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Introduction to “Principles of Macroeconomics” April 22, 2011

Posted by geoff in News.
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Our Professor

Welcome to the first-ever IB online course, and the second in a hopefully continuing series of attempts to use blogging to better ourselves (the first attempt being the IB Book Club). Our instructor for the course is Veronica Guerrieri, an Associate Professor in Economics at the University of Chicago who taught this course while visiting MIT in 2009. Given that our alternative could easily have been someone like Paul Krugman, I think we’re off to a good start.

Summary of Lecture 1 below the fold:

The first lecture just runs through interesting stats, which are worth a gander if you’ve got the time. If not, the whole lecture boils down to a couple of charts at the end, where Prof. Guerrieri tells us the sorts of questions we’re going to be addressing during the course. For your convenience, I’ve reproduced them here:

  • How do countries grow over long periods of time? Why do some countries grow faster than others? Why has the U.S. grown so rapidly during the last decade? Why has Japan stagnated during the last two decades? Is the new economy really new?
  • Can rising oil prices increase the inflation rate? If so, how? Why do we care about rising inflation rates? What can the Federal Reserve do to mitigate rising inflation rates? Is there a cost to their policy?
  • More generally, what is the role of the Federal Reserve in the macroeconomy? How do they influence interest rates?? How do interest rates affect unemployment, production, etc.? How is Bernanke’s regime different from Greenspan’s? Should the Fed follow explicit policy rules (i.e., target a 2% inflation rate – always) or should they follow some discretion? What is a liquidity trap?
  • Does the President/Congress have significant impact on the economy in the short run? Can they affect the economy in the long run? Can large budget deficits hinder economic growth in the long run?
  • Should macro economists care about trade deficits? Why could large trade deficits be a good thing for an economy?
  • What are the role of labor markets in the economy? What is a “job less” recovery? Is this a new phenomenon?
  • What has caused the current recession? What has been the role of the housing slump? How the Government and the Fed has reacted? How the recession has affected the US economy and the rest of the world?

My personal question stems from reading Keynesians mocking people who are concerned with deficits and the public debt. I’d like to understand why they believe that deficit spending and wholesale borrowing from other countries is not a problem. Because from what I’ve read of their work, they are basing that judgment on a treatment that neglects a number of essential factors. But I want to be sure that I truly understand their position before I take them to task.

That’s it for Lecture 1. Simple, no? Tomorrow I’ll put up an intro to Lecture 2, and we can get started in earnest. My plan is to put up an intro post to get people started, and then we can have a discussion post about a week later. If that doesn’t work, we’ll try something else.

Side Note: Since this is an MIT course, we could encounter calculus along the way. I’m sure that we can skirt around it, but if anybody wants to wade through it or get a quick course in calculus on the side, I’m happy to break open some side discussions.

Comments»

1. kevl - April 22, 2011

Calculus “on the side?” That’s like telling me there will be intermittent knife fights at the office today. Good God man.

The prof is cute. A cute brainiac. Like me.

2. geoff - April 22, 2011

Good God man.

I sense that you’ll be a skirter.

3. Dave in Texas - April 22, 2011

I’d rather play a round of golf than do Calculus again, and you know how I feel about golf.

4. geoff - April 22, 2011

Calculus is way easier than long division or algebra. Truly. If you’ve ever driven a car, you can grasp its essence in about 15 minutes.

5. wiserbud - April 22, 2011

Woah! That’s the professor?

You keep posting pictures of her and I can find the time to attend her class.

I actually enjoyed calculus. But it was so long ago….

6. OBF - April 22, 2011

Five comments and no blonde jokes? Aliens have taken over the IB web site! It’s time to hide out in the mountains until the little green people head back to the mother ship.

7. kevl - April 22, 2011

Grasping the essence of calculus. Really geoff? The first time I heard “the f of x” my eyes crossed. You’ve not met me, but if you do you’ll see that I’ve not recovered.

8. Mitchell - April 22, 2011

Wait wait wait – we have to READ this stuff? I thought this was a video or audio thing. Sigh.

9. skinbad - April 22, 2011

Yea. What’s up with that? I thought I would be watching Professor Guerrieri sit on her desk and dangle her shapely legs while speaking about inflation with a cute Italian accent. I’m rethinking this whole interest in macroeconomics.

10. wiserbud - April 22, 2011

I thought I would be watching Professor Guerrieri sit on her desk and dangle her shapely legs while speaking about inflation with a cute Italian accent.

We’re NOT??!?

That’s it. I’m done.

Where’s the registrars office? I need to talk to someone about getting my tuition back…..

11. BrewFan - April 22, 2011

Toga party tonight at Delta Phi Moron!!

12. sandy burger - April 22, 2011

Calculus is way easier than long division or algebra. Truly.

Yeah, this is a pet peeve of mine. Pretty much everywhere calculus is taught, they bog it down with all kinds of minutia and derivations, from day one.

The concepts (and some basic techniques) ought to come much earlier, so that by the time the students are seeing derivations and more involved techniques, they already understand what the point is.

One problem is that a math lesson typically consists of a teacher deriving something (like differentiation of polynomials) on the board, and the students are supposed to learn from that. But that’s how mathematicians discover new math; it’s not how humans naturally learn it.

13. Lipstick - April 22, 2011

I barely passed 9th grade algebra and managed to avoid anything math related since then. WIN!

Ironically, I minored in Econ.

14. Michael - April 22, 2011

So, after all this time, we finally learn what Sandy gets excited about.

15. kevl - April 22, 2011

Holy poop. That prof looks a little like Lips.

16. Michael - April 22, 2011

That prof looks a little like Lips.

Except, we can’t see her feet in that pic.

17. daveintexas - April 22, 2011

what a gyp.

