Note: Dates shown below are a rational forecast of our progress in the course. Depending on our actual progress, exams and assignment dues dates may change.

Readings with authors listed in bold face are required. Those in regular type are additional readings that may be read by those with strong interests in the subject. Additional readings maybe added as the course progresses. Be sure to check the Web site regularly in order to keep up with any changes; don't just print this page at the beginning of the course and rely on that for the entire semester.

Course Outline (Links)

1. Introduction to macro; measurement of macro variables
2. Economic growth
3. Equilibrium in the long run

Mid-Term Exam #1

4. Expenditures in the short run
5. Money and short-run equilibrium in a closed economy
6. Short-run equilibrium in an open economy
7. Aggregate supply and the Phillips curve

Mid-Term Exam #2

8. Asset markets and exchange rates
9. Macroeconomic policy

Final Exam

1. Introduction to Macro; Measurement of Macro Variables

August 31: Introduction. No reading assigned.

September 2 and 4: Macroeconomic Variables

• Burda, Michael, and Charles Wyplosz, Macroeconomics: A European Text, 5th ed., Oxford University Press, 2009, Chapters 1 and 2.
• Easterlin, Richard A. 2001. Income and Happiness: Towards a Unified Theory. Economic Journal 111 (473), 465-484.
• Henderson, J. Vernon, Adam Storeygard, and David N. Weil. 2009. Measuring Economic Growth from Outer Space. Cambridge, Mass.: National Bureau of Economic Research, Working Paper No. 15199.
• Frey, Bruno S. 2008. Happiness: A Revolution in Economics. Cambridge, Mass.: MIT Press. (A comprehensive overview of the happiness literature.)
• Boskin, Michael J., Ellen R. Dulberger, Robert J. Gordon, Zvi Griliches, and Dale W. Jorgenson. 1997. The CPI Commission: Findings and Recommendations. American Economic Review 87 (2):78-83. (This paper will be read for Homework #1.)
• Summers, Robert, and Alan Heston. 1991. The Penn World Table (Mark 5): An Expanded Set of International Comparisons, 1950-1988. Quarterly Journal of Economics 106 (2):327-68. (A summary of the most widely used set of international data on GDP. Current update of dataset is available at http://pwt.econ.upenn.edu/).

Homework #1: Due September 11

2. Economic Growth

September 9 and 11: Solow Growth Model

• Burda and Wyplosz, Chapter 3.

September 14 and 16: Convergence and Endogenous Growth

• Burda and Wyplosz, Chapter 4.
• Sala-i-Martin, Xavier. 1997. I Just Ran Two Million Regressions. American Economic Review 87 (2):178-83.
• Romer, Paul M. 1994. The Origins of Endogenous Growth. Journal of Economic Perspectives 8 (1):3-22.

Homework #2: Due September 18

3. Equilibrium in the Long Run

September 18, 21, and 23: The Aggregate Labor Market and Unemployment

• Burda and Wyplosz, Chapter 5.
• Ritter, Joseph A., and Lowell J. Taylor. 1997. Economic Models of Employee Motivation. Federal Reserve Bank of St. Louis Review 79 (5):3-21.
• Rocheteau, Guillaume. 2006. Understanding Unemployment. Federal Reserve Bank of Cleveland Economic Commentary, October 15.
• Nickell, Stephen, Luca Nunziata, and Wolfgang Ochel. 2005. Unemployment in the OECD since the 1960s: What Do We Know? Economic Journal 115 (500):1-27.

Homework #3: Due September 25

September 25 and 28: Money and Prices in the Long Run

• Burda and Wyplosz, Chapter 6.

September 30: Mid-Term Exam #1

4. Expenditures in the Short Run

October 2 and 5: Budget Constraints

• Burda and Wyplosz, Chapter 7.
• Modigliani, Franco, and Merton H. Miller. 1958. The Cost of Capital, Corporation Finance and the Theory of Investment. American Economic Review 48 (3):261-297.(The original exposition of the Modigliani-Miller Theorem.)
• Barro, Robert J. 1974. Are Government Bonds Net Wealth? Journal of Political Economy 82 (6):1095-1117. (The original exposition of the Ricardian Equivalence Theorem.)

October 7 and 9: Consumption and Investment Spending

• Burda and Wyplosz, Chapter 8.
• Keynes, John Maynard. 1936. The General Theory of Employment, Interest and Money. New York: Harcourt, Brace, Chapters 8-12.
• Friedman, Milton. 1957. A Theory of the Consumption Function. Princeton, N.J.: Princeton University Press. (The original exposition of the permanent-income hypothesis.)
• Ando, Albert, and Franco Modigliani. 1963. The Life-Cycle Hypothesis of Saving: Aggregate Implications and Tests. American Economic Review 53 (1):55-84.

5. Money and Short-Run Equilibrium in a Closed Economy

October 12 and 14: Money and Monetary Policy

• Burda and Wyplosz, Chapter 9.
• O'Brien, Yueh-Yun C. 2007. Measurement of Monetary Aggregates across Countries. Washington, D.C.: Board of Governors of the Federal Reserve System, Finance and Economics Discussion Series, No. 2007-2. (Look at this to get an idea of how money is measured in many countries.)

Homework #4: Due October 14

October 16 and 26: Demand-Side Short-Run Equilibrium

• Burda and Wyplosz, Chapter 10.

Homework #5: Due October 30

6. Short-Run Equilibrium in an Open Economy

October 28, 30, November 2: Open-Economy Models

• Burda and Wyplosz, Chapter 11.

Homework #6: Due November 6

7. Aggregate Supply and the Phillips Curve

November 4 and 6: Aggregate Supply in the Closed Economy

• Burda and Wyplosz, Chapter 12.
• Phillips, A.W. 1958. The Relation between Unemployment and the Rate of Change of Money Wage Rates in the United Kingdom, 1961-1957. Economica 15 (99):283-299.
• Friedman, Milton. 1968. The Role of Monetary Policy. American Economic Review 58 (1):1-17.

November 9: Aggregate Supply and Demand in the Open Economy

• Burda and Wyplosz, Chapter 13.

November 11: Mid-Term Exam #2

8. Asset Markets and Exchange Rates

November 13 and 16: Asset Markets

• Burda and Wyplosz, Chapter 14.

Homework #7: Due November 20

November 18 and 20: Exchange Rates

• Burda and Wyplosz, Chapter 15.

9. Macroeconomic Policy

November 23 and 25: Demand-Side Stabilization Policies

• Burda and Wyplosz, Chapter 16.

November 30: Fiscal Policy, Deficits, and Debt

• Burda and Wyplosz, Chapter 17.
• Sargent, Thomas J. 1982. The Ends of Four Big Inflations. In Inflation: Causes and Effects, ed. by R. E. Hall, Chicago: National Bureau of Economic Research and University of Chicago Press.

Homework #8: Due December 4

December 2: Growth Policies

• Burda and Wyplosz, Chapter 18.

December 4: The International Monetary System

• Burda and Wyplosz, Chapter 19.

December 7 and 9: The Great Recession of 2007-09

• Readings to be announced.

Final Exam: TBA (probably Tuesday, December 15, 6-9pm)