William Rainey Harper College MACROECONOMICS ONLINE! MACROECONOMICS IN THE GLOBAL ECONOMY ~/~ Home ~/~ Syllabus ~/~ Schedule ~/~ Assignments ~/~ Lectures ~/~ BlackBoard ~/~ Textbook Website ~/~

WEEK 1

• Questions ???
• What is the goal of economics? goal.htm
• 5Es Quiz - Fill in the Blanks
• Who skis? Snowboards?

 

Macroeconomics in the news - 1/29/09 http://money.cnn.com/2009/01/29/news/economy/job_cuts/index.htm?postversion=2009012911 http://money.cnn.com/2009/01/28/news/economy/house_vote_wednesday/index.htm http://money.cnn.com/2009/01/29/markets/thebuzz/index.htm?postversion=2009012912

LAST WEEK:

• syllabus
• Blackboard site: Macroeconomics!
• web address for our other internet site: http://www.harpercollege.edu/mhealy/eco212i/home.htm
• The place to begin is the WEEKLY ASSIGNMENTS link on our Blackboard site.
• Online "Required Activity" due each Thursday by 8:00 a.m. linked from the WEEKLY ASSIGNMENTS link on Blackboard
• I am here to help. If you have any questions they can (1) post them on the Blackboard Discussion Board, (2) e-mail me, or (3) call me. My e-mail address and cell phone number are on the syllabus.

WHERE TO BEGIN: BLACKBOARD WEEKLY ASSIGNMENTS

• SURVEY: Hurricane in Florida

  Assume that a hurricane has struck the coast of Florida causing massive destruction. As a result, the prices of many products like hotel rooms, water, plywood, etc. increase significantly. For example, let's say the price of plywood increases from a price of $10 a sheet before the hurricane to $30 a sheet after the hurricane.

  QUESTION: To help the people of Florida should the Florida government pass a law keeping the price of these products (like plywood) to their levels before the hurricane struck (YES or NO)? Why or why not?

  OR What should the government do, if anything?

  RESULTS: 11 NO; 5 YES

• Assignments
  • Textbook reading
  • Some "Worked Problems" found at http://www.mcconnell17.com
  • Some "Web Quiz" questions found at http://www.mcconnell17.com
  • Some Study Guide Problems

   

  • QUESTIONS?????

   

Online Lectures: the 5Es of Economics

• Why "Macroeconomics in the Global Economy"?
• The 5 E's of Economics
  • Economic Growth
  • Productive Efficiency
  • Productive Efficiency
  • Equity
    • http://www.census.gov/ftp/pub/hhes/income/histinc/h02.html or
    • http://www.census.gov/hhes/www/income/histinc/f02AR.html or
    • http://www.harpercollege.edu/mhealy/eco211/lectures/intro/incomedistrib.htm
    • http://www.globalpolicy.org/socecon/inequal/inctab.htm
    • http://www.nationmaster.com/graph/eco_inc_dis_ric_20-economy-income-distribution-richest-20
    • global.gif
    • law of diminishing marginal utility
  • Full Employment

    After having read this lecture you should now understand the following (regardless of what you may read in the popular press): Why it is GOOD for the people of Florida if, after a hurricane strikes, the price of plywood (or other products) increases from $10 a sheet to $30 a sheet [See: http://netra.sptimes.com/Weather/92698/Gouging_complaints__r.html]   Why it was GOOD when the Coca-Cola company(or other companies lays off 6000 workers as they did in the year 2000. [See: http://money.cnn.com/2000/01/26/worldbiz/coke/]   Why the price of gasoline in the United States is TOO LOW (we may have to wait until after we finish chapter 4 to truly understand this.) http://www.eia.doe.gov/emeu/international/gas1.html http://www.wired.com/cars/energy/magazine/15-06/st_atlas http://money.cnn.com/pf/features/lists/global_gasprices/   Why it is GOOD when companies "outsource" (or move) jobs to India and other countries (again, we may not really understand this right away but we should after chapters 5 and 18). {See: http://www.cnn.com/2005/US/03/03/cafta.push/index.html]

• What is MACROECONOMICS?

• Why Study Economics?

