Macroeconomic theory dirk krueger1 department of economics university of pennsylvania january 26, 2012 1i am grateful to my teachers in minnesota, v. Ireland, peter and scott schuh 2008 productivity and macroeconomic performance. Please, read through the whole exam before starting. These assumptions are used in order to build macroeconomic models. The competitive equilibrium and the pareto optimum are equivalent here, as in the version of the model. Only experience in solving practical problems fully conveys the power of the recursive approach, and. This includes regional, national, and global economies while macroeconomics is a broad field of study, there are two areas of research that are emblematic of the discipline. The most important point is that whether we are doing the solow model, focusing on the ac. Macroeconomic theory and policy 2nd edition munich. After the microfoundations revolution, even those doing policyrelated work. V chari, timothy kehoe and edward prescott, my excolleagues at stanford, robert hall, beatrix paal and tom sargent, my colleagues at upenn hal cole, jeremy greenwood, randy wright and. This revised second edition emphasizes the general equilibrium character of macroeconomics to explain effects across the whole economy while taking into account recent research in the field. They produce the same good, which can be both consumed or invested. Get macroeconomic theory and policy william h branson pdf file for free from our online library.
Macroeconomic theory i ec 7343 dietrich vollrath, ph. By the end of this course, you should be able to interpret economic models and learn how to analyze macroeconomic performance within the context of these models. Develops in a simple and rigorous manner the central topics of modern macroeconomic theory including rational expectations, growth, business cycles, money, unemployment, government policy, and the macroeconomics of nonclearing markets. General examination in macroeconomic theory fall 2003 you have four hours. Keynesian economics are various macroeconomic theories about how in the short run and. Econstor is a publication server for scholarly economic literature, provided as a noncommercial public service by the zbw. First, to the extent that the deep parameters describing preferences and constraints are approximated reasonably well, the theory can provide reliable predictions. Macroeconomic theory jeanpascal benassy oxford university.
Preliminaries highlights how net income wages plus returns to capital is allocated to either consumption or an increase in the capital stock. In particular, the notion that markets are selfcorrecting and always in equilibrium appears to have taken a heavy blow. The course provides a systematic introduction to the key elements of macroeconomic analysis. Macroeconomic theory and policy munich personal repec archive. The solution for this problem is available at pages 8384, but the book does not give the real answer for the second question of the problem. But in spite of massive increases in the balance sheets of key central. This paper proposes a way to understand the evolution of macroeconomic thinking. Over 150 years ago david ricardo argued with thomas malthus over the importance of supply versus demand in growth and fluctuations, much as. V chari, timothy kehoe and edward prescott, my colleagues at stanford, robert hall, beatrix paal and tom sargent.
Grades will be based on one midterm, homework assignments, and the final exam. Two versions were particularly influential, one developed by irving fisher in works that included his 1911 the purchasing power of money and another by cambridge economists over the course of the early 20th century. Find materials for this course in the pages linked along the left. Chapter 19a macroeconomic theory of the open economy 9 2. Save this book to read macroeconomic theory and policy william h branson pdf ebook at our online library. While you have taken intermediate macro, most of mishkins book is meant to be accessible to less prepared students. Interpreting the past and predicting the future with a twosector rbc model, elsevier for the society of economic dynamics 1. Macroeconomic theory has its origins in the study of business cycles and monetary theory.
The field of macroeconomic theory has evolved rapidly over the last quarter century. Among them, i would like to thank especially selo imrohoroglu. Textbook references in the syllabus are denoted in bold type. The rst sections focus on deterministic growth models and models of overlapping generations olg. The conceptual evolution of inflation inertia in brazil teses usp. Jeanpascal benassy, with his customary expository elegance and his unmatched ability to distill the essential, carries the reader without effort from the simple to the sophisticated. The history of macroeconomics from keyness general theory to.
Munich personal repec archive macroeconomic theory and policy 2nd edition andolfatto, david simon fraser university 1 january 2008 online at. Two common types of trade policies are tariffs taxes on imported goods and quotas limits on the quantity of imported goods. The production function of the united states, 19792007. Lecture note on classical macroeconomic theory econ 5 prof. The theory of credit and macroeconomic stability joseph. John maynard keynes attacked some of these classical theories and produced a general theory that described the whole economy in terms of aggregates rather than individual. Instructor information professor alan finkelstein shapiro braker hall, room 306 email.
This course is the third part of a threecourse sequence. There is a solutions book of benassys macroeconomic theory available on the internet. Essentials of advanced macroeconomic theory routledge. Keynesian macroeconomic models assume that prices are sticky, or even. This graduate textbook is a primer in macroeconomics. This includes the solow model, consumption theory, topics in government.
Sargent new york university and hoover institution the mit press cambridge, massachusetts london, england. In particular, i will focus on deterministic and stochastic dynamic programming, search. The course provides the students with graduatelevel theoretical tools and discusses their application to empirical evidence. Note that questions are not equally weighted, and points within a question may have di. Macroeconomics tries to understand the market interactions and the decisions in market settings. Later sections are dedicated to stochastic models, including neoclassical growth and real business cycles models. Course objectives students in this course are expected to learn about.
