NYU Stern School of Business

Undergraduate College

MULT-UB.0230.001 (C70.0230): Global Macroeconomics

Spring 2012

Instructor Details

Cooley, Thomas


212 998-0870


KMC 7-88


Thomas F. Cooley is the Paganelli-Bull Professor of Economics at the Leonard N. Stern School of Business at New York University, as well as a Professor of Economics in the NYU Faculty of Arts and Science. He served as Dean of :the Stern School from 2002 to January 2010. Before joining Stern, he was a Professor of Economics at the University of Rochester, University of Pennsylvania, and UC Santa Barbara. Prior to his academic career, he was a systems engineer for IBM Corporation. A Research Associate of the National Bureau of Economic Research and a member of the Council on Foreign Relations he is also the former President of the Society for Economic Dynamics, a Fellow of the Econometric Society and holds an honorary doctorate from the Stockholm School of Economics. He is a widely published scholar in the areas of macroeconomic theory, monetary theory and policy and the financial behavior of firms. He has been a senior advisor and member of the Board of Managers of Standard & Poors since December 2010. He also writes frequent opinion columns for Forbes.com, the Wall Street Journal and other news media.

Responding to the financial crisis of fall 2008, he spearheaded a research and policy initiative that yielded 18 white papers by 33 NYU Stern professors, published as Restoring Financial Stability: How to Repair a Failed System, (Wiley, 2009). Together with Stern colleagues he edited and wrote the book, Regulating Wall Street, TheDodd-Frank Act and The New Architecture of Global Finance  published by Wiley in November, 2010.  In June of 2011 he published, with Stern colleagues the e-book  Dodd-Frank: One Year On at Voxeu http://www.voxeu.org/index.php?q=node/6742. He also authors the web site Cooley-Rupert Economic Snapshot at  http://econsnapshot.wordpress.com.


Course Meetings

MW, 11:00am to 12:15pm

KMC 5-80


Course Description and Learning Goals

About the course

There are huge differences in economic well being across countries. The most suc-
cessful economies have incomes that are many multiples of the incomes of poorest
countries. Some economies are able to grow their way out of poverty, some are
not. There are also huge differences in economic well being over time within a given
country. Both successful and poor economies go through periods of expansion and
contraction. In this course we will use the tools of economics to explore differences
in the economic and business environments and understnad the impact of these dif-
ferences on both the long term and short term success of economies. By the end of
the course, you will be able to:

• Describe the causes of good long-term performance: why per capita income is
higher in the US and France than in China and India, and why China and India
are among the fastest growing countries in the world.

• Understand the features of expansions and contractions in economic activity
and how they manifest themselves in labor markets, credit markets and product

• Evaluate indicators of good short-term performance and their impact on product
and financial markets.

• Understand the role of monetary and fiscal policy in the US and other countries.
These skills will serve you well, whether you are selling corporate bonds, marketing
consumer products, advising clients on their international operations, managing an
emerging market hedge fund, or even working for the Metropolitan Opera.


Course Pre-Requisites


I expect you to be able to apply basic tools of economics, statistics, and mathematics.
We will use logarithms (extensively) and calculus (somewhat). A math review will be
posted on the Course web site as soon as it is active. It would be good if you review
it before the term starts.



I also expect you to be able to use Excel or similar spreadsheet programs to perform
computational exercises and perform statistical analysis.


Course Outline

Outline of Topics By Date

1. January 23 - Introduction
2. January 25 - Macroeconomic Data
3. Janaury 30 - The Aggregate Production Function
4. February 1 - The Malthusian Growth Model
5. February 6 - Solow’s Model of Economic Growth
6. February 13 - Sources of Economic Growth
7. February 15 - Institutions and Growth
8. February 20 - No Class
9. February 22 - MidTerm Exam
10. February 27 - Labor Markets
11. February 29 - Capital Markets
12. March 5 - International Trade
13. March 6 - Business Cycle Properties
14. March10 - March 17 Spring Break
15. March 19 - Business Cycle Indicators
16. March 21 - Business Cycle Theory
17. March 26 - Mid Term Exam
18. March 28 - Monetary Policy and Inflation
19. April 2 - Money and Interest Rates

20. April 4 - Fiscal Policy
21. April 9 - Taxes
22. April 11 - The Balance of Payments and Capital Flows
23. April 16 - Exchange Rates
24. April 18 - Financial Crises
25. April 23 - Financial Crises
26. April 25 - TBD
27. April 30 - Review


Required Course Materials

Course material

We will use a variety of materials, including:

• Notes . We will use custom-designed (“bespoke”) notes that will be distributed
the first day of class and posted on Blackboard. They are much more concise
than a textbook. Some of the material is demanding, so it’s helpful to at least
skim them before class and read them again afterwards.

