Makro-Pic Advanced Macroeconomics

Tuesday and Thursday 12:45 - 14:15 in I-063
Lecture number: 173220
Main text: David Romer, 2012, Advanced Macroeconomics, 4e, McGraw-Hill
Course material for participants is available at the course material webpage.

Course Plan

Theme 1: Growth

1. Introduction - The Solow Growth Model

Reference: Romer Chapter 1

2. Solow Growth Model: Extensions: Education and Capital Mobility

References: Mankiw, N.G., D. Romer, and D.N. Weil, 1992, A contribution to the empirics of economic growth, Quarterly Journal of Economics 107, 407-437.
Lucas, R.E., 1990, Why Doesn`t Capital Flow from Rich to Poor Countries?, American Economic Review 80, 92-96.

3. The Ramsey Growth Model

Reference: Romer Chapter 2A.

4. Overlapping Generations: The Diamond Growth Model

Reference: Romer Chapter 2B.

5. Endogenous Technical Progress: The Romer Growth Model

Reference: Paul Romer, 1990, Endogenous Technological Change, Journal of Political Economy 98, S71-S102

6. The Scale Effect, the Jones Model, and Growth in the Very Long Run

References: Michael Kremer, 1993, Population Growth and Technological Change: One Million B.C. to 1990, Quarterly Journal of Economics 108, 681-716.
Romer 126-131.

7. Unified Growth Theory

Reference: Holger Strulik and Jacob Weisdorf, 2008, Population, Food, and Knowledge: A Simple Unified Growth Theory, Journal of Economic Growth 13, 169-194.

Theme 2: Real Business Cycles

8. Stylized Facts about Business Cycles and the Simplest RBC model

Reference: Romer Chapter 4.1-4.5.

9. The General Real Business Cycle Model

Reference: Romer Chapter 4.6-4.10.

Theme 3: New Keynesian Economics

10. Price and Wage Rigidity

Reference: Romer Chapter 6.1-6.4.

11. Monopolistic Competition and Menu Costs

Reference: Romer Chapter 6.5.-6.8.

12. The Lucas Imperfect Information Model

Reference: Romer Chapter 6.9.

13. DSGE Models of Fluctuations

Reference: Romer Chapter 7.1.-7.2.,7.4., 7.8.-7.9

Theme 4: Unemployment

14. Efficieny Wages

Reference: Romer Chapter 9.1-9.3.

15. The Shapiro-Stiglitz Model

Reference: Romer Chapter 9.4.

16. Search and Matching

Reference: Romer Chapter 9.8-9.9.

17. Trade Unions and Unemployment

References: McDonald, I.M. and R.M. Solow, 1981, Wage bargaining and employment, American Economic Review 71, 896-908;
Nickel and Andrews, 1983, Union, real wage, and employment in Britain 1951-79, Oxford Economic Papers 35, 183-206;
Lindbeck, A. and D. Snower, 1988, Cooperation, harassment and involuntary unemployment: an insider-outsider approach, American Economic Review 78, 167-188.

Theme 5: Consumption

18. The Permanent Income Hypothesis

Reference: Romer Chapter 7.1-7.3.

19. Risk Aversion and Prudence

Reference: Louis Eeckhoudt, Christian Gollier, Harry Schlesinger, 2005, Economic and Financial Decisions under Risk, Princeton University Press, Ch.1.

20. Liquidity Constraints and the Equity Premium Puzzle

Reference: Romer Chapter 7.1-7.3.

Theme 6: Investment

Theme 7: Monetary Policy

Theme 8: Fiscal Policy