Macroeconomics– 3.
2005-2006
Victor Polterovich, Natalya Volchkova
Course syllabus
Macroeconomics-3 is the first part of the obligatory graduate coursework for Masters degree. Macro-3 consists of 14 lectures and 7 seminars. Primary course objective – to master common models macroeconomics and elements of monetary theory.
Problem sets will comprise 30% of the final grade and the exam will account for 70%.
1. INTRODUCTION: problems and methods in modern macroeconomics.
(В), ch.1.
2. GROWTH ACCOUNTING. SOLOW MODEL
Basic Solow model; steady state, stability, comparative statics. Drawbacks of the model. Growth model with human capital.
(R), ch.1, ch. 3, p.126-140
(BS) ch. 1, p.14-56
(А), ch.7, p.68-72
3. SAVINGS, INVESTMENT AND GROWTH. RAMSEY MODEL
Ramsey model of optimal economics growth. , definition of solution, transversally condition. Keynes-Ramsey rule. Steady states, stability. Budget constraint in continuous time. No-Ponzi-game condition. Decentralized Ramsey model. Effectiveness and equilibrium paths.
Government in decentralized model. Ricardian equivalence. Capital income taxation. Investment and saving in an open economy. Tobin's q. Impact of production shocks.
(В), ch.2;
(А), p. 72-75.
(R), ch.2, p.47-75
(BS) ch.2, p.59-92, ch.3 p.96-101
4. ENDOGENOUS GROWTH THEORY
Relaxing decreasing return to scale in production assumption. AK model of growth. Growth model with governmental public good provision. Comparison with results of Solow model.
(BS) ch. 4, p.140-144, p.152-167
5. OVERLAPING GENERATIONS MODEL (OLG)
Model statement. Steady states and stability. Optimality conditions of equilibrium paths. OLG, finite time horizon and planning problem. Effect of delayed consumption.
Bequests in OLG. Social security and capital accumulation.
(В), ch. 3, p. 91- 114
(R), ch. 2, p.72 –85
(BS) ch. 3, p.128-135
6. MONETARY ECONOMICS
Functions of money. Neutrality and Superneutrality of money. Superneutrality in OLG. Superneutrality of money in Sidrausky model. Optimal quantity of money, Fridman rule.
(В), ch. 4, 154- 168, 188- 201
LITERATURE
(В) Blanchard, O.J. and S.Fisher (1992). Lectures on Macroeconomics. Cambridge, MA.: MIT Press.
( R ) Romer, D. (1996). Advanced Macroeconomics. New-York : McGraw-Hill.
A. Azariadis, C. (1993). Intertemporal Macroeconomics. Cambridge, MA: Blackwell.