Department
of Economics, Emory University
Syllabus
for Macroeconomic Theory II (E511)
Spring,
2009
Instructor: Stefan Krause (skrause@emory.edu)
Classroom: Rich 107; Mon-Thu 10:00am-12:00pm
Phone: 404-727-2944
Prerequisites
Graduate standing or permission of the instructor. This is
one
of the core courses of the economics graduate
program.
Suggested Textbooks
Advanced
Macroeconomics by D. Romer, Third Edition, 2006.
Lectures on Macroeconomics by O. Blanchard and S. Fischer,
1989.
Elements of Dynamic Optimization by A. Chiang,
1992.
There will also be assigned readings from journal articles and
survey
papers. Required readings are marked by a (*) and will be
available
either electronically (http://userwww.service.emory.edu/~skrause/E511/)
or in hard copy.
Grading
- 1st exam (Units I & II - Monday, March 2nd, 10:00
AM)
|
40% |
| - 2nd exam (Units III, IV & V - Monday, May 4th,
10:00 AM) |
40% |
| - 2 homeworks (10% each) |
20% |
| - Total |
100% |
Course Schedule
I. Unemployment and economic
activity
fluctuations (3 sessions:
February 9th – February 11th)
Topics:
1. Economic
fluctuations
2. Unemployment and efficiency wages
Readings:
Romer, Chapter 9 (*)
Cecchetti, Stephen G., Alfonso Flores-Lagunes and Stefan
Krause,
"Assessing the Sources of
Changes in the Volatility of Real Growth", The Changing Nature of the Business Cycle,
edited by C. Kent and D. Norman (October 2005), pp. 115-138.
(*)
Shapiro, Carl and Joseph Stiglitz, “Equilibrium
Unemployment as a
Worker Discipline Force”, American
Economic Review, June 1984, pp. 433-444. (*)
Lucas, Robert, “Some International
Evidence on
Output-Inflation
Tradeoffs”, American
Economic Review, June 1973, pp. 326-334.
II. Macroeconomic Policy (5 sessions: February 12th - February 19th)
Topics:
1. Political economics and macroeconomic policy
2. Time (in)consistency and optimal monetary
policy
3. Monetary policy rules
Readings:
Romer, Chapter 10 (*)
Persson, Thorsten and Guido Tabellini, “Political
Economics and
Macroeconomic Policy”, Handbook
of
Macroeconomics, Volume 1, edited by J. B. Taylor and M.
Woodford, 1999, pp. 1397-1482. (*)
Taylor, John B., “Discretion
Versus Policy Rules in Practice”, Carnegie-Rochester
Conference Series on
Public Policy, 39, 1993, pp. 195-214. (*)
Kydland, Finn and Edward Prescott, “Rules
Rather than Discretion: The
Inconsistency of Optimal Plans”, Journal
of Political Economy, June 1977, pp. 473-492.
Fuhrer, Jeffery, “Inflation/Output Variance Trade-Offs and Optimal
Monetary Policy”, Journal of Money,
Credit and Banking, April 1997, pp. 214-234.
Rudebusch, Glenn D. and Lars E. O. Svensson, “Policy
Rules for
Inflation Targeting”, Monetary
Policy Rules, edited by J. B. Taylor, University of Chicago
Press, Chicago, 1999, pp. 203-246.
Applied Sessions and Review for
Units I & II (February 24th &
February 26th)
1st Exam:
Monday, March 2nd (at 10:00am, in classroom:
Rich 107)
III. Theory of Economic Growth (6
sessions: April 6th – April 14th)
Topics:
1.
Ramsey-Cass-Koopman’s growth
model
2. Endogenous growth models
Readings:
Chiang, Chapter 7 (*)
Romer, Chapter 2 (*)
Rebelo, Sergio, “Long
Run Policy Analysis and Long Run Growth”, Journal of Political Economy,
June
1991, pp. 500-521. (*)
Aghion, Phillipe and Peter Howitt, “A
Model of Growth through Creative
Destruction”, Econometrica,
March 1992, pp. 323-352.
Barro, Robert J. and Xavier Sala-i-Martin, “Convergence”,
Journal of Political Economy,
April
1992, pp. 223-251.
Islam, Nazrul, “Growth Empirics: A Panel Data Approach”, Quarterly Journal of Economics,
November
1995, pp. 1127-1170.
Lucas, Robert, “On the Mechanics of Economic Development”, Journal of Monetary Economics, July
1988, pp. 3-42.
Romer, Paul, “Increasing Returns and Long-Run Growth”, Journal of Political Economics,
October 1986, pp. 1002-1037.
IV. Consumption (3 sessions: April
15th – April 20th)
Topics:
1.
Consumption under uncertainty
2. The CAPM model
Readings:
Romer, Chapter 7 (*)
Hall, Robert, “Stochastic
Implications of the Life Cycle-Permanent
Income Hypothesis: Theory and Evidence”, Journal of Political Economy,
December 1978, pp. 971-987. (*)
Mehra, Rajnish and Edward Prescott, “The
Equity Premium: A Puzzle”, Journal
of Monetary Economics,
March 1985, pp. 145-162.
Zeldes, Stephen P., “Optimal Consumption
with
Stochastic Income:
Deviations from Certainty Equivalence”, Quarterly Journal of Economics, May
1989, pp. 275-298.
Attanasio, Orazio, “Consumption”, Handbook
of Macroeconomics, Volume 1, edited by J. B. Taylor and M.
Woodford, 1999, pp. 741-812.
Cochrane, John, “A Simple Test of Consumption Insurance”, Journal of Political Economy,
October 1991, pp. 957-976.
V. Investment (3 sessions:
April 21st – April 23rd)
Topics:
1.
Investment with adjustment costs
2. Inventory investment
Readings:
Romer, Chapter 8 (*)
Blanchard and Fisher, Chapter 6 (*)
Caballero, Ricardo “Aggregate Investment”, Handbook of Macroeconomics, Volume
1, edited by J. B. Taylor and M. Woodford, 1999, pp. 813-862.
Applied Sessions and Review for
Units III, IV & V (April 28th &
April 30th)
2nd Exam:
Monday, May 4th (at 10:00am, in Library: Rich
329A)