Symposium: The Intermediate Macroeconomics Course - Current Challenges and Future Directions

Intermediate macroeconomics (macro) is a core course in the undergraduate curriculum of U.S. academic institutions that offer an economics major. ¹ Building on introductory knowledge, the course exposes students to more-formal macroeconomic models and tools, enhancing their preparedness for advanced coursework and deepening their ability to grapple with many real-world questions of interest. Can students today expect their living standards to rise over time as much as their parents’ did? What is the current outlook for the macroeconomy and the labor market into which the students will graduate? Will the Federal Reserve (Fed) raise or lower interest rates at its next meeting? Intermediate macro students can not only connect what they learn to questions like these, they can also gain a better understanding of related macroeconomic research and policy reports. These characteristics help make the course a desirable one to teach; as shown by a paper in this symposium (Hoyt et al., 2026), approximately 95% of instructors report that they enjoy teaching it.

At the same time, teaching intermediate macro presents significant challenges for instructors. Basic course-design decisions—such as how technically advanced to make the course and what topics to cover—can be formidable. Today’s professional macroeconomists and academic researchers generally work with dynamic stochastic general equilibrium (DSGE) models, whose level of complexity represents a huge leap from introductory macro models and makes them broadly inaccessible to the college sophomores and juniors who typically populate intermediate macro courses (Colander, 2018). The wide chasm between Econ 101 and DSGE models creates an expansive theoretical range within which an instructor can pitch an intermediate macro course. Additionally, when selecting topics to cover, instructors have an embarrassment of riches, because a vast number of topics are fair game for inclusion in intermediate macro. Aside from the central topics of short-run fluctuations, long-run equilibrium and long-run growth, instructors can provide in-depth treatments of the open economy, the labor market, government debt, and monetary policy regimes, to name just a few possibilities. When teaching long-run economic growth, instructors need to weigh whether and to what extent their course should cover models beyond the standard Solow Model. Moreover, because intermediate macro is closely tied to real-world applications, the treatment of specific topics often needs to evolve. For example, the Great Recession of 2007-2009 led to a fundamental change in the way the Fed implements monetary policy. Because the Fed now sets interest rates differently than it did two decades ago, intermediate macro instructors must update their treatment of Fed procedures if they want to reflect the current practice of the U.S. central bank (Ihrig & Wolla, 2022).

This symposium features four papers that shed light on the state of intermediate macro today and propose specific approaches to some of the challenges outlined above. The first paper sets the stage by reporting results from a comprehensive survey of current intermediate macro instructors. The paper includes details about a range of course characteristics as well as respondents’ perceptions about the course and its evolution. The remaining papers address specific aspects of the course. One makes a case for teaching intermediate macro at a theoretical level that is closer to the research frontier than has traditionally been the case, and it provides a roadmap for how this might be done. Another paper addresses how the Fed’s modern interest-rate setting approach can be discussed in an intermediate course, while the final contribution illustrates how theoretical models of long-run growth beyond the Solow Model can be made accessible to intermediate students.

While much has been written about specific approaches to or aspects of the intermediate macro course, comprehensive, systematic information about the course has been limited. To fill that gap, the four authors of the first paper (Gail Hoyt and Darshak Patel, both from the University of Kentucky, Emily Marshall from Denison University and Roisin O’Sullivan from Smith College) conducted a national survey of regular, full-time instructors of intermediate macro at U.S. institutions granting undergraduate degrees in economics. Their results capture responses from 202 instructors across 166 distinct institutions that provide insights into the characteristics of who teaches the course and the institutional settings in which they do so. They also document details about course content and textbook use, as well as where the course fits in the overall curriculum.

They find that most instructors enjoy a great deal of autonomy over course content, and instructors still favor traditional undergraduate models such as IS/LM and IS/MP over modern micro-founded approaches such as DSGE models. While they did not find a connection between an instructor’s years of experience and adoption of a modern, micro-founded theoretical approach, they did find that instructors with more years of experience covered a wider range of topics. Questions about how instructors viewed their theoretical approach on a mainstream/heterodox spectrum revealed a strong leaning towards a mainstream approach, with no discernable difference across instructors at liberal arts colleges compared with other types of institutions.

The survey also asked respondents about their attitudes towards and perceptions of the course. About a quarter of instructors—particularly those at public institutions and programs without STEM-designated majors—view this core, required course as a significant barrier to student progression within the economics major. A strong majority agreed or strongly agreed with the statement that the course should prepare students for the labor market, while more than a quarter felt the same way about preparing students for graduate study. There was near-universal agreement on the importance of integrating real-world examples and data into the course. Overall, the rich array of detailed results in this paper provides context for the other contributions to the symposium. The survey should also prove valuable to instructors and department administrators as they make decisions regarding their own courses and programs.

Perhaps the most provocative paper in the symposium comes from Mario Solis-Garcia from Macalester College, who argues that intermediate macro courses should eschew traditional undergraduate models in favor of those that are more similar to those taught in graduate school. He provides an outline for a sample course that includes quick introductions to basic short-run and Solow growth models, but then quickly moves to more sophisticated, two-period models that feature (for example) real business cycles or New Keynesian characteristics. His sample course also includes a static general equilibrium model with a labor-leisure tradeoff, a static labor search model, and a two-period model that illustrates the fiscal theory of the price level. Students learn how to use Python to solve many of these models numerically. To help instructors adapt these topics to intermediate courses, he cites several papers designed to make specific frontier-level approaches accessible to undergraduates.

