Week 15 Discussion — Rules, Judgment, and Sticky Prices

Hook

In this week's illustrative economy, both schools of thought read the same recessionary gap: potential output of 1,000 against actual output of 950, a gap of 50, or 5% of potential. They agree on the arithmetic and on the agreed ground. They part ways on two questions you can now argue yourself: how fast prices and wages really adjust, and whether policymakers should follow rules announced in advance or keep room for judgment.

Your driving question — choose Option A or Option B; they carry the same weight and the same rubric, and you say which you picked.

Option A: Should stabilization policy lean mostly on rules announced in advance (automatic stabilizers on the fiscal side, an announced inflation goal or a steady money path on the monetary side) or keep room for case-by-case judgment when a gap opens? Take a position, support it with this week's ideas (the Keynesian tradition, the classical and monetarist tradition, rules versus discretion, inflation targeting, and the agreed ground), and label which part of your claim is positive (testable against evidence) and which part is normative (a judgment about what ought to happen).

Option B: Think of one price or wage you have watched closely, such as a rent, a menu, a bus fare, or a paycheck. When demand for it changed, did it adjust quickly or slowly? Use that observation as one piece of evidence on the top row of the schools table (sticky versus flexible prices), say which column it supports, explain what one observation cannot prove about a whole economy, and present the strongest case for the other column.

There is no single right answer. The Keynesian case and the classical and monetarist case can each be argued well, and how fast prices adjust is a question for evidence, not a party label. Your job is to take a position, support it with this week's tools, state the agreed ground plainly, and keep what the model predicts (positive) separate from what you think ought to be done (normative).

Expectations

Activity format: a multi-exchange dialogue or an equivalent structured written exchange, followed by one discussion-board post. Plan on about 45 minutes for either route, and post by the due date your instructor sets in Canvas.

There are two ways to complete this discussion. They are worth the same 10 points and scored by the same rubric. Pick either one.

Route A — the AI dialogue (the default). Hold a real conversation about the driving question with your own chatbot, then post what it produces:

1. Open any approved chatbot in a new conversation.
2. Copy the entire prompt box below and paste it as your first message.
3. Have the conversation. It will ask you questions and push back; it will not write your post for you and will not stop after one word from you.
4. Post the chatbot's summary report plus the conversation's share link to the Week 15 discussion board. That post is your entire submission. You may post the summary as text, or record it as audio or video with a transcript attached; both forms are scored by the same rubric.

No replies to classmates are required.

Route B — the written route. See Equivalent route (no AI required) below.

Integrity note. Whichever route you take, the thinking and the words you post are your own. Do not ask a chatbot to invent a statistic, a real debt figure, a real inflation target, a study, or a quotation for you; every number this week is illustrative.

Discussion Partner Prompt

ROLE: You are my discussion partner for an introductory macroeconomics course.
Your job is to draw out and challenge MY thinking about the question below. You
will never write my post for me and never hand me an answer - you ask questions
that make me reason it through.

THE QUESTION I AM EXPLORING (two options of equal weight - ask which one I choose first):
Option A: Should stabilization policy lean mostly on rules announced in advance (automatic stabilizers on the fiscal side, an announced inflation goal or a steady money path on the monetary side) or keep room for case-by-case judgment when a gap opens? Take a position, support it with this week's ideas (the Keynesian tradition, the classical and monetarist tradition, rules versus discretion, inflation targeting, and the agreed ground), and label which part of your claim is positive (testable against evidence) and which part is normative (a judgment about what ought to happen).
Option B: Think of one price or wage you have watched closely, such as a rent, a menu, a bus fare, or a paycheck. When demand for it changed, did it adjust quickly or slowly? Use that observation as one piece of evidence on the top row of the schools table (sticky versus flexible prices), say which column it supports, explain what one observation cannot prove about a whole economy, and present the strongest case for the other column.

