U.S.
Government Fiscal and Monetary Policy
Fall
2005
Prof.
Gary Evans
Welcome
to Economics 108, an advanced course on U.S. Government Fiscal and Monetary
Policy. This course explores in depth the
fiscal operations and policies of the U. S. government and of the nation's
central bank, the Federal Reserve System.
The
section on U.S. government fiscal operations will include a detailed,
disaggregated review of the federal budget, including expenditures, tax and
other revenue sources, deficits, and the means of financing for deficits. Budgetary timetables, some legislation, and
budgetary procedures will also be reviewed.
In
the section on the Federal Reserve System and monetary policy, we will review
how the Federal Reserve sets monetary and interest rate targets, how open
market operations are used to achieve their goals, how the Federal Reserve
functions as a semi-political institution, and how their policies have changed
over the last three decades.
In
both cases the external impact of the policies upon the economy will be
extensively explored. Some of this
exploration will be with theory and some with a review of history. The impact upon inflation rates,
inflationary expectations, and interest rates, and in the case of the Federal
Reserve, their reaction to changes in these rates will get considerable
attention.
This
course is designed to be taught without requiring macroeconomics as a
prerequisite. Some macroeconomic theory
is used in this course, but what is needed is taught as the course proceeds.
The focus of the class is not on economic theory. Theory is used as a guideline to help
understand policy and how it works in this economy. The primary orientation of this class is very nuts 'n bolts; we
want to know what these policy-makers do and how they do it.
Reading Material
One
book must be purchased for this course:
Evans,
Gary. Red Ink - The Budget, Deficit and Debt of the U.S. Government,
Academic Press, 1997, ISBN 0-12-224080-3.
In
addition to this books, the following chapters from an older book will be used
in the course. They will on the reading assignment page from this class:
1.
Evans,
Gary, Money: From MX=PY to IS-LM, chapter 6 from Evans and Sherman, Macroeconomics,
1984.
2.
Ibid., Monetary
Theories of the Business Cycle, chapter 18 from Evans and Sherman, Macroeconomics,
1984.
3. Ibid., Monetary
Policy, chapter 24 from Evans and Sherman, Macroeconomics, 1984.
A
series of PDF-formatted articles about the Federal Reserve System is also
required reading for this course. They are also available on the reading assignment page for this course.
Please
check the reading material on the web site from time to time because some
material will be added as the class proceeds. Announcement will be made in
class and by email when that happens, but you should get into the habit of
checking the site periodically for new material.
Grades
You
will take two examinations during the course, a midterm based upon the
fiscal-policy component of the course and the final based upon the
monetary-policy component of the course.
You will also be asked to write a brief report about a specific agency budget for a grade. The exams are equally
weighted at 40% of your grade and the written report is weighted at 20% of your
grade. All examinations are essay
exams. See the Course Calendar for the appropriate dates.
Policy
on regrades: Within
a week of receiving your exam back, you have the right to protest the grading
of a question. To do so, you must
resubmit the entire exam attached to an 8½” by 11" sheet of paper
explaining why you think you deserve more credit. I will consider your complaint and regrade your exam. After one week has passed, I will no longer
accept regrade requests.
Course Calendar
The
course calendar for this
class is provided separately.