Year of entry: 2020
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Course unit details:
|Unit level||FHEQ level 7 – master's degree or fourth year of an integrated master's degree|
|Teaching period(s)||Semester 1|
|Available as a free choice unit?||Yes|
The aim of this course is to provide a solid introduction to macroeconomic analysis. Our focus will be on the models and methods that form the core of modern macroeconomics. The goal is to provide students with an understanding of what macroeconomics is about, and how macroeconomists approach policy problems. Topics include economic growth, business cycles, consumption and saving, labor markets, inflation, monetary policy, and fiscal policy. An additional aim of this course is to help students learn to read and summarise original research articles. You will be required to read four articles during the semester. We will discuss these articles in class.
The goal is to provide students with an understanding of what macroeconomics is about, and how macroeconomists approach policy problems. Topics include economic growth, business cycles, consumption and saving, labour markets, inflation, monetary policy, and fiscal policy. An additional aim of this course is to help students learn to read and summarise original research articles. You will be required to read four articles during the semester. We will discuss these articles in class.
Lecture 1, Week 1 The Solow growth model
Readings: Romer 1.1 - 1.7
Lecture 2, Week 2 The Ramsey-Cass-Koopmans model.
Readings: Romer 2.1 - 2.6 Additional reading: Lucas “Why Doesn't Capital Flow from Rich to Poor Countries?” American Economic Review
Lecture 3 Week 3 Endogenous Growth
Readings: Romer 3.1 – 3.8. Additional reading: Galor, Oded. "From stagnation to growth: unified growth theory." Handbook of economic growth volume 1 (2005): 171-293.
Lecture 4 Week 4 The baseline Real Business Cycle model
Readings: Romer 5.1 – 5.10. Additional reading: King and Rebelo, Chapter 14 “Resuscitating real business cycles”, Handbook of Macroeconomics, Volume 1, 1999, Pages 927-1007
Lecture 5 Week 5 Consumption Dynamics.
Readings: Romer 8.1 - 8.6 (including the empirical application) Additional readings: Carroll et al. “The Distribution of Wealth and the MPC: Implications of New European Data” American Economic Review Papers and Proceedings, 2014; Kaplan, G., & Weidner, J., “The Wealthy Hand-to-Mouth”. Brookings Papers on Economic Activity, 2014.
Lecture 6 Week 6 The New Keynesian model, part I
Readings: Romer 6.1, 6.5 - 6.7, 6.9
Lecture 7 Week 7 The New Keynesian model, part II
Readings: Romer 7.1, 7.4, 7.8 - 7.9. Additional reading: Gertler, Gali & Clarida, 1999 "The Science of Monetary Policy: A New Keynesian Perspective," Journal of Economic Literature vol. 37(4), pages 1661-1707, December.
Lecture 8 Week 8 Inflation and monetary policy.
Readings: Romer 12.1, 12.4 - 12.5, 12.7 - 12.10.
Lecture 9 Week 9 Budget deficits and fiscal policy.
Readings: Romer 13.1 - 13., 13.7-8. Additional reading: Talvi - Végh (JDE, 2005), “Tax Base Variability and Procyclical Fiscal Policy in Developing Countries”
Note: the last tutorial will be a review class.
Teaching and learning methods
Lectures and Tutorials
70% Final Exam in January 2020 and 30% Mid term test.
David Romer: Advanced Macroeconomics, 5th edition, McGraw Hill, 2018
Other occasionally useful texts:
Galí: Monetary policy, inflation, and the business cycle: an introduction to the new Keynesian framework and its applications. Second edition, Princeton University Press, 2015
Ljungqvist and Sargent: Recursive Macroeconomic Theory, 4th edition, MIT press, 2018
Walsh: Monetary theory and policy. 4th edition, MIT press, 2017
Wickens: Macroeconomic theory: a dynamic general equilibrium approach. 2nd edition, Princeton University Press, 2012
|Scheduled activity hours|
|Independent study hours|
|Nuno Palma||Unit coordinator|
Lecture - Thursday 11 - 1pm
Tutorial - Tuesday 10 - 11am