Readings
The texts
marked with (**) are of compulsory reading, and those with (*) are
useful reading
Materials not covered in classes
Introduction to
Matlab
(**)
David Griffiths (2005). An Introduction to Matlab.
This is a short and very well done text for introducing Matlab to us.
Read those parts that were discussed in classes.
(*)
Matlab Primer
This is the original document from Mathworks (the Matlab creator)
introducing the package to the reader. It's very large (214 pages), but
you do not need to read it all. In those parts of my slides which you
find more complicated, check this paper for help.
Mark Gockenbach - A Practical Introduction to
Matlab.
Two Period
Economies: with exogenous and endogenous labor supply
J.C. Conesa and C. Garriga (2011). Teoria Económica del Capital y la
Renta, Universitat Autònoma de Barcelona. Chapter 4
.
Section 4.3 of this chapter is not covered in this course.
J.C. Conesa and C. Garriga (2011). Teoria
Económica del Capital y la Renta, Universitat Autònoma de Barcelona (Chapter
5) .
Section 5.3 of this chapter is not covered in this course..
Martin Boileau (2001). "Two Period Economies:
A Review", University of Colorado, Boulder.
As an alternative to the two previous references; for those who have
trouble in reading Spanish. If you choose this text, please use the
slides as a reference point, so that you may skip parts that are not
relevant for this course, without no loss of crucial information for
later sections.
Shouyong Shi (2009). "Two Period Economies: A
Review", University of Toronto, Toronto.
As an alternative to the two previous references; for those who have
trouble in reading Spanish
Shouyong Shi (2009). "General Equilibrium in a
Two Period Economy", University of Toronto, Toronto.
This deals with the case of endogenous labor supply.
Is an alternative to Chapter 5 of Conesa and Garriga above. Follow my
slides (and skip over any section that is not discussed in my slides).
Introduction to
dynamic processes: fixed points and stability
Use as much as possible the slides in your study.
But if you feel like needing some further support from a textbook in
order to consolidate your knowledge, please read the parts of Chapters
2 and 3 of Edward R.
Scheinerman (1996).
Invitation to Dynamical Systems, Prentice Hall. that are
considered in the slides.
Notice that the two chpaters cover continuous and discrete time, but in
this course we just discuss discrete time.
The entire book can also be downloaded from here, http://www.ams.jhu.edu/~ers/invite.html
, where you can also find solutions to the end-chapters exercises.
Main
topics covered in classes
- The current
state of macroeconomics
No reading of the papers below is compulsory.
You will not be evaluated on the basis of whether you have read these
papers or not.
If
you are curious, and have time, you may read (in a light manner) the
first three papers, to get an idea of the current state of
macroeconomics.
Ricardo
Caballero (2010). "Macroeconomics after the Crisis: Time to
Deal with the Pretense-of-Knowledge Syndrome", MIT, Department of
Economics..
Rogoff,
K. (2010). "Three
Challenges Facing Modern Macroeconomics,"
American Economic Association Grand Challenge White Papers for Future
Research, September 21..
Woodford, M. (2008). "Convergence in
Macroeconomics: Elements of the New Synthesis", forthcoming in American
Economic Journal - Macroeconomics, Vol. 1, (1)..
Blanchard,
O. (2008). "The State of Macro", NBER Working Paper 14259, Cambridge,
Mass..
There is also a very recent (and funny) entry in the "The Economist"
about the current state of macro. However, it is a slide based
presentation, not very easy reading for students. Not conpulsory
reading, but if you are curious see:
The Economist, Jan 21st 2013, "A Brief
History of Macro",
http://www.economist.com/blogs/freeexchange/2013/01/brief-history-macro
- Stylized facts
about business cycles
No really compulsory reading on this topic.
As far as the points in the slides are concerned:
(i)
For points (1) to (3) students are advised (but not obliged) to read
chapter 3 of: Stephen Williamson (2011), Macroeconomics, 4th Edition,
Prentice Hall.
(ii) For point (4), I hope the
slides are self-suficient. But if you are very curious about filters,
in particular about the Hodrick-Prescott filter, yoy can read:
Dirk Krueger (2007). "Quantitative Macroeconomics: An Introduction" (Chapter
2), unpublished manuscript, Department of Economics
University of Pennsylvania .
It's a small text (12 pages), easy to read and very useful for the
study of the stylized facts of business cycles, in particular, to
understand how the Hodrick-Prescott filter is calculated.
(iii) If you want to see how NBER
dates the business cycles see the small paper
Determination of the December 2007 Peak in Economic Activity, NBER,
Mass., Cambridge .
(iv) For point (5), no reading
required. Slides are supposed to be self-sufficient.
(iv) For point (6), no reading
required. Slides are supposed to be self-sufficient. However, you may
have doubts about this stuff. If so, you can read just two sections of
the paper below by Antonio Fatás and Ilian Mihov:
Section 1: "Introduction" (pages 1 and 2)
Section 3: "Dating recoveries" (Pages 9--20
Antonio
Fatás and Ilian Mihov
(2013) "Recoveries", CEPR, London .
