UCLA

MACROECONOMIC THEORY
Economics 102
Spring 2014
Instructor: Prof. Meric Keskinel
E-mail: mkeskinel@ucla.edu
Office: Bunche 2255
Office Hours: TR 12:30pm 1:30pm
TAs:
Cantu, Carlos
Kospentaris, Ioannis
Nicolo, Gioavanni
Song, Yangbo
Weiss, Colin
Course Pre-Requisite: Econ 101
Course Description:
This course analyzes economic aggregates, or the macro economy. It develops an aggregate
demand-aggregate supply model to explain the determination of the economys aggregate output
of goods and services, the price level and the level of employment. The model is then expanded
and applied to such persistent macroeconomic issues as fiscal and monetary policy, inflation and
unemployment. A simple economic growth model is developed to analyze the determinants of
economic growth and the relationship between economic growth and economic welfare. Sources
of instability and the role of stabilization policies in closed and open economies are analyzed,
along with some of the central controversies in macroeconomic theory and policy.
Objective:
By the end of the term, you should be able to summarize the major macroeconomic theories
developed to explain a national economys fluctuations and growth, and the relationships among
variables such as the government budget deficit, the money supply, GDP, the unemployment
rate, the inflation rate, interest rates, and the exchange rate. More specifically, the course will
address the following questions:
How do the various aggregate sectors of the economy (household, business, government,
foreign) interact to influence economic conditions such as output, prices, interest rates, and
employment?
What causes business cycles (i.e., short-run changes in aggregate conditions)?

 What affects rates of economic growth in the longer-run?

How can economic policy (especially monetary and fiscal policy) influence economic activity
in the short-run and in the long-run? How effective is each policy type?
Required Text:
The required text for the course is Macroeconomics, N. Gregory Mankiw, 8th edition, Worth
Publishers. ISBN: 9781429218870. (7th edition is OK). In addition, students are urged to read the
Wall Street Journal, Financial Times, the Economist or Business Week to keep current on
economic issues. The textbook has a very useful web site located at
http://bcs.worthpublishers.com/mankiw7 Among other items, this web site contains explanations
of key concepts, articles on current economic events, and interactive quizzes.
Grading:
Your grade will be based on two midterms, and a comprehensive final exam. Weight of each
evaluation component is as follows:
2 Midterm Exams: 50% (25% each)
Final Exam: 50%
Exams:
All exams are closed book and closed note. The first midterm will be in class on Tuesday, April
22. The second midterm will be in class on Thursday, May 22. If you miss a midterm, but have
a documented medical or family emergency, then 1/4 weight will be placed on the midterm you
did take. Otherwise, a missed midterm receives a grade of zero.
The final exam date and time is set by the registrar, and is offered only on Monday, June 9,
2014, 6:30pm - 9:30pm. A make-up exam for those with documented medical or family
emergencies will be offered during the break week following final exam week.
Course website:
https://moodle2.sscnet.ucla.edu/course/view/14S-ECON102-1
Check the course website often, as it will include lecture plans, recommended articles, answers
to chapter questions, practice questions, study guides, PowerPoints, TA office hours, and other
useful information.
Policy on Missed Exams:
Exams must be taken at their scheduled time. Please note that under no circumstances will a
makeup exam be administered if a student misses a midterm. If a student has a legitimate
emergency (by emergency I mean serious and unanticipated) and can provide acceptable
documentation of such of an emergency, then additional weight will be placed on the final exam.
Any such documentation, such as a doctors note, should clearly state that the student was
incapacitated and was therefore unable to take the exam or faced a serious impediment that
prevented attendance at the exam. A student who misses an exam without a valid, verifiable
excuse will receive a zero. If due to a verifiable emergency, a student misses the final exam, then
that student will be required to take a makeup final exam administered by the department at the

