Macroeconomic Theory
Code
2173
Academic unit
null
Department
null
Credits
3,5
Teacher in charge
Francesco Franco
Teaching language
English
Objectives
This course develops the core models of macroeconomics. Macroeconomics is an evolving field: new facts and research cause the emergence of new ideas and models or in some case the resurrection of old ideas and models. Macroeconomics is a vast discipline that can maybe best defined by the questions the field try to answer. Why countries grow ? Why is there heterogeneity in growth resulting in inequality across and within countries? Why there are cycles, crisis, boom and busts ? Why there is unemployment ? Why there is inflation? Are all these questions related? What is the role of economic policy ?.
Subject matter
The course covers the mainstream models used in macroeconomics: the neoclassical growth model, the overlapping generation model, the new Keynesian business cycle model.
Bibliography
The last edition of Advanced Macroeconomics by David Romer is the mandatory text. I add optional readings as the original sources are always extremely interesting.
PART I
Chapter II, pages 49-77
Cass David, Optimum Growth in an Aggregative Model of Capital Accumulation. Review of Economic Studies 32 (July): 233-240.
Koopmans Tjalling, On the Concept of Optimal Economic Growth. In The Economic Approach toEconomic Planning. Amsterdam: Elsevier.
Ramsey Frank, A Mathematical Theory of Saving. Economic Journal 38 (December 1928): 543-559.
PART II
Chapter II, pages 78-93
Diamond Peter, National Debt in a Neoclassical Growth Model American Economic Review 55 (December 1965): 1126-1150.
PART III
Chapter 4 and Chapter 7
Olivier Jean Blanchard and Nobuhiro Kiyotaki, Monopolistic Competition and the Effects of Aggregate Demand The American Economic Review Vol. 77, No. 4 (Sep., 1987), pp. 647-666.
Resources
The course will use a website and Moodle.
Teaching method
The syllabus is divided in three parts. Each of the part presents one of the model. The teaching material is based on one of the main intermediate macroeconomics leading textbook completed with class notes. There is a problem set for each of the three parts. That will be corrected in class (one class per each problem resolution).
Evaluation method
The Final Exam weight in the final is 55%. The remainder of the evaluation consists in class participation, 5%, and problem sets, 45%.