• Fully explain the basic concepts, models, theories and tools used in this macroeconomics course and use them to analyze economic decisions by individuals and by firms
• Explain how and what we measure economics aggregates. Explain why economics focuses on economic growth and develop models that help us to understand what factors aid in economics growth. Explain why we care about growth and how knowledge of personal finance and stock markets can lead to growth in aggregate and individual wealth
• Predict the typical general effects of the business cycle on inflation and unemployment. Display clear knowledge of the correct countercyclical monetary and fiscal policies in an economic contraction and an economic expansion
• Articulate and explain the origins, workings, and potential problems in monetary systems
• Analyze economic outcomes in terms of their effects on aggregate income and income distribution
• Be able to outline the major themes of international trade and international finance in an economic analytical framework

The Principles of Macroeconomics is the introductory, foundational course that gives students a comprehensive overview of macroeconomic theory. It provides the framework for subsequent intermediate macroeconomic theory courses and serves as any student's introduction to the analysis of economies at the national or state level.

Macroeconomics is the study of the behavior of an entire economy aggregated across all of the individual decision-making units. It deals primarily with those factors affecting production, employment, and price levels. Topics which we will cover include: economic growth, business cycles, the national debt, interest rates, government spending, the measurement of economic aggregates, monetary policy, and fiscal policy. We will also introduce international economics and policies along with international finance.  

There is relatively-wide agreement on the goals of macroeconomic policy: growth in real output, full employment, and price stability. However, macroeconomic theory is marked by diverse perspectives concerning the appropriate policy actions required to achieve these goals. A number of alternative schools of thought exist including Keynesianism, Monetarism, and Rational Expectations. Each stresses different paths and perspectives on the proper path(s) to achieving the goals of macroeconomic policy outlined above.

Students are encouraged to follow the economic and financial news over the period of the course. The course will provide the background necessary for formulating informed opinions on the workings of a macro-economy. 

The primary focus of this course is on the development of analytical prowess or "critical thinking." The discipline of economics originated within philosophy, rhetoric, logic and mathematics and transitioned through political economy in the 19th century into modern economics.  As a result, economics is a very broad social science drawing upon the interconnectedness of human action. We model human behaviors within particular institutional arrangements. 

This course focuses on the macroeconomy including government policies designed to influence, direct, and coordinate economic behavior. The two major categories of policies covered are fiscal policy and monetary policy. We will address how we recognize the business cycle and show why we may want to use fiscal and monetary policy to affect that cycle.  Economists refer to this as "counter-cyclical policy". We will also develop an understanding of what money is, how it works, and the monetary system used by many national or supra-national governments.  

Preliminary Assignment: 
(1) Read the first two chapters of the textbook and prepare any questions that you may have for our first class meeting. 

(2) Carefully read this article: Radford, R.A. 1945. “The Economic Organisation of a P.O.W. Camp.” Economica, 12(48): 189-201.  Prepare answers to the questions supplied below and we will take time in class to discuss them.   

These are questions for our class discussion of this article: Radford, R.A. 1945. “The Economic Organisation of a P.O.W. Camp.” Economica, 12(48): 189-201.

1. What, according to Radford, is the most significant aspect of the article?  
2. What, according to Radford, accounts for the development of an exchange system in the P.O.W. camp?
3. Can the development of the system be explained by the equality or lack of equality in the distribution of supplies?  
4. What articles were exchanged?  
5. Why were they exchanged? What purpose did it serve? 
6. What happened to the initial ”goodwill” gift-exchange system? 
7. Undoubtedly, the first exchanges were man-on-man barter exchanges.  But Radford refers to changes in the barter system.  What happened to it?  
8. Why did the Exchange and Mart notice board represent an important advance?  
9. Did the conditions of the camp affect the “unity of the market"? How so?
10. Explain what happened with labor markets within the camp.
11. Explain the role of a middleman in the camp. What was the perception of middlemen by others within in the camp?
12. What is a spot market? What is a futures market? Did these markets function inside the P.O.W. camp?
13. Cigarettes performed all the functions of money: a unit of account, a store of value, and the medium of exchange.  Radford makes a statement that “Cigarettes were also subject to the working of Gresham's law.”  What did he mean by this?  
14. Was the monetary system stable?  Why or why not?  
15. At one point the parcels of cigarettes and other supplies were cut in half.  What affect did this have on the market and the monetary system?  
16. Late in the war, around D-Day, a restaurant and entertainment venue was opened. This venue even issued its own money called the “Bully Mark” (BMk) which was 100% backed by food.  For a time, one BMk was worth one cigarette, but this set exchange rate soon fell apart. Why?  
17. Price fixing also occurred in the POW camp. How and why?  
18. What happened to the price floors and ceilings instituted by the leaders within the camp?  
19. What feelings did the prisoners express about prices?
20. Which force does Radford think was most important in accounting for the evolution of the exchange system?  
21. Does Radford believe that prisoners might have developed an exchange system because they were used to living in an exchange economy?  List three reasons for the exchange system you believe were important.  What weights would you assign to the various forces Radford notes as having contributed to the development of the exchange system?

