Oberlin College
Economics 351: Macroeconomic Theory Alberto Ortiz Fall 2010 Schedule: Tuesday and Thursday 1:15 pm - 2:45 pm, King 337. O¢ ce Hours: Tuesday 11:00 am - 12:30 pm, Thursday 3:00 pm - 4:30 pm and by appointment. Contact: O¢ ce: 225 Rice Hall E-mail :
[email protected] O¢ ce: (440) 775-8449 Cell: (617) 529-9624 Course Web Page: The class material (syllabus, notes, announcements, problem sets and additional readings) will be posted on Blackboard. Course Overview: This course explores theoretical and empirical issues on macroeconomics relevant for research and policy analysis. Topics include economic growth, consumption and savings, investment, real business cycles, nominal and …nancial frictions and monetary policy. In addition, the course will o¤er an introduction to dynamic optimization methods and to techniques to compute dynamic general equilibrium models. Prerequisite: Economics 251 (Intermediate Macroeconomics), Economics 253 (Intermediate Microeconomics) and Mathematics 133 (Calculus I) Readings: The primary reference text is: David Romer, 2006. Advanced Macroeconomics. 3rd edition, McGrawHill Irving. (ISBN-13: 978-0-07-287730-4) In addition we will discuss journal articles and selected chapters from the following books that should be on reserve at Mudd library: Olivier Blanchard and Stanley Fischer, 1989. Lectures on Macroeconomics. MIT Press. Alpha Chiang, 1999. Elements of Dynamic Optimization. Waveland Pr Inc.
1
Additional resources: We will use the computer lab and Dynare to analyze small scale macro models. Dynare is a pre-processor and a collection of MATLAB routines which solve non-linear models with forward looking variables as those describing many dynamic macroeconomic models. You can …nd information about Dynare at http://www.dynare.org/ Attendance: Regular attendance is required for good performance in the course. You are responsible for everything covered in class. Grading: Your grade will be determined as follows: Problem Sets (30%) Midterm Exam (30%) Final Exam (40%) Class Participation: Everyone is expected to have read the material before each class and to be prepared to participate in the discussion. Problem Sets: There will be …ve to six homework assignments during the semester. The main objectives of these assignments are to help you to review the material covered in class and to introduce you to data and methods of economic analysis. Please observe the assignment deadline as late homework will be heavily penalized. Exams: The midterm exam will be held during class time on Thursday, October 21. The …nal exam is scheduled by the Registrar o¢ ce on Sunday, December 19 from 2:00 pm - 4:00 pm. Please plan your activities around exam dates because make up exams are only given in case of o¢ cially documented medical or immediate-family emergencies. I will gladly make any necessary accommodation for students with disabilities, but please discuss with me the situation at least a week before the midterm exam. Honor Code: While discussion of the course materials in groups is strongly encouraged and you may work on homework with other students, all work handed in for credit must be your own. It is your responsibility to know and understand the provisions of the Honor Code. Cases of suspected academic misconduct will not be graded and will be referred to the Student Honor Committee. Disclaimer: The contents of this syllabus and of the following outline are subject to change. All modi…cations will be posted under the course website and/or announced in class.
2
Course Outline I. Economic Growth - Acemoglu, D. 2008. Introduction to Modern Economic Growth. Princeton University Press, chapters 1 and 2. - Mankiw, G., D. Romer, and D. Weil. 1992. "On the Empirics of Economic Growth." Quarterly Journal of Economics 107(2): 407-437. - Hall, R. and C. Jones. 1999. "Why Do Some Countries Produce So Much More Output per Worker than Others?" Quarterly Journal of Economics 114(1): 83-116.
II. Consumption and Savings - Romer chapter 7 - Obstfeld, M. 1992. "Dynamic Optimization in Continuous-Time Economic Models (A Guide for the Perplexed)." Manuscript UC Berkeley. - Blanchard and Fischer chapter 2: 37-51. - Hall, R. 1978. "Stochastic Implications of the Life Cycle-Permanent Income Hypothesis: Theory and Evidence." Journal of Political Economy 86(4): 971987.
III. Investment and Interest Rates - Romer chapter 8 - Blanchard and Fischer chapter 2: 52-69. Midterm Exam October 21
IV. The Real Business Cycle Model - Romer chapter 4 - King, R. and S. Rebelo. 1999. "Resuscitating real business cycles" in Handbook of Macroeconomics, edited by J. Taylor and M. Woodford, edition 1, volume 1, chapter 14, pages 927-1007, Elsevier. - http://www.dynare.org/documentation-and-support/manual/manual.pdf/view
V. The New Keynesian Model - Romer chapter 6 - Goodfriend, M. and R. King. 1997. “The New Neoclassical Synthesis and the Role of Monetary Policy" in NBER Macroeconomics Annual, edited by B. Bernanke and J. Rotemberg, pages 231-282, MIT Press.
VI. The Conduct of Monetary Policy - Romer chapter 10 - Clarida, R., J. Galí and M. Gertler. 1999. "The Science of Monetary Policy: A New Keynesian Perspective." Journal of Economic Literature, 37(4): 1661-1707. Final Exam December 19
3
