LECTURES IN ADVANCED MACROECONOMICS

FALL 2015.      LECTURER:    CHRISTIAN GROTH    In: CSS 2-1-12

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. Additional material is accessible via this site or via Faculty Library of the Social Sciences. 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
8/9 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 (list of contents here).

15/9 Debt arithmetic. Application to the SGP of the EMU. Solvency, NPG condition, and GIBC. A proper accounting of public investment.     Errata to Ch. 6.
22/9 Why Ricardian Equivalence fails. Barro's dynasty model (cursory).
 		     Follow up.
Historical data on US debt and data supporting Ricardian non-equivalence.
Errata to Ch. 7.
29/9 Continuous time analysis.
Blanchard's model of "perpetual youth".  An individual's decision problem.		   Deriving the consumption function is left for Exercise IV.2.
Errata to Ch. 12.		 We came to Ch. 12.2.
Follow up on empirics.
6/10 Aggregation. Dynamics. Phase diagram. Adding retirement. The rate of return in the long run. A small open economy (cursory).      Because of its relation to theory of the rate of return in the long run, I decided to place Note 1 here. It is self-tuition.
Errata to Ch. 9 and 12.
13/10 Autumn break.      
20/10 Ricardian non-equivalence. GE analysis of public debt. Public and foreign debt in a small open economy.    The midterm paper problem will be posted at this website 20/10 at 8 a.m. Deadline 3/11 at 10:15 a.m.
Errata to Elmendorf and Mankiw and other course material.		 Follow up
27/10 Optimal debt policy.
Intro to Tobin's q-theory of fixed capital investment.  		    Follow up
3/11 Tobin's q. Application to a SOE.      More follow-up on Tobin's q.
Errata to Ch. 14 and 15.
 
10/11 The housing sector.
Rational expectations and speculative bubbles.
Money. The level of interest rates. 		    Follow-up on the fundamental house price and on expectations formation.
Follow-up on hysteresis, cf. Midterm Paper Problem 1.
17/11 Transition to the short run and the theory of effective demand. The Say's Law fallacy. Monopolistic competition, menu costs, abundant capacity. The static IS-LM model (refresher).   Midterm paper will be returned with comments.
For those interested in The Stimulus and Say's Law Controversy, look here under "Macroeconomic Theory and Policy". 		Midterm paper was returned. A comment from the floor was ...(see follow-up).
Errata to Ch. 19.
24/11 IS-LM dynamics with forward-looking expectations. A small open economy (Exercise X.9).     Errata to Ch. 16, 19 and 22. Next week double lecture 10:15-12 and 12:15-14.
1/12,
10-12.		 Follow-up on Ch. 22. Monetary transmission mechanisms. The bank-lending channel.  The liquidity trap and the corridor hypothesis.   Errata to Mishkin.  
1/12, 12-14, CSS  22.0.19 Phillips curve and Taylor rule. The 2007-2009 financial crisis and its macroeconomic repercussions. Business cycles. Facts and theories I.    Note 4 will be handed out.
On Quantitative Easing (QE) see Willem Buiter (2014) (not in syllabus).
 
8/12 Business cycles. Facts and theories II.
The RBC approach vs. the Keynesian approach. Precautionary saving.  		  Supplementary: Blanchard note (2005) on fluctuations (not in syllabus).

Recently I have received e-mail questions to the more recent lecture notes. Here are my answers. Continued 15/12, 16/12, and 31/12.
More Errata.
  You may e-mail me questions related to the exam and I will answer here ASAP. Deadline for your questions is Friday January 8, 2016, at 2 p.m.

 

   Lecture Notes in one PDF-file (Short Note 1 - 4 at the end).  The  journal articles in syllabus not included.
The Lecture Notes in one PDF-file also available in Absalon.		   
24/12 Merry Christmas!      
         
11/1, 9-12. Exam      
         
         

Link to exercise class
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