Finance 1010 – Monetary Economics and the Global Economy

Spring 2023 Syllabus

Professor Gideon Bornstein and Professor Sean Myers

Communication: Prof. Bornstein: profbornstein@gmail.com

Prof. Myers: profsmyers@gmail.com

Office Hours: Wednesday 4:00 PM to 5:00 PM (Also, by appointment)

Lectures: Tuesdays and Thursdays

FNCE 101-001 from 8:30 AM to 10:00 AM
FNCE 101-002 from 10:15 AM to 11:45 AM
FNCE 101-003 from 1:45 PM to 3:15 PM
FNCE 101-004 from 3:30 PM to 5:00 PM

TAs: Jacob Gould

Andrea Jury
Rachel Pang
Melanie Sporn
Michael Sun

Recitations: Fridays

Time: 8:30 AM to 9:30 AM

TA: Rachel Pang

Time: 10:15 AM to 11:15 AM

TA: Andrea Jury

Time: 12:00 PM to 1:00 PM

TA: Jacob Gould

Time: 1:45 PM to 2:45 PM

TA: Melanie Sporn

TA office hours: Andrea Jury – Monday, 12:00 PM to 1:00 PM

Melanie Sporn – Tuesday, 3:45 PM to 4:45 PM
Jacob Gould – Wednesday, 11:00 AM to 12:00 PM
Rachel Pang – Thursday, 5:00 PM to 6:00 PM

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1. Course Description
FNCE 1010 is an intermediate-level course in macroeconomics, with an emphasis on
monetary policy and international macroeconomics. The goal of the course is to provide
a unified framework to analyze macroeconomic topics such as business cycles, inflation,
monetary policy, fiscal policy, and exchange rates. The ultimate objective is to teach
students how to evaluate the global economic environment in which business decisions
are made. Throughout the course, we will apply our analysis to current events, both in
the United States and across the globe.

The course is structured into the following parts: national accounts, markets, general
equilibrium and business cycles, monetary policy, and the open economy. The first part
addresses how economists gauge the performance of the economy as a whole, and
focuses on the components of GDP and inflation. The second part covers the key markets
at the national level: the labor market, the goods market, and the asset market. The third
part shows how equilibrium across these different markets shape the state of the
economy, and how the economy responds to different types of shocks. The fourth part of
the course analyzes the role of monetary policy, with a particular focus on the decisions
made by the Federal Reserve System during the Great Recession. The final part of the
course teaches how macroeconomic dynamics change when countries can trade goods
and assets internationally.

2. Course Materials
The required textbook for the course is “Macroeconomics” by Abel, Bernanke, and
Croushore [ABC] (Pearson, 10th edition). The textbook is available for purchase in the
bookstore.1

If the lecture includes required readings, those would be available at least 24 hours prior
to the lecture. The slide deck will be also available on Canvas before each class. 2

Websites: Canvas, Ed Discussion, and PollEverywhere.

On Canvas you’ll be able to access:

• Announcements
• Modules
• Syllabus
• Ed Discussion
• Lecture Slides
• Lecture Readings – from several media sources and the Fed
• TA and Professor Contact Information, Office hour information
• Recitation Guideline

1
Using older editions of ABC is fine.
2
Throughout the semester, we encourage you to keep current with economic news, as we will discuss
some of them in class. A subscription to The Financial Times, The Wall Street Journal, The Economist, or a
close substitute is recommended.

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 • Global Analysis Project (GAP) Details
• Your Grades

All official announcement regarding the class will be done via Canvas.

We will be using Ed Discussion for class discussion. The system is highly catered to
getting you help fast and efficiently from classmates, the TAs, and ourselves. Rather than
emailing questions to the teaching staff, we encourage you to post your questions on Ed
Discussion. Students are not allowed to post on Ed Discussion on exam days. Find our
class page via Canvas.

More sensitive questions that you don’t want shared with others are of course welcome
over email. Please let us know of any difficulties you may be having with the course as soon as
possible. These difficulties may arise from the course itself, or external forces (e.g., other
courses, personal issues). Regardless of the source, let us know as soon as possible so we
can work together to avoid larger problems later. Wharton and the University offer a
wide range of support services that are geared towards helping students.

During classes, we will be using PollEverywhere. This is a platform in which you will
answer multiple choice questions on class material. Participating in polls count towards
your participation grade. The goal of the questions is to provide you practice and help
us gauge the understanding of the material. Therefore, participation rather than
correctness of answers is what counts towards your grade. To participate, you'll need to
have a phone or laptop handy in-class. You'll need to have an account at PollEverywhere.

