Economics 304L (34355)
Introduction to Macroeconomics


Fall 2011
Monday, Wednesday and Friday, 8:00-9:00am, JES A121A
Professor Harry Cleaver
Office: BRB 3.162
Office Hours: T:8:00-10:00am, MW:10:00-11:00am, BRB 3.162

Teaching Assistants:
TBA, office hours: TBA
TBA, office hours: TBA
TBA, office hours: TBA.

Warning: This syllabus is currently undergoing revision.


This is an introductory course in macroeconomics structured to present and develop the usual topics of the field as elements in the analysis of the current economic crisis - both national and international. The course begins with a discussion of the nature of economics and of the variations in the kinds of capitalist economies that "economics" studies. It continues with a brief examination of "the market" and what it means to speak of crisis and growth in this period. I provide an overview and analysis of the institutions and dynamics of growth in the post-W.W. II period, their breakdown in the 1960s and the spread of international crisis in the 1970s, the rise of neoliberalism as a response and and the crises of various neoliberal strategies that ensued in the 1980s to the present.

After this historical overview - designed to both motivate and situate the study of economic theory - the course turns to a detailed exploration of macroeconomic theory and its development over the last 50 years. We study the long dominant Keynesian model of the macroeconomy with its emphasis on employment and output, its crisis in the late 1960s and early 1970s, the rise of monetarist alternatives, the elaboration of aggregate supply and demand models that highlight prices instead of employment, the surge of supply-side and rational expectations economics during the first Reagan administration and the continuing debates among economists over the merits and problems of the various theoretical approaches. As this list might suggest, there is little consensus among economists over economic theory at this point in history. The long prominent Keynesian concensus of the profession has been largely, but by no means entirely, replaced by neoliberalism - a market worshiping ideology that has been wielded against labor, government regulation and the various programs of the "welfare state" that have cushioned economic change for the poor and middle class. On-going debates between neoliberals and neo-Keynesians require students to understand the arguments mobilized by both sides and decide which ones make the most sense. The course design is aimed a facilitating this process by putting the developments within an historical and political framework.

Basically students are required to 1) understand and be able to explain various assigned texts, 2) understand and be able to explain the lectures (which include critical commentary on those texts) and 3) develop their own views on the material covered and be able to articulate the reasoning behind their acceptance of some positions and their rejection of others.

Study Resources

The primary textbook for this course as recently as Fall 2010 was Karl E. Case, Ray C. Fair and Sharon Oster, Principles of Macroeconomics, Ninth Edition, Upper Saddle River: Prentice Hall, 2008 which is available in the usual places. However, since Spring 2011 - I have not ordered any textbook for the course.

The reasons for not ordering any textbook are the following: first, because I disagree with the usual textbook manner of discussing macroeconomic theory (and macro textbooks are all very similar) I have long organized my lectures quite differently. As you will discover, because I believe that theory should be, indeed can only be, understood within the historical context in which it was formulated, my lectures are organized accordingly. In other words, I present macroeconomics as it evolved in the last half century or so. As a result whichever textbook I might choose for students merely provides some material covering a smaller set of the same ideas that I present in lectures. That smaller set consists mainly of a-historical explanations of various aspects of the theory as it is usually presented today. Therefore, I have, in the past, assigned material from the text according to my own logic of dealing with the issues at hand.

Second, every macroeconomic textbook I have examined is ridiculously expensive and while I do recommend that you obtain a copy for the vast amount of information it obtains, most of what you will need to focus on will be presented in lectures and in other assigned materials (generally made available through this webpage). Personally, I used, kept and repeatedly reused - for many years - the introductory textbook that was assigned in my first economics course precisely because it served as a useful reference book, either for things I had "learned" and forgotten, or for things I never studied the first time around. Virtually all such textbooks contain far more material than it is possible to cover in any one semester course.

Because the presentation of macroeconomic theory in this course is historical, the odds have it - given the usually pathetic quality of the American and world history courses you are likely to have encountered - that you will frequently need to look up and add to your knowledge of specific historical periods, phenomena, people, events and so on in order to better understand the theory, its genesis and its use. I encourage you to do so. These days the Internet makes this very easy although all the usual admonitions about being critical in your research apply.

It is highly recommended that you read and study the material assigned before attending the lectures on that material because lectures will be structured on the assumption that you have done so. A course outline is provided below so that you will know what material will be covered when. Ad hoc additions or changes will be announced in class and on Blackboard. Blackboard also provides discussion forums - places where you can discuss the material among yourselves and/or with me. If you feel more comfortable asking questions there rather than in class please feel free to do so, and to answer others' questions.

Along with weekly lectures, you also have the possibility of making use of my office hours to ask questions and discuss the material covered in the book or in class. The Learning Skills Center, in Jester A332, has resources available to you specifically designed for introductory economics courses.


Three tests at regular intervals. These tests will be mainly made up of essay questions based on material covered in class but also problems based on simple mathematical macro models such as those analyzed in class and illustrated in work sheets. (For this reason class attendance is recommended.)

The tests are not cumulative in the sense that questions in later tests will not duplicate those in earlier tests, but they are cumulative in the sense that later material usually builds on earlier material. Therefore, there is no "final" exam in the usual sense. The first test covers the first third of the material; the second test covers the second third; the last test covers the last third and will be given during final exam week. The final score will be based on weighing each of the tests almost equally, i.e.., final grade = .333(firsttestscore) + .333(secondtestscore) + .334(thirdtestscore). The final distribution of averaged numerical grades will be divided into letter grade categories. I take account of systematic improvement in test scores and sometimes it can result in a higher letter grade than would otherwise be the case.

NB: Students with disabilities may request appropriate academic accomodations from the Division of Diversity and Community Engagement, Services for Students with Disabilities, 471-6259.

Course Outline (currently being revised)


What is Economics?

Cleaver packet: Chapter 1: "The Definition of Economics" + lectures + slides.

Variations in Capitalist Economies

Cleaver slides & lectures.

The Market

Cleaver slides & lectures.

Growth and Accumulation, a Theoretical and Historical Overview

Cleaver packet: Chapter 2, "Growth" + slides & lectures.

Classical Economic Crises

Cleaver packet: Chapter 3 "Economic Crises Before the Great Depression" + slides + lectures

The Great Depression and Keynesianism

Cleaver Packet: Chapter 4: "The Great Depression and the Keynesian Solution" + lectures + slides.

FIRST TEST:September 28, 2010.

Keynesian Macroeconomics

Income Determination, Private Sector

Lectures + slides

Income Determination, Adding Government and the World

Lectures + slides

Income Determination: Monetary Policy

Derivation of IS-LM Model

Lectures + slides

The Collapse of Keynesianism

Cleaver packet: Chapter 5, "The Crisis of the Keynesian Era" + lectures + slides


"Inflation": Problem or Solution?

Post-Keynesian Economics: Aggregate Supply and Demand

Lectures + slides

Monetarism and New Classical, or Neoliberal, Economics

Cleaver Packet: "Supply Side Economics: The New Phase of Capitalist Strategy in the Crisis" + lectures + slides.

The Global Debt Crisis

Cleaver Packet:
H. Cleaver, "Close the IMF, Abolish Debt and End Development:A Class Analysis of the International Debt Crisis",
Peter G. Peterson, "The Morning After" The Atlantic, October 1987,
Jeff Faux, "The Austerity Trap and the Growth Alternative", World Policy Review, Summer 1988, pp. 387-413.
+ lectures + slides

The Current Financial and Economic Crisis

Lectures and a variety of materials to be provided.

No Final, Last Test during Exam Week