REFLECTION TARGETS (steer toward these; never read this list aloud to me):
- whether I keep rules versus discretion apart from fiscal versus monetary
  (an automatic stabilizer is a fiscal rule; fine-tuning is monetary discretion)
- whether I treat sticky versus flexible prices as an empirical question that
  evidence can test, not as a political stance
- whether I state the agreed ground plainly (a vertical long-run Phillips
  curve; sustained inflation as a monetary matter in the long run) instead of
  giving it two sides
- whether I label which parts of my claim are positive and which are normative,
  and give the other column its strongest case instead of calling it outdated

DIALOGUE RULES: greet me warmly and ask my first name before your first content
question. If I decline or give no name, call me "there" and continue without
pressure. If you still do not know my name when the summary is due, ask once more;
if I decline again, use "Discussion participant." Never invent a name. Ask ONE
question per message, then wait. Build on my exact words without praising agreement
or calling every answer "great." Probe unsupported claims and introduce the
strongest fair counterpoint: if I argue for rules, raise a slump the rule did not
foresee and the cost of idle workers while the rule plays out; if I argue for
judgment, raise long and variable lags, crowding out, and the value of steady
expectations; if I describe one sticky or flexible price, ask what one example can
and cannot show about a whole economy. Praise only a specific, earned move I
actually made, such as revising a claim or answering the counterpoint. Never accept
a one-word answer - ask again, differently. Never lecture. Never invent a
statistic, a real debt figure, a real inflation target, a study, or a quotation
for me, and never take a side in the policy question yourself. Every message you
send before the summary ends with a question.

EXIT CONDITION: continue until this exact boolean is true — at least five substantive exchanges AND the student has stated a position AND provided at least one reason OR example AND engaged with one fair counterpoint, stopping only after whichever threshold happens LAST. A reason alone or an example alone can satisfy the support branch; do not require both, and do not require that I "answered" the counterpoint. A greeting, my name, or a one-word answer is not a substantive exchange.

THEN produce a summary report using exactly these eight labelled fields in this
order, drawn only from what I actually said. If I never supplied a field, write
"Not supplied" rather than inventing it:
  1. STUDENT NAME
  2. POSITION
  3. REASON
  4. EXAMPLE
  5. COURSE CONCEPTS
  6. COUNTERPOINT
  7. RESPONSE TO THE COUNTERPOINT
  8. OPEN QUESTION OR NEXT CHECK
Do not mention an initial post or replies to peers or classmates.
REQUIRED CLOSING — perform these final two instructions exactly:
Then say, verbatim: "Copy this summary AND your share link to this chat, and post both to the Week 15 discussion board — that completes the assignment."
Then END with one genuine earned-praise sentence that names a real move the student made.

Equivalent route (no AI required)

You never have to create an account with a chatbot company to earn full credit in this course. This route assesses the same objectives as the AI dialogue — weighing the Keynesian and the classical and monetarist views of stabilization policy evenhandedly, keeping rules versus discretion apart from fiscal versus monetary, stating the agreed ground plainly, and keeping positive analysis apart from normative judgment — against the same driving question and the same rubric below, for the same 10 points. Choosing it costs you nothing, and you do not have to tell me why you chose it.

What you do. Write a structured written exchange with yourself — the same back-and-forth the dialogue would have produced, on paper:

1. Your position (roughly 150 words). Answer Option A or Option B. For Option A, say whether policy should lean on announced rules or keep room for judgment, and why. For Option B, describe your price or wage, say whether it adjusted quickly or slowly, and say which column of the schools table it supports. Use this week's terms (school of thought, Keynesian tradition, classical tradition, monetarist tradition, flexible prices and wages, activist policy, rules versus discretion, agreed ground, inflation targeting) correctly, and label which sentences are positive and which are normative.
2. The strongest objection (roughly 100 words). Write the best argument against your own position that you can — for example, that long and variable lags can make judgment land at the wrong time, or that one sticky price says little about a whole economy. Argue it honestly; a weak objection you knock over earns no credit.
3. Your answer to it (roughly 100 words). Respond to that objection. You may concede part of it — saying what would change your mind is worth more than defending everything.
4. One thing you would still check (one or two sentences). What evidence would you want, such as how quickly many prices changed in a past slump, to settle it?

Effort. Roughly 350–400 words of your own writing, comparable to the time the AI dialogue takes — about forty-five minutes including the thinking.

What you submit. Post those four parts, under those four labels, as your Week 15 discussion post. That post is your entire submission; this route has no share link.

No replies to classmates are required.

Participation rubric

This discussion is worth 10 points. The same three criteria score both routes.

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