed - WSJ
  • The Phillips Curve Is Dead (except in Federal Reserve and CBO models)
  • Has the Phillips Curve Relationship Broken Down?
  • Assignment: Is the Phillips Curve still relevant?
• Can we predict the next recession?
  • Recession Signals: The Yield Curve vs. Unemployment Rate Troughs …
  • Bond yields reliably predict recessions. Why? - Free exchange
  • Did The Fed Break The 'Yield Curve Indicator?' - Forbes

Section IV: Monetary Policy in Practice and it Challenges

• Monetary Policy in Practice
  • Challenges to Monetary Policy
    • Excess Reserves
  • The zero lower bound
  • New Tools of Monetary Policy
    • Negative interest rates
      • Looking for the Positives In Negative Interest Rates
      • BBC: Why use negative interest rates?
    • Quantitative Easing in the US and around the world
      • Quantitative Easing Explained
      • Quantitative Easing and Money Growth - Potenital for Higher Inflation
    • Interest Rates on Reserves
  • Changes in Fed Communication Strategies
    • Innovations in FOMC Communications
    • Assignment: Evaluate the most recent FOMC statement
  • Simple Monetary Policy Rules
  • Is Nominal GDP Targeting a Rule Policymakers
• Fiscal Policy
  • Debt and Deficits
    • Should we worry about trade imbalances
    • On the Supply of, and Demand for, U.S. Treasury Debt | St. Louis Fed
  • Effectiveness of Fiscal Policy Stimulus
    • Much Ado about Multipliers
    • Sovereign Doubts
    • Fiscal and Monetary Policy in Times of Crisis
• Other resources:
  • Falling Oil Prices Create Winners and Losers
  • Economist Topics: Unemployment
  • Boston Fed: Current Policy Perspectives

StL Fed: Making Sense of the Federal Reserve -- In Plain English