Quick Links
Syllabus Econ 513 Spring 2008
Course Description: Graduate Macroeconomic Theory assumes you have an Intermediate understanding of macroeconomic models (e.g. Econ 313 at UM) as well as basic calculus and linear algebra from college math (e.g. Math 151 at UM). We will focus on US aggregate economic institutions and policy making tools to understand better how US markets, real and financial, determine income, growth rates, interest rates, price level and both the inflation and unemployment rates.
Organization and Readings: There is no good advanced text for this material at the masters level. Some are overly ambitious mathematically; some are weak on economic coverage. Our progress through macroeconomic theory will reflect the sequence of topics in the reading list with references to Blanchard’s Macroeconomics 2003.
Exams and Grading: There will be a take home midterm given about half way through the course, a take home final exam each worth 45% of the course grade. The remaining 10% is homework and class participation.
1. National Income and Product Accounts
Blanchard Chapter 2.
http://www.stls.frb.org/publications
2. Microeconomic Foundations of Macroeconomics
Wm Scarth Chapter 1
3. Economic Growth
Blanchard Chapters 10-12.
4. Market for goods and services
5. Market for money
6. IS and LM analysis and “Aggregate Demand”
7. Labor Market and Three Aggregate Supplies
8. Neo-classical Monetary Policy and Fiscal Policy (markets that clear)
9. Involuntary Unemployment – New Keynesian Models (markets that do not clear)
Stiglitz, J. “Theories of Wage Rigidity” Keynes’ Economic Legacy: Contemporary
Summers, L. “Relative Wages, Efficiency Wages and Unemployment” AER 1988.
10. Rational Expectations – New Classical Models (markets that clear)
Grossman, S. and Stiglitz, J. “On the Impossibility of Information ally Efficient Markets” AER 1980
Maddock, R and M. Carter, “A Child’s Guide to Rational Expectations”, JEL, 1982.
Parsaran The Limits of Rational Expectations 1987