• The Use of Theories and Graphs in Economics

• REVIEW

• The Economizing Problem: Making Choices
  • Limited Resources: The Four Factors of Production
    • Resource Quiz
  • Production Possibilities Frontier (Curve)
    • Demonstrating the Necessity of Choice --
    • Opportunity costs
    • Law of Increasing Costs
    • Unemployment
    • Productive Inefficiency
    • Economic Growth
    • Present Choices and Future Possibilities
    • International trade

     

    • REVIEW

     

• Marginal Analysis - How to make choices
  • REVIEW

PREVIEW OF WEEK 2

 I. Introduction to Macroeconomics in the Global Economy

A. Why "the Global Economy"?

1. Who has taken a MICROeconomics course (ECO 211)?

2. no prerequisite for ECO 212

3. need to review of microeconomic principles

4 Therefore, we'll do so, but in an international context

B. The three issues of Macroeconomics

a. Unemployment (UE)
b. Inflation (IN)
c. Economic Growth (EG)

 C. Structural Adjustment and Globalization:

1. What is Structural Adjustment?

2. Structural Adjustment Policies

• Privatization
• Promotion of Competition
• Reduced Role of Government
• Removing Price Controls
• Freer Trade and Convertible Currency
• Foreign Investment
• Other

3. Goals of SAPs / Globalization / Econoimcs

• Maximize society's satisfaction = improve the standard of living
• Macroeconomic Goals:
  • full employment
  • low inflation
  • economic growth

4. Problems with SAPs:

• initial inflation and unemployment
• initial falling output and living standards
• inequality and social costs - some people are worse off

Need to know basic economic principles to understand WHY the world is moving toward Structural Adjustment or Globalization

D. Applications / Examples

1. Video: Korea vs. Sri lanka

While watching the video look for answers to these questions:

a. What are they doing? (POLICIES)

b. Why are they doing it? (BENEFITS)

c. What negative effects might arise? (COSTS)

 

Video: Korea vs. Sri lanka While watching the video look for answers to these questions: 1. What are they doing? (POLICIES) 2. Why are they doing it? (BENEFITS) 3. What negative effects might arise? (COSTS) Available online at: Click on: http://www.learner.org/resources/series86.html Scroll down to: 10. Developing Countries - How these nations have been helped or hurt by the rapid growth since WWII. Case studies: comparing South Korea and Sri Lanka; aid vs. trade in Tanzania. Click on (A free registration is required for first time users) Then slide the timer to minute 7:45 for the eight minute South Korea vs. Sri Lanka case study

2. OPTIONAL: Iraqis Confront Mysteries of Capitalism

by Adam Davidson
Weekend Edition Sunday, February 5, 2006 · Just three years ago, Iraq had one of the most rigidly controlled economies in the world. Today Iraqis are struggling to understand an emerging capitalist system. Listen by clicking the link below.
http://www.npr.org/templates/story/story.php?storyId=5190405

 

3.Some people oppose Structural Adjustment

WTO PROTESTS IN SEATTLE / CANCUN, Mexico

http://cnn.com/ALLPOLITICS/time/1999/11/22/seattle.battle.html
http://www.cnn.com/2003/WORLD/americas/09/11/cancun.wto/index.html

5. But most economists, political leaders and people (?) support SAPs

Why?

To answer this we need to:

• Understand the GOAL of Econoimcs
• Learn the 5 Es of Economics

 

II. Short Introduction to Structural Adjustment Programs

• What is Economics?
  • Mark's Definition
  • Definition
  • Scarcity and Choice
  • GOAL: Maximize Society's Satisfaction
• What is Structural Adjustment?
  • Definition
  • Goal: Maximize Society's Satisfaction
  • Problems

     

• Economic Systems
  • 4 Fundamental Questions
  • A Continuum
  • Criteria
    • who owns
    • who decides
  • Types of Economic Systems
    • Pure Capitalism
    • Command Economy
    • Mixed Systems

   

• Structural Adjustment Policies
  • Privatization
  • Promotion of Competition
  • Reduced Role of Government
  • Removing Price Controls
  • Freer Trade and Convertible Currency
  • Foreign Investment
  • Other

    VIDEO: Poland

    • Available online at: Click on: http://www.learner.org/resources/series86.html Scroll down to: 11. Economies in Transition: Transforming former Communist countries into market economies. Case studies: state industries vs. private entrepreneurs in Russia; the success of Poland’s “shock therapy.” Click on (A free registration is required for first time users) Then slide the timer to minute 27:25 for the eight minute the success of Poland’s “shock therapy case study

   

• Goals of SAPs
  • Maximize society's satisfaction = improve the standard of living = the 5Es
  • Macroeconomic Goals:
    • full employment
    • low inflation
    • economic growth

   

• Problems with SAPs:
  • initial inflation and unemployment
  • initial falling output and living standards
  • inequality and social costs - some people are worse off

 

 Week 1 Lecture Outline