Econ 2
Lecture 1: Introduction and What is GDP?
Siwei Kwok
September 26, 2013
Kwok
Econ 2
September 26, 2013
1 / 31
Motivation
In Econ 1, you studied:
Consumer and rm decisions
→
supply/demand curves
→
market
equilibrium under perfect competition
Government action: price ceiling, price oors
Positive and negative externalities
Imperfect competition: monopolies, oligopolies, cartels
Note that all of the above considered, at most, a couple markets at the same time. Imagine a country (such as the U.S.) with thousands of these markets. How can we study the behavior of the U.S.'s economy as a whole?
Kwok
Econ 2
September 26, 2013
2 / 31
Motivation - Why Study An Economy?
By studying the U.S. economy as a whole, we can better understand how policies can aect the U.S. economy and other important aspects such as nancial markets and unemployment.
The performance of the U.S. economy aects how it does in international markets, and indicates the standard of living in the U.S.
In this course, you will study interactions in a whole economy, as an aggregation of individual markets. You will learn the language of macroeconomics and pick up tools to be able to interpret and analyze macroeconomic problems.
Micro-founded approach: you will still see ghosts of Econ 1 in this course. Kwok
Econ 2
September 26, 2013
3 / 31
Course Schedule
Week
Tuesday
Thursday
0 (9/24, 9/26)
No Lecture
Measuring GDP
1 (10/1, 10/3)
Economic Growth
Capital Accumulation
2 (10/8, 10/10)
Capital Accumulation
Labor
3 (10/15, 10/17)
Business Cycles
Business Cycles
4 (10/22, 10/24)
Saving and Investing
Saving and Investing
5 (10/29, 10/31)
Midterm Exam
Quantity Theory of Money
6 (11/5, 11/7)
Quantity Theory of Money
The Federal Reserve
7 (11/12, 11/14)
Monetary Policy
Monetary Policy
8 (11/19, 11/21)
The Federal Budget
Fiscal Policy
9
Siwei Kwok
September 26, 2013
Kwok
Econ 2
September 26, 2013
1 / 31
Motivation
In Econ 1, you studied:
Consumer and rm decisions
→
supply/demand curves
→
market
equilibrium under perfect competition
Government action: price ceiling, price oors
Positive and negative externalities
Imperfect competition: monopolies, oligopolies, cartels
Note that all of the above considered, at most, a couple markets at the same time. Imagine a country (such as the U.S.) with thousands of these markets. How can we study the behavior of the U.S.'s economy as a whole?
Kwok
Econ 2
September 26, 2013
2 / 31
Motivation - Why Study An Economy?
By studying the U.S. economy as a whole, we can better understand how policies can aect the U.S. economy and other important aspects such as nancial markets and unemployment.
The performance of the U.S. economy aects how it does in international markets, and indicates the standard of living in the U.S.
In this course, you will study interactions in a whole economy, as an aggregation of individual markets. You will learn the language of macroeconomics and pick up tools to be able to interpret and analyze macroeconomic problems.
Micro-founded approach: you will still see ghosts of Econ 1 in this course. Kwok
Econ 2
September 26, 2013
3 / 31
Course Schedule
Week
Tuesday
Thursday
0 (9/24, 9/26)
No Lecture
Measuring GDP
1 (10/1, 10/3)
Economic Growth
Capital Accumulation
2 (10/8, 10/10)
Capital Accumulation
Labor
3 (10/15, 10/17)
Business Cycles
Business Cycles
4 (10/22, 10/24)
Saving and Investing
Saving and Investing
5 (10/29, 10/31)
Midterm Exam
Quantity Theory of Money
6 (11/5, 11/7)
Quantity Theory of Money
The Federal Reserve
7 (11/12, 11/14)
Monetary Policy
Monetary Policy
8 (11/19, 11/21)
The Federal Budget
Fiscal Policy
9