14.02: PRINCIPLES OF MACROECONOMICS
Fall 2005

DESCRIPTION:

This course will provide an overview of macroeconomic issues: the determination of output, employment, unemployment, interest rates, and inflation. Monetary and fiscal policies are discussed, as are public debt and international economic issues. It introduces basic models of macroeconomics and illustrates principles with the experience of the United States and other economies.

FACULTY:

Lecturer: Professor Francesco Giavazzi mailto: giavazzi@mit.edu

HEAD TEACHING ASSISTANT:

Miriam Bruhn mailto:mbruhn@mit.edu

TEACHING ASSISTANTS:

Mauro Alessandro mailto:malessan@mit.edu

Filippo Balestrieri mailto:filippo@mit.edu

Francesco Gallego mailto:fgallego@mit.edu

Ha Yan Lee mailto:hlee@mit.edu

Heiwai Tang mailto:heiwai@mit.edu

TWO ALTERNATIVE FORMATS: The course has two alternative formats. Both formats will cover the same topics, use the same textbook, and have the same required assignments, including quizzes and problem sets. As we receive more information on class enrollment, there may be changes in the number of sections and recitations.

1. Lecture-Recitation: You attend one-hour lectures on Mondays and Wednesdays, given by Professor Giavazzi, at 1 PM, in E25-111. You also attend a one-hour recitation on Fridays. During Friday recitations – which are not optional – instructors will go over weekly problem sets and review materials from the lectures. If you elect the Lecture-Recitation option, you may choose one of the following one-hour Friday recitations:

Date and Time	Room	Teaching Assistant
Fri 11 am	(1-135)	Ha Yan Lee
Fri 12 pm	(5-234)	Ha Yan Lee
Fri 1 pm	(5-234)	Ha Yan Lee
Fri 2 pm	(5-234)	Ha Yan Lee
Fri 3 pm	(5-234)	Ha Yan Lee

2. All-Section: You attend one-hour sections on Mondays, Wednesdays, and Fridays, run by a TA. If you elect this option, you may choose one of the following sections:

Date and Time	Room	Teaching Assistant
Mon-Wed-Fri 9 am	(5-134)	Heiwai Tang
Mon-Wed-Fri 10 am	(5-217)	Heiwai Tang
Mon-Wed-Fri 10 am	(5-134)	Francisco Gallego
Mon-Wed-Fri 11 am	(5-134)	Francisco Gallego
Mon-Wed-Fri 2 pm	(5-217)	Mauro Alessandro
Mon-Wed-Fri 3 pm	(5-217)	Mauro Alessandro

As we receive more information on class enrollment, we may need to make changes in recitations or sections. (If any one section is too large, we may ask students to move to different times.)

CHOOSING AN OPTION: During the first two weeks of the semester, you may switch from Lecture to All-Section format, and from one recitation or section to another. It should be stressed that changing sections DOES NOT REQUIRE any paperwork with the Registrar or the Department of Economics.

OFFICE HOURS:

Office Hours
Lecturer / Teaching Assistant	Room	Time
Mauro Alessandro	E52-204	Mondays 11 am – 12 pm
Filippo Balestrieri	E52-204	Wednesdays 5:30 pm – 6:30 pm
Miriam Bruhn	E52-243d	Tuesdays 5 pm – 6 pm
Francesco Gallego	E52-300	Tuesdays 11 am – 12 pm
Ha Yan Lee	5-234	Fridays 4 pm – 5 pm
Heiwai Tang	E51-090	Thursdays 4:30 pm – 6 pm

Office hours are open to students from all sections or recitations.

READINGS:

The text for the course is the fourth edition of Macroeconomics, by Olivier Blanchard. Please, get the last edition. It will be at the Coop, and two copies will be on reserve at Dewey Library.

In addition to the textbook, you should read the Economist, the weekly magazine, at least a couple of times a month. It provides a good coverage of current economic events, and will help you relate what you learn in the course to the real world.

REQUIREMENTS (PROBLEM SETS AND QUIZZES): The course grades will be based on three quizzes, and 6 problem sets. The grade will be primarily determined by the average of the three quiz scores (weights to be determined). You will hand in the problem sets to your TA in class or to the recitation-only TA if you choose to take Professor Giavazzi’s lecture. The problem sets can count in the final grade for border line cases. A necessary condition for the problem sets to help you in these border line cases is that all 6 problem sets have been handed in. For students who are on the border between two grades, performance on the problem sets can result in the higher grade, while failing to hand in problem sets can result in the lower grade. Problem sets are due on the due date. We will not accept late problem sets.

We will use our 14.02 webpage to distribute problem sets and solutions, past exams, and other announcements. We will also use the 14.02-students public mailing list to distribute important announcements and room changes. The tentative schedule for problem sets and quizzes is the following:

Problem Set #	Assigned	Due
1	09/12	09/21
2	09/21	09/28
3	10/12	10/19
4	10/26	11/02
5	11/16	11/23
6	11/23	11/30

Solutions to problem sets will be posted to the web on the Wednesday on which they are due.

Note that problem sets are due on Wednesdays the week after they are assigned. Each quiz will cover the material in the lectures since the previous quiz. Each quiz will last 1½ hours. However, you should be ready to stay at the quiz location until 9:30, should unforeseen circumstances force us to start late.

Quiz #1: October 6, 7:30-9:00 PM, 50-340 (Walker Memorial) for lecture students and Mauro’s students, 4-370 for Francisco’s students, 4-270 for Heiwai’s students.

Quiz #2: November 8, 7:30-9:00 PM, 50-340 (Walker Memorial) for lecture students and Mauro’s students, 4-370 for Francisco’s students, 4-270 for Heiwai’s students.

Quiz #3, December 8, 7:30-9:00 PM, 50-340 (Walker Memorial) for lecture students and Mauro’s students, 4-370 for Francisco’s students, 4-270 for Heiwai’s students.

While the quiz dates are firm, problem set dates are subject to change.

COURSE POLICY:

Collaboration on problem sets is permitted, but please do write up your answers separately. On the other hand, collaboration during quizzes and the final exam is strictly prohibited, and is considered a breach of academic honesty. We will follow the procedures in the latest MIT Guidelines on Academic Honesty, which are given in detail in MIT's Policies and Procedures.

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Updated December 7, 2005