ECONOMICS 840
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 the emphasis on economic
fluctuations. The class begins with the consumption and investment behaviors as the cores
of fluctuations in output. Later, the base line real business cycle theory and deviations
from the competitive equilibrium are discussed.
Texts:
Required:
David Romer, Advanced Macroeconomics, 3rd 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
65%
Topics:
I. A Prelude to Economic Growth and Fluctuations
Reading lists:
Romer, D. (2001), Advanced Macroeconomics, sections 4.1 and 4.2.
Blanchard, O. and S. Fischer (1989), Lectures on Macroeconomics, sections 1.1 and 6.1.
Cooley, T. (1995), Frontiers of Business Cycle Research, Chapter 1, sections 1-3.
-2II. Consumption Theories
Reading lists:
Romer, D. (2001), Advanced Macroeconomics, Chapter 7.
Campbell, J. and G. Mankiw (1989), “Consumption, 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.
III. 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), Lectures 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 Cycle 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 Economic
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), “Business Cycle in International Perspective,” Journal of
Economic Perspectives 13, pp. 45-68.
V. RBC and Shocks
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 Loungani (1992), “Role of Energy in Real Business Cycle,” Journal of Monetary
Economics 29, pp. 173-190.
-3Evans, C. (1992), “Productivity Shocks and Real Business Cycles,” Journal of Monetary
Economics 29, pp. 191-208.
Blanchard, O. and S. Fischer (1989), Lectures on Macroeconomics, 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 Inflation Tax in a Real Business Cycle Model,”
American Economic Review 79, pp. 733-748.
VIII. Deviations 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 Macroeconomic 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.