3. Grading
The final grade for the course is based on:
Exams: 60%
Problem sets: 20%
GAP Project: 10%
Class participation: 10%

Exams

There is a Midterm exam and a Final exam during finals week

Midterm: February 28th at 7pm (Lectures 1 to 13)
Final: TBA (Lectures 1 to 28)

See the Class Schedule for additional details on the material covered in each Exam.

The weight of the midterm exam is 40% (24% of the final grade of the class) and the weight
of the final exam is 60% (36% of the final grade of the class).

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Departmental policy says:
There are only a few valid excuses for missing an exam. They are:
◦ Documented illness/health emergencies
◦ Religious observance
◦ Documented disabilities that allow you to take the exam under other
circumstances
◦ A death in the family

Examples of reasons that are not valid for missing an exam are:
◦ Job interviews
◦ Job internships

If you are unexpectedly ill at the time of the exam and unable to reach the instructor
ahead of time, then you can give notification and documentation of your illness as soon
as you are able. Do not take an exam if you are ill and then expect to have an opportunity
to retake the exam because you were ill the first time and did poorly.

Any request for a required make-up exam or for disability accommodations must be
made at least one week before the exam. In case of serious illness on exam day, you must
notify the professor before the exam begins, and provide official documentation from a
doctor as soon as possible afterwards.

The exams are “closed book”. That is, you are not allowed to bring any material to the
exam.

Problem sets

There will be six graded problem sets. Homework is due via Canvas and may have a
separate written component. Problems will be posted on Canvas at least one week
before the due date. You will get long problem sets with a varying degree of difficulty in
questions, whose purpose is to make you think about economic theories and applications.
You will get both theoretical and empirical questions. Some problem sets are fairly long:
prepare to spend time on them.

Each problem set will be worth 40 points, giving you the possibility of accumulating 240
points across six problem sets. The moment you accumulate 200 points, you will get the
full 20% grade for the homework. For example, if you solve 3/4 of the questions in HW1,
submit it by the deadline. You’ll accumulate 30 points (3/4 of 40) towards your goal of
200.

Any score below 200 will be prorated. Ex: 150 points will give you 15%, any score above
200 will be capped at 20%. Ex: 210 points will still give you 20% towards your final grade.
You may not redistribute excess homework score towards other parts of the grading.

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Because of this flexibility, late submissions are NEVER accepted, and we will not regrade
homework questions, unless a glitch appears in the software that affects everyone. If you
can’t access the homework, you have to solve that problem in advance to be able to
submit your homework in a timely manner. Please do not send the professors or TAs
screenshots of why you couldn’t access the website, etc.

Class Participation

10% of the final grade will be based on class participation. Participating in all lectures will
grant students the full class participation grade. Participation does not mean just
attending the lecture but also to be an active member of the class – answering live poll
questions, asking questions in class, and submit in-class exercises. If something prevents
you from attending any specific lecture, you should email the professor in advance.

Global Analysis Project

The Global Analysis Project (GAP) is a group assignment promoting teamwork and
communication, near the end of the semester. A list of important economic events will be
provided to you and once you submit your choice of team members, you will choose your
economic event.

4. How to Study

• Before class: Read required readings.

• After class: Re-read your notes within 24 hours to make sure you understood the
lecture. You are encouraged to read the book chapters of the material we covered
in class. Post questions via Ed Discussion on topics that need additional
clarification. Reading and answering other students’ questions is a great way to
deepen your knowledge on class material. You can work in groups on the problem
sets, but make sure that you spend time by yourself before you meet your study
partners. Even if you prefer to work on your assignments in groups, every
problem set must be individually written and submitted.

• On a weekly basis: Attend recitations and office hours. Weekly recitations will be
crucial in preparing you for exams.

• Throughout the semester: Make it a habit to follow economic & financial news.

• In Finance 1010, you’ll have to do a lot of reading/studying on your own. Prepare

to spend time on this class.

5. Whom to Contact / Additional Resources

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• To join a section or change sections or waitlists: Stacy Franks is the Undergraduate
Coordinator in the Finance department (stacyf@wharton.upenn.edu). You can also
email fnce-courses@wharton.upenn.edu (emailing the professor only delays the
department’s response).

• For problems relating to access to Canvas: Go to

http://www.library.upenn.edu/courseware/ and click “Support for Students”.

• For MyEconLab software/technology related questions: the Pearson Help Center: 800-
677-6337.

• For class material (problems, math, graphing, concepts): Contact a Finance 101 TA
during office hours or recitations. Attend office hours. Attending office hours and
being present and asking questions in class are the best ways to learn. Sending emails
about graphs or mathematical material or general concepts is not the best way to learn.

• Special needs/arrangements: Reasonable accommodation will be made for those with

special needs. Please contact Student Disability Services (SDS) and Prof. Bornstein.

