Economics @ LMH

Economic Theory: Macroeconomic Theory


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Readings and questions for my economic theory lectures (the lecture notes can be viewed either as web-pages or as pdf files):

Lecture 1: ENDOGENOUS GROWTH MODELS

pdf

Readings
Barro, R. and Sala-i-Martin, X. (1995) Economic Growth New York: McGraw-Hill.
Jones, C. (1998) Introduction to Economic Growth, New York: Norton. Ch. 3 to 6.
Jones, C. (1999) "Growth: With or Without Scale Effects?" American Economic Review Papers and Proceedings, 89, 139-144.
Jones, C. and Williams, J. (1998) "Measuring the Social Return to R&D" (with John Williams), Quarterly Journal of Economics, 113, 1119-1135.
Proudman, J. and Redding, S. (1998), Openness and Growth, London: Bank of England. Ch. 3 & 6.
Romer, D. (1996), Advanced Macroeconomics, New York: McGraw Hill. Ch. 3.
Romer, P. (1994) "The Origins of Endogenous Growth", Journal of Economic Perspectives, Winter, 3-22. (SV26)
Romer, P. (1986) "Increasing Returns and Long-Run Growth", Journal of Political Economy, 94, 1002-37.
Romer, P. (1990) "Endogenous Technological Change", Journal of Political Economy, 98 (part 2), 71-102.

(Note: readings marked SVx are available as chapter x in Snowden and Vane (1997), A Macroeconomics Reader, London: Routledge)

Questions

  1. Are endogenous growth models which explicitly incorporate R&D superior to ones based simply on factor accumulation? (1999)
  2. "The Solow model, so long as it is augmented to include human capital, remains the most satisfactory model of economic growth." Discuss. (1998)
  3. What factors might influence the growth rate of an economy? When might the size of an economy affect the rate at which it grows? (1997)
  4. Is economic growth likely to occur at a socially efficient rate? Could growth ever be too fast? (1996)
  5. Are increasing returns to scale important in modelling economic growth succesfully? (1995)

Lecture 2: INVESMENT

pdf

Readings
Romer, D. (1996), Advanced Macroeconomics, New York: McGraw Hill. Chapter 8.
Hayashi, F. (1982), "Tobin's Marginal q and Average q: A Neoclassical Interpretation", Econometrica, 50, 213-24.
Abel, A.B. (1982), "Dynamic Effects of Permanent and Temporary Tax Policies in a q Model of Investment", Journal of Monetary Economics, 9, 353-73.
Bernanke, B.S. (1983), "Irreversibility, Uncertainty and Cyclical Investment", Quarterly Journal of Economics, 98, 85-106.
Dixit, A. and R.S. Pindyck (1994), Investment Under Uncertainty, Princeton: Princeton University Press. Chapters 1 and 2.

Lecture 3: REAL BUSINESS CYCLES

pdf

Readings
Romer, D. (1996), Advanced Macroeconomics, New York: McGraw Hill. Chapter 4.
Blanchard, O., and Fischer, S. (1989), Lectures on Macroeconomics, Cambridge, Mass: MIT Press. Chapter 7.
Prescott, E.C. (1986), "Theory Ahead of Business Cycle Measurement", Federal Reserve Bank of Minneapolis Quarterly Review, Fall, 9-22. (SV15) (HHS4)
Summers, L.H. (1986), "Some Skeptical observations on Real Business Cycle Theory", Federal Reserve Bank of Minneapolis Quarterly Review, Fall, 23-27. (SV16) (HHS5)
Plosser, C.I. (1989), "Understanding Real Business Cycles", Journal of Economic Perspectives, Summer, 51-77. (SV17)
Mankiw, N.G. (1989), "Real Business Cycles: A New Keynesian Perspective", Journal of Economic Perspectives, Summer, 79-90. (SV18)
Muellbauer, J. (1997) "The Assessment: Business Cycles" in Oxford Review of Economic Policy, pp. 219-235.
Stadler, G. (1994) "Real Business Cycles", Journal of Economic Literature, pp. 1750-1783.

(Note: readings marked SVx are available as chapter x in Snowden and Vane (1997), A Macroeconomics Reader, London: Routledge)

(Note: readings marked HHSx are available as chapter x in Hartley, Hoover and Salyer (1998), Real Business Cycles: A Reader, London: Routledge)

Questions

  1. Are the stylised facts about business cycle fluctuations consistent with an individual optimising behaviour? (1999)
  2. "Prolonged recessions are the result of coordination failures." "Unemployment can only persist if it is in the mutual interests of optimising agents." Discuss. (1998) [Overlaps with lecture 4]
  3. Are supply shocks the main source of business cycles? (1995)

Lecture 4: NEW KEYNESIAN ECONOMICS

pdf

Readings
Romer, D. (1996), Advanced Macroeconomics, New York: McGraw Hill. Chapter 6 Part C.
Mankiw, N.G. and D. Romer (1995), "Introduction", in N.G. Mankiw and D. Romer (eds.) New Keynesian Economics, Cambridge, Mass: MIT Press. 1-26 (NKE).
Mankiw, N.G. (1985), "Small Menu Costs and Large Business Cycles: A Macroeconomic Model of Monopoly", Quarterly Journal of Economics, 100, 529-39. (NKE1)
Mankiw, N.G. (1992), "The Reincarnation of Keynesian Economics", European Economic Review, 36, 559-65. (SV19)
Greenwald, B. and J. Stiglitz (1993), "New and Old Keynesians", Journal of Economic Perspectives, Winter, 23-44. (SV22)
Cooper, R. and John, A. (1988) "Coordinating Coordination Failures in Keynesian Models", Quarterly Journal of Economics, 103, 441-463. (NKE 16)

(Note: readings marked SVx are available as chapter x in Snowden and Vane (1997), A Macroeconomics Reader, London: Routledge)

Questions

  1. "New Keynesian Economics is simply a repackaging of the old idea that nominal rigidities in an economy will generate a role for government policy" Discuss (1999)
  2. "Prolonged recessions are the result of coordination failures." "Unemployment can only persist if it is in the mutual interests of optimising agents." Discuss (1998) [Overlaps with lecture 3]
  3. Can rigid nominal wages best be explained as focal points in the wage bargaining process? (1998)
  4. Why might firms' inability to monitor wages lead them to set an efficiency wage? Do efficiency wage arguments help in explaining the existence of unemployment? (1997)
  5. Are there reasons why wages might vary less and employment might vary more than the competitive paradigm would predict? (1995)

Click here for the Oxford Economics Dept web-page for this paper.

 
 

Last updated: 25 October 2004. 
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