Macroeconomic Theory and Policy (2008), by David Andolfatto.
Free download available here.
WMC 1661, Wednesday 1.30-2.30
WMC 2690, TBA
WMC 3605, Monday 11.20-12.20
Office Hours (Instructor)
WMC 2684, Monday 10.30-11.20 (or by appointment)
Midterm 1: Monday, Jun 27, 2016 (Note: class on Wed Jun 29 is cancelled.)
Midterm 2: Wednesday, Jul 13, 2016
Midterm 3: Monday, Aug 08, 2016
Note: there is no final exam.
Homework Questions available here.
Important Notice: Dead Grandmother Alert.
Your course grade will be based on the following formula: Grade = 50-50 weighting of best 2 out of 3 midterms.
Sober assessments of my teaching ability available here, on Ratemyprofessors.com.
 Economic Methodology. A brief overview of how economists generally go about trying to understand things.
Lecture slides: The Science of Economics.
The Methodology of Postive Economics (Milton Friedman, 1966).
What are Economic Models? (Sam Ouliaris, IMF 2011) .
Big Questions and Big Numbers (The Economist).
Dani Rodrik on Growth, Development, and Modeling, Timothy Taylor, 2015.
Milton Friedman on Greed (interview with Phil Donahue, 1979).
Moral Misunderstanding and the Justification of Markets (Paul T. Heyne, 1998).
 The Gross Domestic Product [Chp1]. Measurement issues; definitions, data.
The Gross Domestic Product.
The GDP: Caveats and Some Data.
The Essential Macroeconomic Aggregates, Lequiller and Blades 2014.
Eyeballing the World Economy, Timothy Taylor, 2012.
GDP and Social Welfare in the Long-Run, Timothy Taylor, 2015.
200 Countries, 200 Years, 4 minutes, Hans Rosling, 2010.
Great data set: Measuring Worth
Three centuries of macroeconomic data, Bank of England.
The trouble with GDP, The Economist (2016).
An Overview of BEA's Source Data and Estimating Methods for Quarterly GDP, Katz 2006.
Understanding National Accounts, Lequiller and Blades 2014.
Output and Employment
[Chp2&3]. A static neoclassical model designed to explain time allocation
real wages, and GDP as function underlying productivity. A simple extension to incorporate uncertainty. Irrational and
rational expectations; multiple equilibria; self-fulfilling prophecies and "animal spirits."
Lecture slides: Interpreting the Business Cycle.
Actual and Potential GDP (David Altig, June 2005)
Beyond Shocks: What Causes Business Cycles? An Overview (Jeffrey Fuhrer and Scott Schuh, New England Review, 1998).
 Redistributive Policies and Employment Across Nations [Chp6:129-141] and here. What accounts for the differences in employment
across nations? Investigating some of the theoretical effects of government fiscal policies on employment patterns.
Lecture slides: The Employment of Nations.
Additional reading: Why Do Americans Work More than Europeans? (Ed Prescott, WSJ October 2004)
Additional reading: Seven Questions About Income Inequality (Laura Fieveson, June 2012)
Additional reading: Experiments in Basic Income Programs, 2015.
Saving [Chp5]. A simple two-period (dynamic) model designed to
explain consumption/saving choices, the
determination of the current account, and the real interest rate.
Lecture slides: Consumption and Saving.
 Capital and Investment [Chp7]. Extending the simple dynamic model to incorporate domestic capital expenditure.
Lecture slides: Investment (new version).
Lecture slides: Capital and Investment (old version).
Optional reading: How central banks view the world, Andolfatto 2003.
Long term interest rates: a survey.
[Chp6: 142-152]. An application of the simple dynamic model
to understand and interpret government deficits;
the Ricardian Equivalence Theorem. Reading: The Public Purse (Economist Magazine, November 24, 1990), Page 1, Page 2.
Lecture slides: Fiscal Policies. (I will not examine you on the first part of these slides; focus on the latter part, beginning with Dynamic Endowment Model.)
Optional: Canadians: Successful Austerians? Williamson, 2015.
[Chp4]. The modern theory of unemployment. (In terms of the theory of unemployment, focus
on slides, rather than text.)
Lecture slides: Employment, Unemployment, and Turnover
Many Moving Parts: A Closer Look at the U.S. Labor Market (David Andolfatto and Marcela Williams, 2011)
Interpreting the Beveridge Curve (Andolfatto blogpost, Dec. 18, 2010)
The Great Canadian Slump: Can it Happen in the U.S.? (Andolfatto blogpost, Dec. 22, 2010)
[Chp8]. (I would recommend giving chapter 8 a quick read;
focus on lecture slides)
Lecture slides I: Money.
Lecture slides II: A simple OLG model.
Reading: What is Money? How is it Created and Destroyed?
Banking Panics in the U.S.: 1873-1933 (EH Net)
Lender of Last Resort Policies: From Bagehot to Bailout (Angela Redish, 2001)
The Federal Reserve System (Wikipedia)
On a Correct Measure of Inflation (Alchian and Klein, 1973)
 International Monetary Systems
Lecture slides: International Monetary Systems
Reading: Sovereign Debt: A Modern Greek Tragedy (Fernando Martin and Chris Waller)
Reading: Global Early Warning and the IMF (Doyle, 2014)
Lecture slides: Sovereign Debt: A Modern Greek Tragedy
Lecture slides: The Euro Area Crisis (Orphanides, 2013)
 The Great Recession
Lecture slides: The U.S. Recession of 2007-201? (by Robert E. Lucas, Jr.)
Seven Sects of Macroeconomic Error, Part I (by Brad DeLong)
The Economic Crisis from a Neoclassical Perspective (by Lee Ohanian)
Final exam will cover all materials above this point (except for optional readings).
 Growth and Development [Chp9]. We did not have time to cover this section, so will not constitute exam material.