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Economics 202a Readings, Spring 1998

J. Bradford DeLong
delong@econ.berkeley.edu
http://www.j-bradford-delong.net


A word on the pace of the course: the pace is aspirational--these are the topics that I would like to cover in the course of a first course in macroeconomics. But the pace can be adjusted: should the class think it desirable to slow down, we can easily slow down--at the price of pushing some material into 202b. (We could also speed up :-), and add a section on unemployment.)


I. Introduction

Tuesday Jan 20: Introduction

Lecture 1 handouts: logistics and syllabus

David Romer, Advanced Macroeconomics, pp. 1-4.

 


II. Classical and NeoClassical Growth Models

Thursday Jan 22: The Solow Growth Model

Lecture 2 handouts: Solow model and problem set 1

David Romer, Advanced Macroeconomics, pp. 5-15.
Robert Solow (1956), "A Contribution to the Theory of Economic Growth," Quarterly Journal of Economics 70 (February), pp. 65-94.

 

Tuesday Jan 27: The Solow Growth Model II

Lecture 3 handout

David Romer, Advanced Macroeconomics, pp. 15-33.
Robert Solow (1957), "Technical Change and the Aggregate Production Function," Review of Economics and Statistics 39: pp. 312-20.

Thursday Jan 29: The Solow Growth Model III

J. Bradford DeLong (1988), "Productivity Growth, Convergence, and Welfare: Comment"
Martin Feldstein and Charles Horioka (1980), "Domestic Saving and International Capital Flows," Economic Journal 90 (June): pp. 314-329.
Xavier Sala-i-Martin (1997), "I Just Ran Four Million Regressions" (NBER working paper 6252).

 

Tuesday Feb 3: The Ramsey Model (problem set 1 due)

handout; Hamiltonian handout; (problem set 2 handout delayed due to power outage)

David Romer, Advanced Macroeconomics, pp. 39-53.

 

Thursday Feb 5: The Ramsey Model II

Problem set 2

David Romer, Advanced Macroeconomics, pp. 53-72.

Tuesday Feb 10: The Ramsey Model III

Ramsey government handout

Robert Barro, "Are Government Bonds Net Wealth?" Journal of Political Economy 82 (1974): 1095-1117.
B. Douglas Bernheim and Kyle Bagwell, "Is Everything Neutral?" Journal of Political Economy 96 (1988): 308-38.

Thursday Feb 12: The Diamond Model

David Romer, Advanced Macroeconomics, pp. 72-88.
Peter Diamond (1965), "National Debt in a Neoclassical Growth Model," American Economic Review 55 (December): pp. 1126-1150.

Tuesday Feb 17: The Diamond Model II (problem set 2 due)

Olivier Blanchard (1985), "Debts, Deficits, and Finite Horizons," Journal of Political Economy 93 (April): pp. 223-247.

 

Thursday Feb 19: Early Midterm


III. Endogenous Growth Models

Tuesday Feb 24: Introduction to New Growth Theory

handout and problem set 3

David Romer, Advanced Macroeconomics, pp. 95-110.
Paul Romer (1986), "Increasing Returns and Long Run Growth," Journal of Political Economy 94 (October): pp. 1002-1037.

Thursday Feb 26: Endogenous Technological Change

Paul Romer (1990), "Endogenous Technological Change," Journal of Political Economy 98 (October), pp. S71-S-102.
Philippe Aghion and Peter Howitt (1992), "A Model of Growth Through Creative Destruction," Econometrica 60 (March): pp. 323-51.

 

Tuesday Mar 3: New Growth Theory and Knowledge Accumulation

handout

David Romer, Advanced Macroeconomics, pp. 111-126.
Charles Jones (1995), "Time Series Tests of Endogenous Growth Models," Quarterly Journal of Economics 110 (May): pp. 495-525.
Michael Kremer (1993), "Population Growth and Technological Change: One Million B.C. to 1990," Quarterly Journal of Economics 108 (August): pp. 681-716.

 

Thursday Mar 5: New Growth Theory and Human Capital (problem set 3 due)

handout

David Romer, Advanced Macroeconomics, pp. 126-140.
N. Gregory Mankiw, David Romer, and David Weil (1992), "A Contribution to the Empirics of Economic Growth," Quarterly Journal of Economics 107 (May): pp. 407-37.