• Optional textbook. Most students do not use a textbook for this course. But if
economics is new to you, or you prefer a more leisurely presentation, you might
consider buying Mankiw’s Macroeconomics . If you do, I suggest you buy a used
copy of the 6th edition on Amazon or eBay. The current edition is the 7th, but
it’s significantly more expensive and no more useful for our purposes.
Do NOT buy Mankiw’s Principles of Macroeconomics . That’s the macro half
of his principles book, not his macroeconomics book. Here’s a link to the right

The Economist .
I highly recommend reading it as a supplement to the course. It’s a wonderful
weekly summary of what’s going on in the world and economic events. Bring it
with you on the subway.

• Slides . I will post them after class. If you find them difficult to read on their
own, that’s a feature not a bug — they’re designed to facilitate discussion and
have gaps for the class to fill in.


Assessment Components

Your grade will be based on:

Class participation 10%

Group Pro jects 20%

Midterm exams 40%

Final exam 30%


Group Projects

Guidelines for Group Projects

Business activities involve group effort. Consequently, learning how to work effectively in a group is a critical part of your business education.

Every member is expected to carry an equal share of the group’s workload. As such, it is in your interest to be involved in all aspects of the project. Even if you divide the work rather than work on each piece together, you are still responsible for each part. The group project will be graded as a whole:   its different components will not be graded separately. Your exams may contain questions that are based on aspects of your group projects.

It is recommended that each group establish ground rules early in the process to facilitate your joint work including a problem-solving process for handling conflicts. In the infrequent case where you believe that a group member is not carrying out his or her fair share of work, you are urged not to permit problems to develop to a point where they become serious. If you cannot resolve conflicts internally after your best efforts, they should be brought to my attention and I will work with you to find a resolution.

You will be asked to complete a peer evaluation form to evaluate the contribution of each of your group members (including your own contribution) at the conclusion of each project. If there is consensus that a group member did not contribute a fair share of work to the project, I will consider this feedback during grading.



At NYU Stern we seek to teach challenging courses that allow students to demonstrate their mastery of the subject matter.  In general, students in undergraduate core courses can expect a grading distribution where: 

Note that while the School uses these ranges  as a guide, the actual distribution for this course and your own grade will depend upon how well  you actually perform in this course.


Professional Responsibilities For This Course




In-class contribution is a significant part of your grade and an important part of our shared learning experience. Your active participation helps me to evaluate your overall performance.
You can excel in this area if you come to class on time and contribute to the course by:




Classroom Norms


Stern Policies

General Behavior
The School expects that students will conduct themselves with respect and professionalism toward faculty, students, and others present in class and will follow the rules laid down by the instructor for classroom behavior.  Students who fail to do so may be asked to leave the classroom. 


Collaboration on Graded Assignments
Students may not work together on graded assignment unless the instructor gives express permission. 


Course Evaluations
Course evaluations are important to us and to students who come after you.  Please complete them thoughtfully.


Academic Integrity

Integrity is critical to the learning process and to all that we do here at NYU Stern. As members of our community, all students agree to abide by the NYU Stern Student Code of Conduct, which includes a commitment to:

The entire Stern Student Code of Conduct applies to all students enrolled in Stern courses and can be found here:

Undergraduate College: http://www.stern.nyu.edu/uc/codeofconduct
Graduate Programs: http://w4.stern.nyu.edu/studentactivities/involved.cfm?doc_id=102505

To help ensure the integrity of our learning community, prose assignments you submit to Blackboard will be submitted to Turnitin.  Turnitin will compare your submission to a database of prior submissions to Turnitin, current and archived Web pages, periodicals, journals, and publications.  Additionally, your document will become part of the Turnitin database.


Recording of Classes

Your class may be recorded for educational purposes


Students with Disabilities

If you have a qualified disability and will require academic accommodation of any kind during this course, you must notify me at the beginning of the course and provide a letter from the Moses Center for Students with Disabilities (CSD, 998-4980, www.nyu.edu/csd) verifying your registration and outlining the accommodations they recommend.  If you will need to take an exam at the CSD, you must submit a completed Exam Accommodations Form to them at least one week prior to the scheduled exam time to be guaranteed accommodation.


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