In June 2006, the Dean here at Wisconsin School of Business at the University of Wisconsin-Madison, Mike Knetter, asked me to teach a five-week segment on macroeconomics to the first-year full-time MBA students. After some thought, I decided on three goals for the course.

First, I wanted to teach what I considered to be the essential components of modern macroeconomics. This includes, at a minimum: the theory of firms and long-term growth implications; the theory of households and asset-pricing implications; the availability and history of the macroeconomic data on which these theories are based and tested; and then, if time permitted, trade, business cycles, and monetary policy. I figured that if the MBAs were exposed to what I considered essential macroeconomics, they would not confuse daily changes in stock prices with true macroeconomic phenomena.

Second, I wanted to emphasize the ideas generally agreed upon by academic macroeconomists, for example the nature of aggregate production and growth. At the same time, I wanted to downplay or ignore areas of research that are hotly contested, such as the efficacy (or lack thereof) of monetary policy at stabilizing the business cycle.

Third, I wanted the course to be mathematically rigorous but accessible with some modest effort. There are a few reasons for the rigor. A bit of mathematics allows key ideas to be taught quickly and precisely. Also, students studying for a Masters degree should be held to a higher standard than students taking an undergraduate intro course.