6. Policies
a. Late/missed work

No late problem set submission is accepted. No make-up for problem sets will be
provided. No extra credit assignments for missed homework will be provided.

b. Regrading requests

Every exam will have its own grading policy published on Canvas for maximum
transparency. Check your grading scheme against the policy. For the exams, requests
must be made within one week from the date that the exam is returned (whether or not
you actually pick up your exam on that date).

For each part of the exam that you think was incorrectly graded, give a written
explanation of your view: The written explanation should detail why your grading is
inconsistent with the policy. You must submit the entire exam for a regrade. Your score
can go down or up as a result of regrading.

c. Integrity.

Penn has a clear Code of Academic Integrity. It’s your responsibility to familiarize
yourself with the code, and to follow it to the letter:
http://www.upenn.edu/provost/PennBook/academic_integrity_code_of

d. Fairness

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All rules in this class, including those of attendance and grading implicitly involve
flexibilities, and furthermore, these flexibilities are equally applied to everyone. No one
will be punished for being busy or sick for a few times during the semester. Because of
this embedded flexibility, further pleas for exceptions or extensions will not be
entertained. Use this flexibility wisely: Keep them for a true emergency, so that should
an unforeseen event occur, you do not have to think about Finance 101.

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 CLASS SCHEDULE
Week Lecture Date Topic ABC Chapter
1 1 12-Jan Introduction and Overview of FNCE 101
2 2 17-Jan Measuring Economic Activity 2.1-2.2
2 3 19-Jan Price Indices and Inflation 2.4-2.5
3 4 24-Jan Aggregate Production and Labor Demand 3.1-3.2
3 5 26-Jan Labor Supply, Labor Market Equilibrium, and Unemployment 3.3-3.6
4 6 31-Jan Consumption-savings decision 4.1
4 7 2-Feb Investment and Goods Market Equilibrium 4.2-4.3
5 8 7-Feb Money and Household Portfolio 7.1-7.2
5 9 9-Feb Money Demand and Asset Market Equilibrium 7.3-7.4
6 10 14-Feb The Fed and Monetary Policy Transmission 14.1-14.3
6 11 16-Feb Unconventional Monetary Policy Tools 14.4
7 12 21-Feb The Phillips Curve 12
7 13 23-Feb Review Session
8 14 28-Feb Midterm
8 15 2-Mar Business Cycle Facts 8.1-8.4
9 No class 7-Mar No class (spring break)
9 No class 9-Mar No class (spring break)
10 16 14-Mar Setting Up the IS-LM Model 9.1-9.3
10 17 16-Mar Equilibrium, Analysis, AD-AS 9.4-9.6
11 18 21-Mar Real Business Cycles 10.1-10.3
11 19 23-Mar Price Rigidities and Monetary Policy 11
12 20 28-Mar Liquidity Trap and Review of Closed Economy Macro
12 21 30-Mar Open Economy: Introduction and Balance of Payments 5.1-5.4
13 22 4-Apr Exchange Rates Determination 13.1-13.2
13 23 6-Apr The Mundell-Fleming Model (IS-LM Open Economy) 13.3
14 24 11-Apr The Mundell-Fleming Model (IS-LM Open Economy) 13.4-13.5
14 25 13-Apr Financial Crises
15 26 18-Apr Global Analysis Project Presentations
15 27 20-Apr Global Analysis Project Presentations
28 25-Apr Review Session

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 Homework Information

Problem sets are completed on the Canvas website.

• You can work on the assignment and save your progress, but you must submit before
the due date.
• You may work together for the homework, but everyone needs to submit their own
copy.
• After submitting the homework, you will immediately get your grade and see which
questions you got right. You will have a second attempt to submit answers to the
questions in which you were wrong. If you get the right answer on the second attempt,
you will obtain ½ credit for that question.
• Late homework is not accepted.

Due Date
Coverage All homework due at 9 am
HW 1 Chapters 2,3 01/30
HW 2 Chapters 4,7 02/13
HW 3 Chapters 12,14 02/27
HW 4 Chapters 8,9 03/20
HW 5 Chapters 10,11 04/03
HW 6 Chapters 5,13 04/17

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 Global Analysis Project

The goal of the Global Analysis Project (GAP) is to use the economic models learned in
class to provide an analysis of the causes and consequences of real economic events both
in the US and across different countries. A list of economic events will be provided by the
professors and the groups of five will choose one of these events.

The GAP consists of a 7-minute presentation + 3-minute Q&A that will be presented live
to the class towards the end of the semester. The presentation contains:

• Economic background: economic background on the country’s economy and the

context of the economic event.
• Analysis: description of the unfolding of the event. This section should include
an analysis based on the tools and models learned in the class.
• Policy: discussion of policy proposals to address the economic event. This section
should also analyze policies which were implemented during the event.

You should work on the GAP in groups of six students.

We will discuss in more details the exact format of the GAP later in the semester.

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