14.451: MACROECONOMICS I
Readings: Many of the readings for this course will come from Olivier Blanchard and Stanley Fischer, Lectures on Macroeconomics (henceforth BF), and from David Romer, Advanced Macroeconomics (henceforth DR). Purchase of both is suggested; otherwise, copies will be on reserve. Other readings will be contained either in the packet available from Graphic Arts, or posted on my website.
Syllabus: Here is an outline of the course, with the associated
1. Minimalist macroeconomics
"The world's smallest macro model", http://web.mit.edu/krugman/www/MINIMAC.html
P. Krugman, "Babysitting the economy", Slate, August 1998, http://web.mit.edu/krugman/www/babysit.html
2. Money demand and seignorage
BF, ch. 4, pp. 512-518
M. Obstfeld and K. Rogoff, Foundations of International Macroeconomics, pp. 515-530.
3. The IS-LM model
BF, pp. 529-536
Krugman, "Japan's trap", http://web.mit.edu/krugman/www/japtrap.html
"There's something about macro" http://web.mit.edu/krugman/www/islm.html
BF, pp. 537-542
Obstfeld-Rogoff, pp. 609-620
Krugman, "Japan: still trapped", http://web.mit.edu/krugman/www/japtrap2.html
5. Aggregate supply
BF, pp. 518-529, 542-555
N. G. Mankiw, "Small menu costs and large business cycles", QJE, May 1985.
J. Taylor, "Staggered wage setting in a macro model", AER May 1979.
6. Basic growth models
BF, ch. 2
DR, chs. 1 and 38-71
7. Overlapping generations
BF, ch. 3
8. Real business cycle models
BF, ch. 7
DR, ch. 4
9. Coordination failures and financial crises
D. Diamond and P. Dybvig, "Bank runs, deposit insurance, and liquidity", JPE, June 1983.
R. Chang and A. Velasco, "Financial crises in emerging markets: a canonical model", mimeo, 1998.
10. Empirical debates in macroeconomics
M. Mussa, "Nominal exchange regimes and the behavior of real exchange rates: evidence and implications", Carnegie-Rochester Series 25 (1986)
11. Policy issues