*drops failing

18. Lipstick - April 22, 2011

Ha, kevl, you are flattering me — and I love you for it!

19. Lipstick - April 22, 2011

Michael, my feet are majestic!

OK, they’re just big.

Kevl, I’m totally getting up to watch the royal wedding I AM IN TO THIS! If we were neighbors we could hang out and have mimosas while watching.

Shush up haters.

20. Pupster - April 23, 2011

I AM IN TO THIS! If we were neighbors we could hang out and have mimosas while watching.

So, uhm, what would you be wearing?

21. BrewFan - April 23, 2011

I’d think rum and Royal Crown Cola would be more appropriate.

22. kevl - April 23, 2011

Oh I am totally into the wedding also. Can’t wait to see her dress. It better not be strapless. That’s a pet peeve of mine. You don’t wear a strapless gown to be married in Westminster Abbey, for heaven’s sake. I am thinking she’s much too classy for that.

We MUST blog about it ALL next weekend. It’s the wedding of the CENTURY.

Did you notice I am talking with a smart British chirp?

23. kevl - April 23, 2011

And she wears the most darling hats. Can’t wait to see the wonderful hats on the ladies.

Maybe I’ll come out and spend the weekend with you in AZ. I’m tired of cleaning up water from my flooded basement. Between the wedding, English breakfast, and and afternoon tea, we can go shoot guns. Pinky UP, of course!

24. Lipstick - April 23, 2011

Will she wear a tiara? If so, will it be one from the royal collection or will it be made for her?

How long will the train be?

These are important questions!

25. Lipstick - April 23, 2011

I hope she wears a big fat tiara just to shove it in the faces of the snobs who mock the fact that her mother was an “air hostess”.

26. Dave in Texas - April 23, 2011

I ain’t never seen a hat I thought looked good on a woman.

27. kevl - April 23, 2011

I heard that her tiara will be from the royal collection, despite the fact that she’s a commoner. Maybe she’ll wear the one Diana wore?

Dave you might look handsome in a gray morning suit, ascot and tall gray top hat. Polished black Hessians would be the perfect finish. Or maybe a Scottish kilt? How are your legs after a long winter?

28. geoff - April 23, 2011

I ain’t never seen a hat I thought looked good on a woman.

I thought that the hat worked pretty well in The Unbearable Lightness of Being

29. Lipstick - April 23, 2011

Diana wore the Spencer Tiara, so that probably won’t be available to her. Plus, don’t you think it would be too creepy, especially combined with wearing her (cursed?) engagement ring?

David, pipe down — you’ve just never seen Kevl and me wearing elegant hats. We’d rock in this little number:

http://tinyurl.com/3s43ely

30. Lipstick - April 23, 2011

I see what you did there, Geoff…

31. Dave in Texas - April 23, 2011

>> How are your legs after a long winter?

Fabulous.

>> you’ve just never seen Kevl and me wearing elegant hats. We’d rock in this little number:

Stop talking and start sending pics.

Rosalind Russell in His Girl Friday, bad hat choice: http://tinyurl.com/3bbmwgb

Rosalind Russell in His Girl Friday, just when you think it couldn’t get any worse: http://tinyurl.com/3rz8uz2

This despite her being awesomely hot in that movie.

However, I’m willing to concede that a tiara or that thing you linked doesn’t really seem to be a hat to me, and is kinda cute.

32. geoff - April 23, 2011

Lena Olin in ULoB: Outstanding hat choice http://lenaolin.net/being2/unbearcap006.jpg

(barely safe for work)

33. daveintexas - April 23, 2011

Oh.

Well, I stand corrected then.

34. Michael - April 23, 2011

Note from Site Administration:

Due to necessary routine maintenance activities, Innocent Bystanders is scheduled to be closed next weekend. We regret any inconvenience this may cause.

35. lauraw - April 23, 2011

Blog maintenance? About time.

I hear the mens’ room is still condemned from that time Compos paid a visit.

BTW, you should put some KILZ over the bloodstain on the coatroom wall before you paint it. Just sayin’.

…and somebody keeps drilling holes in the ladies’ room doors. Please fill those.

Oh, there’s a couple shattered floor tiles on the back patio from when Lipstick tapped her foot impatiently that time. Looks terrible. You might-could replace those.

…and I made prosciutto out of that midget MONTHS ago, I gave you the head because you asked for it, and it’s still in the freezer. That’s probably not good anymore, especially since you men never use plastic wrap on anything. So, please dump that while you’re doing your Spring cleaning dealio, ok? It freaks me out when I go in there for ice cream.

OK, thanks.

36. Michael - April 23, 2011

Sheesh, I was really just planning to empty the spam bucket and then walk around with a can of Glade.

37. kevl - April 23, 2011

Blog is closed next weekend? Michael is going shopping for hats?

38. Cathy - April 23, 2011

I ain’t never seen a hat I thought looked good on a woman.

I know how to select and wear a hat, Dave. I wear them when I drive with the top down. I think you might approve. Gimme a chance.

39. Lipstick - April 23, 2011

I saw a pic of Cathy wearing a cowboy hat and she looked hawt.

40. daveintexas - April 23, 2011

I already said I was wrong chicks.

You win.

41. geoff - April 23, 2011

That’s probably not good anymore, especially since you men never use plastic wrap on anything.

…because oxygen is the enemy! /Michael Keaton

42. Retired Geezer - April 24, 2011

It freaks me out when I go in there for Chocolate Mint ice cream.

FIFY

43. Joe A - May 8, 2014

I found a blog that actually offers free Micro and Macro economic study materials. For both AP and Regular Econ. There are study guides, formula sheets, free textbooks, notes, graph review sheets, outlines, practice tests. You don’t need to register or any of that BS.

The blog is a blogger site:

http://studyandreview.blogspot.com

.


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