Macroeconomic theory i and ii this course is the first part of a twosemester graduate sequence in macroeconomics. An intermediate level macroeconomics textbook that develops the core elements of modern macroeconomic theory in easily digestible bits using indifference curves, budgets constraints, and simple math. Understanding the evolution of macroeconomic thinking. Macroeconomic variables can then be computed by summing up the actions of all individuals. Learn macroeconomic theory with free interactive flashcards. In general, early theorists believed monetary factors could not affect real factors such as real output. Understanding the evolution of macroeconomic thinking since 1717. These notes summarize the material of a rst semester graduate course in macroeconomic theory. Neoclassical macroeconomic modelscommonlyassumethatpricesareperfectly. Macroeconomic theory jeanpascal bonassy problemssolutions. In chapters 8 and 9, we examine the market for goods and services. Doellgast and others published collective bargaining find. Macroeconomics investigates aggregate behavior by imposing simplifying assumptions assume there are many identical.
Macroeconomic theory and policy simon fraser university. Macroeconomic theory i is the first part of a twopart core sequence that is compulsory for all firstyear students for ma in economics. This is a graduate course in the firstyear macroeconomics field. This theory is a synthesis between classical economics and keynesian economics that was created to help explain stagflation high rates of both unemployment and inflation that emerged in the 1970s. The book discusses model formulation and estimation and provides a variety of examples. This is the first semester graduate macroeconomics course. Core ideas and applications are stressed throughout. Preliminaries where ct is consumption spending, it is investment spending, gt is government spending, and x t. Macroeconomic theory ii final exam, may 7th 2008 you have 2hoursfor this exam. This, in your intermediate class, might have been referred to as the valueadded approach. V chari, timothy kehoe and ed ward prescott, my excolleagues at stanford, robert hall, beatrix paal and tom. I will cover some basic aggregate dynamic frameworks with their applications. Trying to summarize the essentials of macroeconomic theory in the wake of the financial crisis that has shaken not only western economies but also the macroeconomic profession is no easy task. The macroeconomic thinking, not necessarily synonymous with macroeconomics.
Its purpose is to introduce the basic models macroeconomists use to study economic growth and fluctuations. It introduces the students to fundamental blocks of modern macroeconomics. There is today a large discrepancy in the way macroeconomic theory is. A core of practical macroeconomics stanford university.
A core of practical macroeconomics macroeconomicsthe part of economics that focuses on economic growth and economic fluctuationshas always been an area of great controversy and debate. Then, we introduce di erent models that can be used to analyze the observed data. Macroeconomic analysis is primarily concerned with two issues. We have assumed that the economy discounts speriods ahead. Macroeconomic theory this is a wikipedia book, a collection of wikipedia articles that can be easily saved, imported by an external electronic rendering service, and ordered as a printed book. As always with keynes, he provided no formal model of expectation formation. Each topic is viewed through explicit models, designed to reveal its central issues as simply and directly as possible, but without giving up either rigor or substance. Alternative rigidities 1 problems 114 6 uncertainty and financial assets 118 6.
It represents the current, stateoftheart macroeconomic theory. Lecture notes macroeconomic theory i economics mit. Professor snyder and his wife maura doyle who also teaches economics at dartmouth live within walking distance of campus in hanover, new hampshire, with their three elementaryschoolaged daughters. Chapter1 simplerepresentativeagent models thischapterdealswiththemostsimplekindofmacroeconomicmodel, whichabstractsfromallissuesofheterogeneityanddistributionamong. Recursive macroeconomic theory second edition lars ljungqvist stockholm school of economics thomas j. A dynamic general equilibrium approach mike wickens university of york princeton university press exercises and solutions completed january 2010 0. It starts from essential undergraduate macroeconomics and develops the central topics of modern. Macroeconomic theory and analysis final exam, may 4th 2006 you have 2 hours for this exam. The sequence to sargents dynamic macroeconomic theory with uptodate examples and applications of recursive methods. Modern macroeconomic theory with emphasis on shortrun general equilibrium models.
The basic analytical tools for dynamic macroeconomics or recursive macroeconomics are. Employment and inflation is a collection of scholarly papers that accounts the development of a microeconomic theory of wage and price decisions and commitments. Macroeconomic theory dirk krueger1 department of economics stanford university september 25, 2002 1i am grateful to my teachers in minnesota, v. In chapters 10 and 11, we examine the money market.
As he says, before the microfoundations revolution, policy models were empirical, using the developments in theory and in econometrics which had followed the. Full text of macroeconomic theory internet archive. J to give the students an overview of contemporary macroeconomic theory and to make the students understand and analyze relationships among different macroeconomic variables such as national income, employment, consumption, inflation and the quantity of money, student will be able to understand the role of government. The starting hypothesis of the economic theory of entrepreneurship is that the. This princeton university press monograph is about a class of linear quadratic economies for which competitive equilibria can be computed quickly using linear control theory. Macroeconomic theory a dynamic general equilibrium approach michael wickens princeton university press. Choose from 470 different sets of macroeconomic theory flashcards on quizlet. Bohn this course will examine the linkages between interest rates, money, output, and inflation in more detail than mishkins book. An international monetary system perspective masazumi wakatabe abstract. The quantity theory of money dominated macroeconomic theory until the 1930s. Recursive macroeconomic theory provides both an introduction to recursive methods and advanced material, mixing tools and sample applications. Macroeconomic theory iii economics mit opencourseware.
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