The Solis-Garcia paper highlights one of the challenges in teaching any core economics course: students vary greatly in their economic and mathematical preparation. The feasibility of his specific proposal rests on students entering the course with a level of preparation that is not currently typical. Survey results from Hoyt et al. (2026) indicate that only 37.2% of instructors teach intermediate macro courses with at least Calculus 1 as a prerequisite, while only 8.8% of courses require students to have completed intermediate microeconomics before taking intermediate macro. This may help explain the low share of instructors (10.5%) who currently report teaching fully micro-founded models (such as DSGE) in intermediate macro.

Solis-Garcia acknowledges some of the trade-offs involved in his approach, but he argues that it would benefit students who do not take additional macroeconomic courses as well as those who are interested in economics graduate school. And while adopting his proposed approach in its entirety may now be feasible at only a small subset of institutions, the contribution constitutes a valuable resource to a much broader audience. Regardless of the degree to which instructors agree or disagree with specific arguments made by the author, the paper prompts instructors to critically examine their current approach to intermediate macro, to clarify their learning goals, and to assess how they weigh the various trade-offs associated with course design. The paper also provides valuable food for thought for department chairs and other administrators as they contemplate the structure of the economics curriculum more generally.

The Hoyt et al. (2026) survey confirmed a notable degree of inertia in how intermediate macro instructors teach monetary policy implementation: the percentage that covers open market operations is higher than the percentage that covers the administered interest rates associated with the ample or abundant reserves framework that has prevailed at the Fed for almost two decades. The next paper in the symposium, by Dean Croushore from the University of Richmond, lays out how the Fed’s current method of adjusting interest rates can be taught to intermediate students. It offers an integrated approach to teaching monetary policy that combines a daily model of the reserves market with an emphasis on the neutral real interest rate, r*, to link with the long run. Aided by his additional perspective as a textbook author, Croushore’s contribution also provides some insight into the inertial behavior of instructors in their teaching of this topic.

While targeting the federal funds rate remains the key policy approach of the Fed, the way that the Fed adjusts this rate changed in the wake of the global financial crisis. The Croushore paper provides a broad historical context, including a step-by-step outline of how the market for bank reserves and the setting of the federal funds rate evolved during the 21st century. In particular, he details the transition away from a scarce reserves framework and explains how the Fed’s payment of interest on bank reserves, begun in October 2008, now plays a central role in the monetary policy implementation process.

The paper also tackles the challenge brought about by this transition in terms of tying short-term movements in the federal funds rate to longer-term movements in inflation and output, given the absence of the traditional linkages from open market operations to the money supply via the money multiplier. To this end, Croushore focuses on the neutral short-term real interest rate, r*, which prevails when output is at its long-run equilibrium and inflation is at its target level. Students can be taught that when these conditions are not met, the Fed implements either contractionary or expansionary policy as appropriate, by setting the implied real short-term interest rate either above or below r*. The reserves model outlined in the paper shows how this is done. But the Fed must also use a long-run model to learn whether and how r* is changing in response to changes in the long-run balance between domestic saving and investment, or due to changes in the flows of capital between the United States and other countries. Croushore’s paper provides a useful roadmap for how to do so.

The final paper in the symposium, by Robert Lester from Colby College, shows how the treatment of long-run growth in intermediate macro can be expanded beyond the workhorse Solow Model. One extension he proposes goes back in time, modeling long-run growth with a Malthusian model, while the other moves forward from Solow to a model that endogenizes economic growth. Hoyt et al. (2026) report that 17.9% of their survey respondents teach the Malthusian model while almost half include endogenous growth in their intermediate macro courses. Lester’s proposal offers instructors a cohesive approach to teaching economic growth that exposes students to a comprehensive view of macroeconomic history.

Lester explains that the Malthusian model, which is no more mathematically complicated than the Solow Model, can elegantly explain why sustained long-run growth in living standards did not occur in the millennia before industrialization, when most labor was employed in agriculture. To describe the transition from Malthus to Solow, Lester outlines a simplified version of a model that shows how steadily rising population levels can transform an agrarian economy dependent on the (fixed) supply of land into one in which living standards grow over time.

Although many empirical predictions of the Solow Model are borne out in the data, the model attributes cross-country differences in living standards primarily to exogenous differences in technology. Academic economists have long sought to endogenize levels and growth rates of technology, and Lester offers several suggestions for how this work can be incorporated in intermediate courses. He also discusses the “deep causes” of growth now debated in the academic literature, including potential impacts of a country’s economic institutions, geographical position and cultural background. To implement everything Lester suggests would take about 4 weeks of class, which may not be feasible or desirable for many instructors. However, as with the other symposium papers, his proposal is not an “all or nothing” proposition. The paper serves as a concise review of major elements of the growth literature that can be adopted separately, and that will no doubt help instructors add richness to their courses.

The contributions to this symposium document how the intermediate macro course is currently taught at U.S. institutions and they provide well-motivated proposals to tackle some of the key challenges facing instructors. Together, the four papers can inform instructors and administrators alike as they contemplate this core course in the context of their own specific goals and constraints.