15.012  Applied Macro. & International Economics (H1)

The slides for today's class are in Stellar:
https://stellar.mit.edu/S/course/15/sp13/15.012/courseMaterial/topics/topic1/lectureNotes/6-Exchange_Rates/6-Exchange_Rates.pdf

Thanks,
Alberto

Dear all,
The deadline for submitting your slides is now Sunday at 5pm. Please email the powerpoint file (or pdf) to your TA. You have to make sure they received it by the deadline, so please get a confirmation.
We will announce who is presenting (in both debates) on Monday afternoon.
Thanks,
Alberto

Dear all,

I wanted to give some important clarification on the assignment. We are not asking you to write an essay comparing the philosophies of these two economists, or anything like that. The video is just another way to give you a list of ideas that we are asking you to interpret using AS-AD. In fact, you don't even need to watch the video to get the perfect answer, you could simply address each of the phrases listed in the assignment using the AS-AD model. Basically, we want to know if you understand the AS-AD model and can use it to interpret some common economic ideas that we hear about all the time in political and economic discussions. Any of Keynes' or Hayek's theories that are not phrased in the video (or in the list printed with the assignment), then you don't need to worry about here. Also, we are not asking you to tell us which of these conomists is "right" (they both have important points to make). We just want to see if you understand clearly what those ideas imply in the model and the economy.

A perfect answer can be less than 2 pages long, including graphs. It does not have to be written as an essay. In fact, I would recommend just a collection of bullet points (a few sentences long each) that explain each of these statements. We do not care about your grammar skills or eloquence, only about your understanding of economics. For example: Can you explain why "persistent unemployment is the result of sticky wages" with AS-AD? A great answer should include a simple graph and can be as short as 3 or 4 sentences. You have to explain what "sticky wages" are and why they occur, and then why this could lead to persistent unemployment (think of AS-AD, what type of shock would create this situation).

I hope this helps. Please let me or any of the TAs know if you have any questions.

Thanks,

Alberto