 



IV. Real Business Cycles


Tuesday Mar 10: Facts About Economic Fluctuations

Data Assignment

David Romer, Advanced Macroeconomics, pp. 146-50.
Robert Barsky and Jeffrey Miron (1989), "The Seasonal Cycle and the Business Cycle," Journal of Political Economy 97: pp. 503-34.
Christina Romer (1986), "Spurious Volatility in Historical Unemployment Data," Journal of Political Economy 94: pp. 1-37.
Christina Romer (1994), "Remeasuring Business Cycles," Journal of Economic History 54: pp. 19-39.
Olivier Blanchard (1981), "What Is Left of the Multiplier Accelerator?" American Economic Review 71 (May): pp. 150-4.

 

Thursday Mar 12: Zero-Capital RBC Models

David Romer, Advanced Macroeconomics, pp. 150-64.
Bennett McCallum (1989), "Real Business Cycle Models," in Robert Barro, ed., Modern Business Cycle Theory (Cambridge: Harvard University Press): pp. 16-50.

 

Tuesday Mar 17: More General RBC Models

David Romer, Advanced Macroeconomics, pp. 164-83.
John Campbell (1994), "Inspecting the Mechanism: An Analytical Approach to the Stochastic Growth Model," Journal of Monetary Economics 33: pp. 463-506.
Timothy Cogley (1990), "International Evidence on the Size of the Random Walk in Output," Journal of Political Economy 98: pp. 501-18.
John Cochrane (1994), "Permanent and Transitory Components of GNP and Stock Prices," Quarterly Journal of Economics 109: pp. 241-65.

 

Thursday Mar 19: Extensions and Limitations

Problem Set 4: "Real" Business Cycles

David Romer, Advanced Macroeconomics, pp. 183-90.

 


V. "Neo-Keynesian" Models

Tuesday Mar 31: Introduction to Neo-Keynesian Models

David Romer, Advanced Macroeconomics, pp. 195-205.
J.M. Keynes (1924), Monetary Reform (New York: Harcourt, Brace and Co.), pp. v-vi, 3-69, 81-95, 152-191.

 

Thursday Apr 2: Open-Economy IS-LM (problem set 4 due)

David Romer, Advanced Macroeconomics, pp. 205-14.
Rudiger Dornbusch (1976),"Expectations and Exchange Rate Dynamics," Journal of Political Economy 84: pp. 1161-76.

 

Tuesday Apr 7: The Phillips Curve

Problem Set 5

David Romer, Advanced Macroeconomics, pp. 214-36.
Paul Samuelson and Robert Solow (1960), "Analytical Aspects of Anti-Inflation Policy," American Economic Review 50: pp. 177-94.
Milton Friedman (1968), "The Role of Monetary Policy," American Economic Review 58 (May): 1-17.
Irving Fisher (1933), "The Debt-Deflation Theory of Great Depressions," Econometrica 1: pp. 337-57.

Thursday Apr 9: The Lucas Model

David Romer, Advanced Macroeconomics, pp. 241-55.
John Muth (1961), "Price Movements and the Theory of Rational Expectations," Econometrica 29, 6.
Thomas Sargent and Neil Wallace (1976), "Rational Expectations and the Theory of Economic Policy," Journal of Monetary Economics 2.
Robert Barro (1976), "Rational Expectations and the Role of Monetary Policy," Journal of Monetary Economics 2.
Robert Lucas and Thomas Sargent (1979), "After Keynesian Macroeconomics," in After the Phillips Curve: The Persistence of High Inflation and High Unemployment (Boston: Federal Reserve Bank of Boston), chapter 19.

 

Tuesday Apr 14: Old Keynesianism

Carl Walsh Referee Report Assignment

David Romer, Advanced Macroeconomics, pp. 255-76.
Laurence Ball and Stephen Cecchetti (1988), "Imperfect Information and Staggered Price Setting," American Economic Review 78: pp. 999-1018.*
Stanley Fischer (1977), "Long-Term Contracts, Rational Expectations, and the Optimal Money Supply Rule, Journal of Political Economy 85: pp. 191-205.*

 

Thursday Apr 16: New Keynesianism (problem set 5 due)

David Romer, Advanced Macroeconomics, pp. 276-302.
George Akerlof and Janet Yellen (1985), "A Near-Rational Model of the Business Cycle, with Wage and Price Inertia," Quarterly Journal of Economics 100: pp. 823-38.*
N. Gregory Mankiw (1985), "Small Menu Costs and Large Business Cycles," Quarterly Journal of Economics100: pp. 529-39.*
Laurence Ball and David Romer (1990), "Real Rigidities and the Non-Neutrality of Money," Review of Economic Studies 57: pp. 183-203.*
Olivier Blanchard and Nobuhiro Kiyotaki (1987), "Monopolistic Competition and the Effects of Aggregate Demand," American Economic Review 77: pp. 647-66.*
Laurence Ball, N. Gregory Mankiw, and David Romer (1988), "The New Keynesian Economics and the Output-Inflation Tradeoff," Brookings Papers on Economic Activity 1988 1: pp. 1-65.
Andrew Caplin and John Leahy (1991), "State-Dependent Pricing and the Dynamics of Money and Output," Quarterly Journal of Economics (August): pp. 683-708.

