Intermediate Macroeconomics
Fall 2013
Jeffrey Parker
Course Outline and Reading List
Note: Dates shown below are a rational forecast of our progress in the course. Depending on our actual progress, exams and assignment dues dates may change.
Readings with authors listed in bold face are required. Those in regular type are additional readings that may be read by those with strong interests in the subject. Additional readings maybe added as the course progresses. Be sure to check the Web site regularly in order to keep up with any changes; don't just print this page at the beginning of the course and rely on that for the entire semester.
Course Outline (Links)
1. Introduction to macro; measurement of macro variables
2. Economic growth
3. Equilibrium in the long run
4. Expenditures in the short run
5. Money and short-run equilibrium in a closed economy
6. Short-run equilibrium in an open economy
7. Aggregate supply and the Phillips curve
8. Asset markets and exchange rates
9. Macroeconomic policy
1. Introduction to Macro; Measurement of Macro Variables
September 4: Introduction. No reading assigned.
September 6 and 9: Macroeconomic Variables
- Burda, Michael, and Charles Wyplosz, Macroeconomics: A European Text, 6th ed., Oxford University Press, 2013, Chapters 1 and 2.
- Easterlin, Richard A. 2001. Income and Happiness: Towards a Unified Theory. Economic Journal 111 (473), 465-484.
- Henderson, J. Vernon, Adam Storeygard, and David N. Weil. 2012. Measuring Economic Growth from Outer Space. American Economic Review 102 (2):994-1028.
- Frey, Bruno S. 2008. Happiness: A Revolution in Economics. Cambridge, Mass.: MIT Press. (A comprehensive overview of the happiness literature.)
- Boskin, Michael J., Ellen R. Dulberger, Robert J. Gordon, Zvi Griliches, and Dale W. Jorgenson. 1997. The CPI Commission: Findings and Recommendations. American Economic Review 87 (2):78-83. (This paper will be read for Homework #1.)
- Summers, Robert, and Alan Heston. 1991. The Penn World Table (Mark 5): An Expanded Set of International Comparisons, 1950-1988. Quarterly Journal of Economics 106 (2):327-68. (A summary of the most widely used set of international data on GDP. Current update of dataset is available at http://pwt.econ.upenn.edu/).
2. Economic Growth
September 11 and 13: Solow Growth Model
- Burda and Wyplosz, Chapter 3.
September 16 and 18: Convergence and Endogenous Growth
- Burda and Wyplosz, Chapter 4.
- Sala-i-Martin, Xavier. 1997. I Just Ran Two Million Regressions. American Economic Review 87 (2):178-83.
- Romer, Paul M. 1994. The Origins of Endogenous Growth. Journal of Economic Perspectives 8 (1):3-22.
Problem Set #1: Due September 20
3. Equilibrium in the Long Run
September 20, 23, and 25: The Aggregate Labor Market and Unemployment
- Burda and Wyplosz, Chapter 5.
- Ritter, Joseph A., and Lowell J. Taylor. 1997. Economic Models of Employee Motivation. Federal Reserve Bank of St. Louis Review 79 (5):3-21.
- Rocheteau, Guillaume. 2006. Understanding Unemployment. Federal Reserve Bank of Cleveland Economic Commentary, October 15.
- Nickell, Stephen, Luca Nunziata, and Wolfgang Ochel. 2005. Unemployment in the OECD since the 1960s: What Do We Know? Economic Journal 115 (500):1-27.
September 27 and 30: Money and Prices in the Long Run
- Burda and Wyplosz, Chapter 6.
Problem Set #2: Due October 4
4. Expenditures in the Short Run
October 2 and 4: Budget Constraints
- Burda and Wyplosz, Chapter 7.
- Barro, Robert J. 1974. Are Government Bonds Net Wealth? Journal of Political Economy 82 (6):1095-1117. (The original exposition of the Ricardian Equivalence Theorem.)
October 7 and 9: Consumption and Investment Spending
- Burda and Wyplosz, Chapter 8.
- Keynes, John Maynard. 1936. The General Theory of Employment, Interest and Money. New York: Harcourt, Brace, Chapters 8-12.
- Friedman, Milton. 1957. A Theory of the Consumption Function. Princeton, N.J.: Princeton University Press. (The original exposition of the permanent-income hypothesis.)
- Ando, Albert, and Franco Modigliani. 1963. The Life-Cycle Hypothesis of Saving: Aggregate Implications and Tests. American Economic Review 53 (1):55-84.
5. Money and Short-Run Equilibrium in a Closed Economy
October 11 and 14: Money and Monetary Policy
- Burda and Wyplosz, Chapter 9.
- O'Brien, Yueh-Yun C. 2007. Measurement of Monetary Aggregates across Countries. Washington, D.C.: Board of Governors of the Federal Reserve System, Finance and Economics Discussion Series, No. 2007-2. (Look at this to get an idea of how money is measured in many countries.)
October 16: Review and Catch Up
October 18: Mid-Term Exam
5. Money and Short-Run Equilibrium in a Closed Economy (continued)
October 28 and 30: Demand-Side Short-Run Equilibrium
- Burda and Wyplosz, Chapter 10.
6. Short-Run Equilibrium in an Open Economy
November 1, 4, and 6: Open-Economy Models
- Burda and Wyplosz, Chapter 11.
7. Aggregate Supply and the Phillips Curve
November 8 and 11: Aggregate Supply in the Closed Economy
- Burda and Wyplosz, Chapter 12.
- Phillips, A.W. 1958. The Relation between Unemployment and the Rate of Change of Money Wage Rates in the United Kingdom, 1961-1957. Economica 15 (99):283-299.
- Friedman, Milton. 1968. The Role of Monetary Policy. American Economic Review 58 (1):1-17.
November 13 and 15: Aggregate Supply and Demand in the Open Economy
- Burda and Wyplosz, Chapter 13.
8. Asset Markets and Exchange Rates
November 18 and 20: Asset Markets
- Burda and Wyplosz, Chapter 14.
November 22: Exchange Rates
- Burda and Wyplosz, Chapter 15.
9. Macroeconomic Policy
November 25: Demand-Side Stabilization Policies
- Burda and Wyplosz, Chapter 16.
November 27 and December 2: Fiscal Policy, Deficits, and Debt
- Burda and Wyplosz, Chapter 17.
- Sargent, Thomas J. 1982. The Ends of Four Big Inflations. In Inflation: Causes and Effects, ed. by R. E. Hall, Chicago: National Bureau of Economic Research and University of Chicago Press.
December 4: Growth Policies
- Burda and Wyplosz, Chapter 18.
December 6: The International Monetary System
- Burda and Wyplosz, Chapter 19.
December 9 and 11: The Great Recession and the Euro Crisis
- Readings to be announced.