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Macroeconomics
(180.101)
Robert J. Barbera
• Options:
• Contact information:
http://academicsupport.jhu.edu/
Pilot Tutoring Program
David Nessenson & Zach Shelley: Co-head Pilots
(Not to be confused with John Belushi)
Exams and Grading Policy
• First Hour Exam– Oct. 4th 20%
• Microeconomics
➢ The study of individual units
➢ Focus is on an analysis of individual
consumers, individual firms, or individual
markets
Macroeconomists care
about long run growth...
…and short-term boom and bust cycles
Economists’ Key Assumptions
• People make rational economic decisions.
AND
• People respond to economic incentives.
A sleeve of 3 Nike golf balls for $10
A box of 6 Nike golf balls for $25
They buy two sleeves, not one box.
• Optimal decisions are made at the margin.
I prefer a slice of pizza to a can of coke.
But I prefer two slices and coke to three pizza slices.
The marginal—last—pizza slice is less gratifying than the coke.
Microeconomics: Confronting Tradeoffs
• Why? Produce high and rising standards of living and a low cost of living
• Need Analytical Framework to understand Movements in Key
Macroeconomic Variables
• Need a framework to analyze government run, vs. market economies
Mixed Economy Public Policy Challenges
• Monetary Policy:
➢ Raise or lower Interest Rates?
• Government tax and spending policies:
➢ Size of Government, as a share of total economy?
➢ Raise or Cut Federal Taxes and/or Federal Spending?
• Think logically
• Separate signal from noise
• Think outside the box
• Stay humble
• There are only two kinds of economists in the
world. Those who know they don’t know. And
those who don’t know they don’t know.
(J.K. Galbraith)
We never can be sure of what will happen!
But we often can say what cannot happen!