(iii) If you want to see how NBER
dates the business cycles see the small paper
Determination of the December 2007 Peak in Economic Activity, NBER,
Mass., Cambridge .
- Solution to
linear models with rational expectations
(**) Karl E. Whelan (2007).
"Solution Methods for Rational Expectations Models", Lecture Notes,
University College Dublin .
A small text very good for the study of this point. Notice that some
parts of this text are not of compulsory reading.
David Peel (2005). "Advanced Macroeconomics" (Chapter
2), unpublished manuscript, Lancaster University, UK .
It's a long text that can be used as complementary studying material, but
never as compulsory reading. .
- The Real
Business Cycle Model
The next text is destined to those that lack relevant
knowledge
about the Solow growth model, in terms of its basic results. Some of
our students do not have a bachelar degree in economics, and
so they need some extra help about some issues (or tools) that are of
crucial
importance for a more advanced study of macroeconomics.
Long run growth 2: The Solow model
by
Fabrzio Perri, Lecture Notes, Bocconi University, 2012.
Very good for the study of the RBC model is the following text.
(*)
Dirk Krueger (2007). "Quantitative Macroeconomics: An Introduction" (Cap.3
and following), unpublished manuscript, Department of
Economics University of Pennsylvania .
It's a long text. Very useful for studying the Solow growth model with
dynamic optimization. However, given its length, it is better if this
text is used as complementary material.
Use this text if you have doubts when reading the
slides about the Solow growth model with dynamic optimization.
----------------------------------------------------------------------
The next two texts contain almost any single detail about the Solow growth model (without dynamic optmimization).
They are (sorry) in Portuguese, and in continuous time, not discrete time):
Modelo de Solow: Equilíbrio de Longo Prazo,
Vivaldo Mendes e Sofia Vale, Lecture Notes, ISCTE-IUL, 2019.
Modelo de Solow: Processos de Transição
Dinâmica, Vivaldo Mendes e Sofia Vale, Lecture Notes, ISCTE-IUL, 2019.
- Credibility
and time consistency in economic policy
(**)
Cedric Tille (2012). "Effectiveness of policy and time inconsistency",
Lecture Notes, The Graduate Institute Geneva.
This is a small text which should be used to study the current problem
of time inconsistency in economic policy (the inflation game) and also
the topic coming next (the optimal choice of policy instruments: the
Poole model).
Notice that you should only read sections 2.1, 2.2, 2.3. and 2.4 for
the current topic.
Do not worry about sections 2.5 and 2.6 (material not covered in
classes), and the same happening to the entire section 1.
Section 3 (3.1, 3.2 and 3.3) should be studied for the next topic.
- The optimal
choice of policy instruments (the Poole model)
(**)
Cedric Tille (2008). "Effectiveness of policy and time inconsistency",
Lecture Notes, The Graduate Institute Geneva.
The entire section 3 (3.1, 3.2 and 3.3) of this short paper should be
studied for this part of the material.
- The New
Keynesian Model and optimal monetary policy
(**)
Karl E. Whelan (2007). "The New Keynesian Phillips Curve", Lecture
Notes, University College Dublin .
A small text that is very good for studying the New Phillips Curve.
Henrik Jensen (2006). "Monetary policy conduct
in New Keynesian settings", Lecture Notes, Department of Economics
University of Copenhagen
A small text that can be used as complementary reading.
- Central banks,
commitment, credibility and the financial crisis
The following references are entirely optional reading.
Special
number of the Journal of Economic Perspectives, Volume. 32 Number,
2018_-"Macroeconomics a Decade after the Great Recession".
See the two following papers, which provide a very balanced view on the two major ingredientes of modern macroeconomics:
Mark Gertler and Simon Gilchrist (2018). "What Happened: Financial Factors in the Great Recession" pages 3-30.
Jordi Galí (2018). "The State of New Keynesian Economics: A Partial
Assessment". pages 87--112
Olivier Blanchard, Giovanni Dell'Ariccia, and Paolo Mauro (2013).
Rethinking Macro Policy II: Getting Granular, IMF Working Paper, 15
April 2013 .
Discusses the story about the sacking of the top three economists at
the FED Minneapolis. These three economists were well known skeptics of
Keynesian ideas. It is the first time that such a movement is taken at
the heart of the FED, which suggests that Classical macro may be
loosing its ground at the core of applied macro.
Willem Buiter (2013). Forward Guidance: More
than Old Wine in New Bottles and Cheap Talk? Citi Research Economics,
25 September 2013.
Modern macro is all about forward looking behavior and "forward
guidance" as far as monetary and fiscal policies are concerned. In this
short paper, Buiter shows the limitations of such an approach and what
should be done in order to make (monetary) policy efficient. Its mainly
about "time contingent" versus "state contingent" policies.
Cardiff Garcia (2013). Buiter on forward
guidance, or, paging
Sumner/Krugman/Woodford/Eggertsson/Svensson, Financial Times, Sept 27
2013.
This is a summary of the paper by Buiter above, made by the Financial
Times in the section FT-Alphaville.