Macroeconomics Theory II (EC 830) - phdecon@nida.ac.th

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ECONOMICS 84
0

Advanced Macroeconomics

School of Development Economics, NIDA

January

2009




Lecturer
:


Prasopchoke Mongsawad

Contact
:


Tel:
02
-
727
-
3197
, Email: mongsawad@yahoo.com


Office Hours
:


Mondays 10:00
-
12:00 pm, and 3
:00
-
6:00 pm,




Thursdays 4:
00
-
6
:00 pm, and by appointment


Course Description:



This course is
a sequel of the Macroeconomic

Theory

I with th
e emphasis
on
economic
fluctuations
.
The class begins with the consumption and investment behaviors as
the
cores

of fluctuations in

output. L
ater, the base line re
al business cycle theory and

deviation
s

from the competitive equilibrium are
discussed
.


Texts:

Required:

David Romer,
Advanced Macroeconomics
, 3
rd

edition, 2007,

McGraw
-
Hill.

Other Readingsmongsawad
:

Oliver J. Blanchard and Stanley
Fisher,
Lectures on Macroeconomics
,

1989, MIT Press.


Thomas Cooley (ed),
Frontiers of Business Cycle Research
, 1995,

Princeton University Press.


Dereze Jacques (ed),
Advances in Macroeconomic Theory
, 2003, Palgrave.



Grading:

Midterm

35
%

Final


6
5
%



Topics:


I. A Prelude to
Economic
Growth and Fluctuations

Reading lists:

Romer, D. (
2001
),

Advanced Macroeconomics
,
s
ections 4.1 and 4.2
.

Blanchard, O. and S. Fischer (1989),

Lectures on Macroeconomics
, sections 1.1

and 6.1.

Cooley, T. (1995),

Frontiers o
f Business Cycle Research
, Chapter 1
,

sections 1
-
3
.


-
2
-


II. Consumption Theories

Reading lists:

Romer, D. (
2001
),

Advanced Macroeconomics
, Chapter 7.

Campbell, J. and G. Mankiw (1989),

“Con
sumption, Income, and Interest
Rates:

Reinterpreting the Time Series

Evidence,”
NBER
Macroeconomics Annual

6,
pp.

319
-
333.

Mankiw, G. (1982),

“Hall’s Consumption Hypothesis and Durable Goods,”
Journal of

Monetary Economics

10,
pp.
417
-
425.

Blanchard, O. and S. Fischer (1989),

Lectures on Macroeconomics
,
section 6.2.



II
I. Investment Theories

Reading lists:

Romer, D. (
2001
),

Advanced Macroeconomics
, Chapter 8.

Caballero, R.

(1991), “On the Sign of the Investment
-
Uncertainty Relationship,”
American

Economic Review

81,
pp.
279
-
288.

Blanchard, O.

and S. Fischer (1989),
Lec
tures on Macroeconomics
,
section 6.3.



IV. Real Business Cycle Theory

Reading lists:

Romer, D. (
2001
),
Advanced Macroeconomics
, Chapter 4.

Cooley, T. (1995),
Frontiers of Business Cycle Research
, Chapter 1.

Prescott, E.

(1986), “Theory Ahead of Business C
ycle Measurement,”
Federal Reserve Bank
of Minneapolis Quarterly Review
,
pp.
9
-
22.

Sims, C.

(1996), “Macroeconomics and Methodology,”
Journal of
Economics Perspectives

10,
pp.
105
-
120.

Plosser, C. (1989), “Understanding Real Business Cycles,”
Journal of Ec
onomic
Perspectives

3, pp. 51
-
77.

Romer, C
. (1999), “Changes in Business Cycles: Evidence and

Explanations,”
Journal of
Economic Perspectives

13,
pp.
23
-
44.

Basu, S. and M. Taylaor (1999), “B
usiness Cycle in International
Perspective,”
Journal of

Economi
c Perspectives

13,
pp.
45
-
68.



V.
RBC and
Shock
s

Reading lists:

Christiano, L.

and M. Eichenbaum (1992),

“Current
-
Real
-
Business Theory
and Aggregate
Market Labor Fluctuation,”
American Economic
Review

82,
pp.
430
-
450
.

Kim and Lo
u
ngani (1992)
, “Role of En
ergy in Real Business Cycle,”

J
ournal of
M
onetary

E
conomics

29,
pp.
173
-
190.


-
3
-


Evans, C. (1992), “Productivity Shocks and Real Business Cycles,”
Journal of Monetary

Economics

29, pp. 191
-
208.


Blanchard, O.

and S. Fischer (1989),
Lectures on Macroeconomic
s
, Chapter 7.



VI.
RBC and
Money

Reading lists:

Cooley, T. (1995),
Frontiers of Business Cycle Research
, Chapter 7.

Cooley, T.

and G. Hansen (1989), “The In
flation Tax in a Real Business
Cycle Model,”

American Economic Review

79,
pp.
733
-
748.



VIII. De
viation
s

from Competitive Equilibrium

Model


Reading lists:

Mankiw, G.

(1986)
,

“The Allocation of Credit and Financial Collapse,”
Quarterly

Journal of
Economics

101,
pp.
455
-
470.

Mankiw, G. (1985)
,

“Small Menu Cost and Large Business Cycles: A

Macroeconomi
c Model

of Monopoly,”
Quarterly Journal of
Economics

100,
pp.
529
-
537.

Mankiw, G. (1989)
, “Real Business Cycles: A New Keynesian Perspective,”
Journal of

Economic Perspectives

3, pp. 79
-
90.

Gordon, R. (1990), “What is New
-
Keynesian Economics,”
Journal of

Economic Literature
28,
pp.
1115
-
1171.

Blanchard, O. and S. Fischer (1989),
Lectures on Macroeconomics
, Chapter 9.