officially announced day and time. If a student misses all exams this student will receive an
automatic grade of F.
Attendance and Participation:
Class attendance is expected and necessary to learn the material and to succeed in this class.
Each student is responsible for keeping up with the assigned materials and being aware of
schedule or test date changes. Please notify the instructor in advance of any planned absences.
The importance of class participation cannot be overemphasized. Learning in a classroom is a
highly interactive process. Having a class that is actively involved in the learning process creates
a positive externality that is beneficial to everyone involved. During the semester we will have
time to discuss current events and/or breaking economic news in class. Since actively talking and
thinking economics may be the most important element to further your economic intuition, you
are highly encouraged to join these discussions.
Academic Integrity:
Students have an obligation to integrity in all academic work. In this course, submission of test
answers to be counted toward your course grade automatically implies a personal pledge that you
have neither given nor received unapproved information about the test, whether by copying
answers, exchanging unauthorized prior information, etc. The college may initiate disciplinary
proceedings against a student accused of scholastic dishonesty. Scholastic dishonesty may
involve one or more of the following acts: cheating, plagiarism, and/or falsifying academic
records. Cheating is the willful giving or receiving of information in an unauthorized manner
during an examination, illicitly obtaining examination questions in advance, using someone
elses work for assignments as if it were ones own or any other dishonest means of attempting
to fulfill the requirements of a course.
ACADEMIC DISHONESTY: Any cases of cheating will be reported to the Office of the Dean
of Students. For more details please refer to the Office of the Dean of Students website at
http://www.studentgroups.ucla.edu/dos/
DISABLED STUDENTS and the OFFICE of STUDENT DISABILITIES (OSD): Any student
with a pre-existing illness or condition who requests special arrangements must (a) qualify under
OSD rules for such special arrangements and (b) must take the exam with OSD. Any such
arrangements with OSD must be made the first week of classes. The instructor must be informed
of any such arrangement in the first week of classes. For additional information and the
qualification conditions of the Office of Student Disabilities (OSD), please visit their website at
http://www.osd.ucla.edu/Index.htm All other students must take the exam at the scheduled time
under the same time constraints. It is the responsibility of all students who request special
arrangements with OSD to be familiar with all of their rules as well as the rules of this class.

T. A. DUTIES: TAs will be responsible for handing back exams and reviewing the answers.
Once the review is finished, the exams will be collected immediately. Students will also be
allowed to look at their exams during TA office hours, but may not copy down questions or take
the exams with them. Grade appeals should be made to your TA in writing. If you are not
satisfied you may appeal to the professor. When a grade on an essay/problem question is
appealed, the entire essay/problem section will be reviewed. Any grade appeals must be made
within two weeks from the day the exams are first available for review.
Provisions for Possible Syllabus Addenda or Revisions: There may be changes in the
assignments and topics. Students are responsible for learning of any changes in the syllabus that
are announced in class.
Course Outline:
Our goal is to cover the following topics in lecture. Some of the end-of-chapter problems will be
discussed in the TA recitation meetings each week, and answers to these questions will be posted
on the course website each week. You may attend any TA recitation, even if you are not
registered in that recitation section, provided that there is space available. The textbook readings
are required. The other readings posted on the course website are to enhance your ability to learn
the material.
Tentative Course Schedule:
Date
April 1
April 3
April 8
April 10
April 15
April 17
April 22
April 24
April 29
May 1
May 6
May 8
May 13
May 15
May 20
May 22
May 27
May 29
June 3
June 5
June 9, 6:30pm 9:30pm

Topics
Syllabus & Introduction
Data of Macro
National Income
National Income
Money & Monetary System
Inflation
Midterm I
Open Economy
Open Economy
Economic Growth I
Economic Growth II
Economic Fluctuations
Aggregate Demand I (IS-LM)
Aggregate Demand II (IS-LM)
The Mundell-Fleming Model
Midterm II
Aggregate Supply and Phillips Curve
Stabilization Policy
Government Debt
Financial Crisis
Final

Chapters
1
2
3
3
4
5
6
6
8
9
10
11
12
13
14
18
19
20
Cumulative