LECTURES IN ADVANCED MACROECONOMICS

FALL 2014.      LECTURER:    CHRISTIAN GROTH   

The course material (chapter drafts and short notes) is under revision and updating. In the form of one or two chapters each time the material will become available through the semester. You are supposed to download and print out this material.
Please, let me know of errors, confusions, and limitations in the lecture notes and exercise problems. I very much welcome comments and suggestions. Link to exercise class.

Date Topic (according to plan) Read                       Comments
        before        after
3/9 General overview of the course. The government budget, fiscal sustainability.
 		  

Some background material for the course (about terminology and similar) can be found in Chapter 1 and Ch. 2.1-3 of my Lecture notes in macroeconomics (a text in the pipeline).

A print of Chapter 6 was handed out.
We came to §6.3.2.
A follow-up.
10/9 Debt arithmetic. Application to the SGP of the EMU. Solvency, NPG condition, and GIBC.      Came to 6.5.
Errata to Ch. 6 including new version of Section 6.4.1.
17/9 Why Ricardian Equivalence fails. Barro's dynasty model (cursory).   We start by 6.5. A follow-up.
Links to Ch. 3 and 4 of Lecture Notes (about Diamond's OLG, for those interested). New version of p. 219. Errata to Ch. 7.
24/9 Continuous time analysis. Intro to Blanchard's model of "perpetual youth".   Deriving the consumption function is left for Exercise IV.2. Came to 12.2.2.
Errata to Ch. 12
1/10 Aggregation. Dynamics. Phase diagram. Adding retirement. The rate of return in the long run. A small open economy (cursory).    We start by 12.2.2. Came to 12.3.
8/10 Lecture postponed to 22/10 because of the Zeuthen Lectures by Professor Orazio Attanasio.   Programme here.

Internal evaluation this week.

  
15/10 Autumn break.   For those who might be interested, here is a link to the complete set of chapter drafts for my Lecture Notes in Macroeconomics.  
22/10 Ricardian non-equivalence. GE analysis of government debt. A proper accounting of public investment. Optimal debt policy.   We start with a brief summary of 12.3-4.
Errata to Elmendorf and Mankiw and other course material.		 A follow-up.
Ch. 13.5 and most of §5 of Elmendorf and Mankiw was postponed to 29/10.
29/10 Tobin's q-theory of fixed capital investment. Application to a SOE.     A follow-up.
We came to Ch. 14 p. 575. So the firm's problem has been set up and motivated. How to apply the Maximum Principle and - later - phase diagram analysis should be known. So you should be able to solve VI.1 and VI.4 in class 30/10.
5/11 The housing sector. Rational expectations and speculative bubbles.     Midterm papers were returned. In the lecture we came to p. 631. Next Wednesday we finish Ch. 16 and speculative bubbles.
Errata to LN on bubbles.
12/11 Finish the housing sector and speculative bubbles. Money. The level of interest rates.   For those interested in The Stimulus and Say's Law Controversy, look here under "Macroeconomic Theory and Policy". We came to Ch. 19.
Errata.
19/11 Transition to the short run and the theory of effective demand. The Say's Law fallacy. Monopolistic competition, menu costs, abundant capacity.     We came to 19.3, to be quickly finished next week.
26/11 IS-LM dynamics with forward-looking expectations.     Errata to Ch. 20.
3/12 A small open economy. Monetary transmission mechanisms. The bank-lending channel.      Errata to Mishkin:
10/12 The liquidity trap and the corridor hypothesis. Taylor rule. Business cycles. Facts and theories. The RBC approach.   The main emphasis will be on Short Note 4. Barely began on the RBC approach.
Errata to Short Note 4.
On Quantitative Easing (QE), see Willem Buiter (2014) (not in syllabus).
17/12 The Keynesian approach. Precautionary saving. The financial crisis and macroeconomic repercussions.   If you downloaded Ch. 30 before 8:00 p.m. 15/12 and want a better layout of Figure 30.2 on page 1088, you should replace the last 6 pages of the pdf by these 6 pages. A follow-up.
      Lecture Notes in one PDF-file. The follow-up from 17/2 is not included in the file.
24/12 Merry Christmas!      
         
15/1 Exam 12-15.      
         
         

Link to exercise class
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