Instructor: Benjamin Earl Fissel
Instructor Email: bfissel@ucsd.edu
Prerequisites: None

Course Description: Recent event has brought attention to the fact that fluctuations of aggregate economic activity have an important and direct impact on our everyday lives. The course introduces the students to concepts in macroeconomics, and examine the relationship between financial markets and the economy. Why do stock prices, interest rates, employment, and inflation all go up together in an economic expansion? Why do central bankers lower interest rates when the economy nears a recession? In which ways can a crisis in financial markets negatively affect an otherwise healthy economy? These are the key questions that will be addressed in the course.

Course Objectives:

The core objective of the course is for the students to become familiar with important notions related to the current economic situation, which we hear over and again in the media: Inflation, employment, monetary policy, interest rates, just to name a few. This will enable them to understand better and hopefully become more interested in the news coverage about current economic developments.

Expectations:

In addition to attending classes and working on group homework, students will follow the news media by reading and discussing selected articles on the macroeconomic situation.

Course Outline:

Week I:

Class room: Principles of Macroeconomics – The basics of GDP, consumption, investment, exports

and imports. Definition and characteristics of unemployment. Price stability and the cost of inflation.

Group work: Analyzing Macroeconomic data.  Releases on production, retail sales, employment and inflation.

Week II:

Class room: Overview of financial markets. Interest rates and economic activity. The role of the central bank – what are the goals and instruments of monetary policy? How does the Federal Reserve conduct monetary policy in the U.S.

Group work: Recent decisions of the Federal Reserve. Current situation of financial markets.

Week III:

Class room: Booms and recessions – historical perspective vs. current situation. What did the last four recessions look like? The interplay between real economic activity and financial markets.

Group work: Judging the current economic situation. Forecasting future developments.