1. What is macroeconomics?  Macroeconomics studies the evolution of certain economic aggregates over time (what drives the trends in total production, consumption, the overall price level, unemployment, etc)  In microeconomics the object of interest is a single firm or household. In macroeconomics we study countries or regions

2. Why should you care about macroeconomics?  The performance of the overall economy affects us every day at the individual level (interest rates, stock market, taxes, economic recessions)  It will help you performing successful business (or professional) decisions  It is useful for understanding and criticizing policy makers  If you want a job in an international organization (IMF, World Bank, etc), or admission to the best law and business schools, economics will give you a competitive edge.

3. Main topics we will discuss  Why some countries are rich and others poor?  Why the economy fluctuates over time?  How do taxes and regulations affect the economy?  International trade

4. Midterm 1 Economic Growth

5. Cross country differences in per capita income  Great disparity in average income per capita High income countries: $29 450 US High income countries: $29 450 US Subsaharan Africa: $ 1 770 Subsaharan Africa: $ 1 770 Low income countries: $ 2 190 US Low income countries: $ 2 190 US Medium income: $ 6 000 Medium income: $ 6 000 Latin America: $ 7 080 Latin America: $ 7 080 Middle income Europe & central asia: $7 570 Middle income Europe & central asia: $7 570Why!

6. Some countries just do not catch up

7. What causes an economic disaster or an economic miracle?

8. Why do we care?  The welfare implications of increasing the income of poor countries to the level of rich countries are staggering  You will be able to use data and theory to analyze the current and expected performance of any country (which increases your professional market value)

9. Midterm 2 Business Cycles

10. All economies experience expansions and recessions. Why?

11. Source: Kehoe and Prescott (2001) Can something be done to avoid major economic crisis?

12. Why do we care?  A volatile economic environment complicates choices and may affect welfare  Economic slowdowns come together with high unemployment, high bankruptcy rates, low consumption, increase in crime rates, etc.  We want to understand what causes economic fluctuations to determine whether economic policy can and should be used to smooth them out

13. Economic distortions and the macroeconomy

14. Americans (particularly married women) work much more…

15. Maybe do to better payment for women and lower labor income taxes

16. Midterm 3 International Trade

17. Main questions  What are the implications of opening the borders to free trade? Who wins?, who looses?, what is the overall effect?