Année universitaire 2013/2014
Collège universitaire
Semestre de printemps
Intermediate Macroeconomics
Zsofia Barany
Syllabus
Programme des séances (contenu et objectifs pédagogiques) :
This is a second year course in macroeconomics, which is aimed for students who have a deeper interest in
macroeconomics. The course starts by reviewing the key facts and ideas that will be useful throughout the course. We
then move on to two important topics in macroeconomics – economic growth and the labor market. Finally, we analyze
consumption decisions, paying particular attention to expectations about the future, and their effect on aggregate
outcomes.
The course largely follows Williamson’s book “Macroeconomics: International Edition” (4th or 5th edition). The chapter
numbering in the reading list is based on the 4th edition.
The course consists of weekly 2-hour lectures (altogether 12) and 6 tutorials. Attendance at the lectures is compulsory,
while the tutorials are optional. Each lecture is accompanied by a problem set, the solutions of which are discussed
during the tutorials. There are two group assignments to be handed in and marked, and will count towards 50% of the
final grade (25% each). Both group assignments involve downloading, and working with data. The work has to
demonstrate the ability to present the data in a readable format, and the ability to analyze the data.
There is a final exam which makes up the remaining 50% of the final grade.
Course Introduction & Measurement (Week 1)
Topics: - Introduction
- Measures of GDP and discussion of other factors that are left out by GDP measures;
- Decomposition of GDP changes into trend and business cycles
Required reading: Williamson chapter 1 & 2
Additional reading: - The Economist (2009): Measuring what matters
- The Economist (2011): Lies, flame-grilled lies and statistics
- The Economist (2011): Beefed-up burgernomics
Economic Growth (Weeks 2-5)
Topics: - Key growth facts
- A Malthusian model of stagnation in output per capita prior to the 19th century
- The Solow model of growth in output per capita since the industrial revolution
- Reasons why growth economics has gone beyond the Solow model: growth accounting and income accounting
- Three classes of endogenous growth models: learning-by-doing, human capital accumulation, R and D
Required reading: Williamson chapter 6 & 7
Background reading: Blanchard et al. chapters 11–13
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Additional reading: The Economist (2009): Falling fertility
The Economist (2009): Go forth and multiply a lot less
Lucas (1990): Why Doesn't Capital Flow from Rich to Poor Countries?
Baumol (1990): Entrepreneurship: Productive, Unproductive, and Destructive
Olson (1996): Big Bills Left on the Sidewalk: Why Some Nations are Rich, and Others Poor
Lucas (2000): Some Macroeconomics for the 21st Century
The Economist (2011): Catching up is so very hard to do
The Economist (2013): Has the ideas machine broken down?
Static General Equilibrium Macro Model (Weeks 6-7)
Topics: - Labor supply determination through the utility maximization of a representative consumer
- Labor demand determination through the profit maximization of a representative firm
- Competitive equilibrium and Pareto efficiency
- Business cycle measurement and business cycle facts
- The effects of changes in government spending and productivity in the static model
Required reading: Williamson chapter 3, 4 & 5
Additional reading: Weintraub (1992): Neoclassical Economics
The Economist (2008): Redefining recessions
Unemployment (Week 8)
Topics: - Key labor market facts
- An efficiency wage model of unemployment resulting from information and incentive problems
- A search model of unemployment based on search frictions
Required reading: Williamson chapter 17
Additional reading: The Economist (2011): Winners and losers
The Economist (2011): The great mismatch
Consumption-Saving Over Time (Weeks 9-10)
Topics: - A simple two-period model that focuses on consumers.
- Consumption and saving determination through the utility maximization of a representative consumer who cares
about both the present and the future
- The role of government in the two-period model and Ricardian Equivalence
- Credit market imperfections – asymmetric information and limited commitment – link to the financial crisis
- Social security programs – pay-as-you-go and fully funded programs
Required reading: Williamson chapter 8 & 9
Background reading: Blanchard et al. chapter 16
Additional reading: The Economist (2009): From Ozzie to Ricky
Investment (Week 11)
Topics: - A simple two-period model of firms
- Firms that care about profits both in the present and the future undertake investment decisions
Required reading: Williamson chapter 10
Background reading: Blanchard et al. chapter 16
A Dynamic Micro-founded Macroeconomic Model (Week 11-12)
Topics: - A closed-economy two-period macroeconomic model that incorporates labor supply, consumption, savings and ]
investment choices
- Effects of macroeconomic shocks on the economy
Required reading: Williamson chapter 10
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Présentation des modalités d’évaluation :
There are two graded group assignments, to be handed in, each contributing 25% to the final grade. Both group
assignments involve downloading, and working with data. The work has to demonstrate the ability to present the data in a
readable format, and the ability to analyze the data. After the lectures are over, there is a final exam, which contributes
30% to the final grade.
Références bibliographiques :
Main textbook: Williamson: Macroeconomics: International Edition (4th or 5th edition), Pearson
Useful background reading: Blanchard, Amighini, and Giavazzi: Macroeconomics: A European Perspective, Prentice Hall
For additional readings see the topics above.
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