Principles of Macroeconomics (Eco 212)

Principles of Macroeconomics (Eco 212)



Course Description

Macroeconomics is the study of how the economy as a whole grows and changes over time. Principles of Macroeconomics gives the students some basic tools in macroeconomics. The student will first learn how to measure economic performance. There are many elements and dimensions to the performance of the economy (GDP, inflation, unemployment, etc.). Here we learn not only what these measures are, but also get a perspective on the strengths, weaknesses, and uses of each. Next, we will learn how to put these elements of the economy together in order to analyze issues in macroeconomics. By far the most important of these is long run growth. Minute differences in the growth rate of economies in the long run are the differences between the wealthy and poor countries. What determines long run growth? Why do some countries grow faster than others? The second issue is short run growth, or the business cycle, the booms and recessions, periods of inflation and deflation, full employment and unemployment that characterize the year to year changes in the economy. What effect does changes in taxes and spending by the government, and changes in interest rates under control of the Federal Reserve, have on the business cycle?

General Information

Professor: David L. Kelly, Associate Professor, Dept. of Economics (Dave).

Course Meetings: The class meets weekdays, Monday to Friday, from 11:40 am to 1:05 pm in GB 431.

Office: Room 521B, Jenkins School of Business.

Office hours: Office hours will be held from 2-3 pm on the day before any homework or quiz is due.

Contacts: Dave can be contacted via phone (8x3725) or email (

Web Site: Dave has established a website ( for this course. At this site, you can download or view course material (homeworks, etc.), as well as a continuously updated syllabus. Additionally, you may check your grades on EASY HERE.

Final Exam: The final exam is Friday, August 2, 11:40 to 1:05, in the same room (GB 431).


This course is the second course in the series, and requires Eco 211 (Economic Principles and Problems).


There is a required textbook:

John B. Taylor, Principles of Macroeconomics. Houghton Mifflin, 7th edition.


You can now access your grades online using EASY. Click HERE!

Additional Notes

Some Macro Links and Career Information

Course Outline

  1. Introduction (June 26).
    1. What is Macroeconomics? (chapter 5)
    2. Economic Models (chapter 2)
    3. Concerns and issues in macroeconomics (chapter 5)
    4. Tools used in macroeconomics (chapter 2)
  2. Measuring Economic Performance
    1. Output markets (June 27 - July 3)
      1. Gross Domestic Product (chapter 6)
      2. Income distribution
      3. Welfare
      4. Prices and Inflation
      5. Homework 1, DUE July 3
    2. Input markets (July 5 - July 9).
      1. Labor markets and employment (chapter 8)
      2. Capital and investment (chapter 7,9)
    3. Financial markets (July 10 - July 16).
      1. Interest rates (chapter 7,9)
      2. Money (chapter 10)
      4. The banking system (chapter 10)
    4. Foreign exchange markets (chapter 7, July 17 - July 19)
    5. HOMEWORK 2, DUE JULY 16.
  3. Long Run Growth (July 17 - July 23)
    1. Determinants of Long Run Growth
    2. Technology (chapter 9)
    3. Differences in long run growth across countries (chapter 17)
  4. Business cycles
    1. Aggregate Supply (chapter 12, July 24)
    2. Aggregate Demand (chapter 11-12, July 24 - July 26)
      1. Consumption Spending
      2. Spending Balance
      3. Investment Spending
      4. Government Spending
      5. Net Export Spending
    4. Short and Long Run Equilibrium (chapter 12)
    5. Applying the Business Cycle Model (July 30 - August 1)
      1. Monetary Policy (chapters 13,15)
      2. Price Shocks (chapter 13)
      3. Fiscal Policy (chapters 13,14)

Learning objectives.



Important graphs and tables


Business Cycle Graphs for Final Challenge

Other Links

Up to Dave Kelly's homepage

Macroeconomics Links

Careers in Economics