 


VI. Inflation and Macroeconomic Policy

Tuesday Apr 21: Inflation

Problem Set 6

David Romer, Advanced Macroeconomics, pp. 388-412.
Milton Friedman (1956), "The Quantity Theory of Money: A Restatement," in M. Friedman, ed., Studies in the Quantity Theory of Money (Chicago: U. of Chicago): pp. 1-24.
Stephen Goldfeld and Daniel Sichel (1990), "The Demand for Money," in Benjamin Friedman and Frank Hahn, eds., Handbook of Monetary Economics (Amsterdam: North-Holland): vol. I, pp. 299-356. Studies in the Quantity Theory of Money (Chicago: U. of Chicago): pp. 25-117.
Robert Shiller (1997), "Why Do People Dislike Inflation?" in Christina D. Romer and David Romer, eds., Reducing Inflation: Motivation and Strategy (Chicago: University of Chicago Press). Studies in the Quantity Theory of Money (Chicago: U. of Chicago): pp. 25-117.
Laurence Ball and N. Gregory Mankiw, "Relative Price Changes as Aggregate Supply Shocks," Quarterly Journal of Economics 110:1 (February 1995), pp. 161-94.

 

Thursday Apr 23: Central Banking

Carl Walsh (1995), "Optimal Contracts for Central Bankers," American Economic Review 85: pp. 150-67.
J. Bradford DeLong and Lawrence H. Summers (1992), "Macroeconomic Policy and Long Run Growth," in Policies for Long Run Growth (Kansas City: Federal Reserve Bank of Kansas City), pp. 93-128.
Robert Shiller (1990), "The Term Structure of Interest Rates," in Benjamin Friedman and Frank Hahn, eds., Handbook of Monetary Economics (Amsterdam: North-Holland): I, 627-722.
Olivier Blanchard, "Output, the Stock Market, and Interest Rates," American Economic Review 71:1 (March 1981), pp. 132-43.

 

Tuesday Apr 28: Monetary Policy

David Romer, Advanced Macroeconomics, pp. 412-20.
Olivier Blanchard (1984), "The Lucas Critique and the Volcker Deflation," American Economic Review 74: pp. 211-15.
Milton Friedman (1953), "Stabilization Policy: A Theoretical Analysis," in Milton Friedman, Essays in Positive Economics (Chicago: Univerity of Chicago Press).

 

Thursday Apr 30: Hyperinflation (Problem Set 6 due)

David Romer, Advanced Macroeconomics, pp. 420-33.
Philip Cagan (1956), "The Monetary Dynamics of Hyperinflation," in Milton Friedman, ed., Studies in the Quantity Theory of Money (Chicago: U. of Chicago): pp. 25-117.

 

Tuesday May 5: Stabilization Policy

Finn Kydland and Edward Prescott, (1977) "Rules Rather than Discretion: The Inconsistency of Optimal Plans," Journal of Political Economy 87: pp. 473-92.
Kenneth Rogoff (1989) "Reputation, Coordination, and Monetary Policy," in Robert Barro., ed., Modern Business Cycle Theory (Oxford: Basil Blackwell, 1989), pp. 236-264.
Laurence Ball (1994), "What Determines the Sacrifice Ratio?" in N. Gregory Mankiw, Monetary Policy (Chicago: University of Chicago Press,): pp. 155-82.

 

Thursday May 7: Final exam (in class)

 

Thursday May 14: Referee Report on Walsh Due

 


After this course: a sketch of what Economics 202b (Fall 1998) might include:


Professor of Economics J. Bradford DeLong, 601 Evans, #3880
University of California at Berkeley
Berkeley, CA 94720-3880
(510) 643-4027 phone (510) 642-6615 fax
delong@econ.berkeley.edu
http://www.j-bradford-delong.net/

This page: http://www.j-bradford-delong.net/Teaching_Folder/Econ_202a/Econ_202a_Syllabus.html

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