Midterm Feedback Activity:
The Midterm Feedback Activity (MFA) offered will be a take-home examination covering only the course materials up to that point.  It will be of similar format to the final examination. Its format will be multiple choice and short answer. It will be posted on LEARN a week prior to its due date - the beginning of Class Meeting 5. This MFA is best viewed as learning opportunity for students. I encourage you - and you have my explicit permission - to work with a classmate or small team. of classmates. Ideally, you will learn from one another. The MFA questions will be drawn from the test bank which is a supplement to your textbook. 

Class 1 Introduction
1. The Big Ideas in Economics
2. The Power of Trade and Comparative Advantage

Class 2  Supply and Demand, Price Controls
3. Supply and Demand
4. Equilibrium: How Supply and Demand Determine Prices 
5. Price Ceilings and Price Floors

Class 3 Economic Growth, National Income Accounting
6. GDP and The Measurement of Progress
7. The Wealth of Nations and Economic Growth
Appendix: The Magic of Compound Growth: Using a Spreadsheet

Class 4 Economic Growth and Productivity
8. Growth, Capital Accumulation and the Economics of Ideas: Catching Up vs. The Cutting Edge
Appendix: Excellent Growth
9. Savings, Investment, and the Financial System
Appendix: Bond Pricing and Arbitrage

Class 5 Personal Finance, Political Economy and Public Choice
10. Stock Markets and Personal Finance
21. Political Economy and Public Choice

Class 6 Business Fluctuations, Employment, Money, and Inflation
11. Unemployment and Labor Force Participation
12. Inflation and the Quantity Theory of Money

Class 7 Business Fluctuations, Aggregate Demand and Aggregate Supply, Transmission of Policy
13. Business Fluctuations: Aggregate Demand and Supply 
14. Transmission and Amplification Mechanisms

Class 8 Macroeconomic Policy and Institutions - Monetary Policy and the Fed
15. The Federal Reserve System and Open Market Operations
Appendix: The Money Multiplier Process in Detail
16. Monetary Policy

Class 9 Macroeconomic Policy and Institutions - Fiscal Policy and Congress
17. The Federal Budget: Taxes and Spending
18. Fiscal Policy

Class 10 International Economics - Trade, Finance, and Exchange Rates
19. International Trade 
20. International Finance

Class 11 Comprehensive Review

Preliminary Assignment: To help students get maximum value from ISUP courses, instructors provide a reading or a small number of readings or video clips to be read or viewed before the start of classes with a related task scheduled for class 1 in order to 'jump-start' the learning process.

Course timetable is available on https://www.cbs.dk/uddannelse/international-summer-university-programme-isup/courses-and-exams.

We reserve the right to cancel the course if we do not get enough applications. This will be communicated on https://www.cbs.dk/uddannelse/international-summer-university-programme-isup/courses-and-exams end February 2018 at the latest.

Mandatory readings:

The article for the Preliminary Assignment is available through JSTOR from the CBS Library.   Radford, R.A. 1945. “The Economic Organisation of a P.O.W. Camp.” Economica, 12(48): 189-201. 

Textbook for the course: 
Tyler Cowen and Alex Tabarrok
Modern Principles of Macroeconomics
ISBN-13: 978-1429278409
ISBN-10: 1429278404
Macmillan Publishing, 3rd Edition