723 Economics Instructors
Macroeconomic Theory I
http://socserv.mcmaster.ca/letendre/723/
Fall 2008
Marc-Andr Letendre e Kenneth Taylor Hall, Room 433 [e-mail] 905-525-9140 x23817 Oce Hours: Wednesday 2:30-4:30pm or by appointment Course Description
Alok Johri Kenneth Taylor Hall, Room 434 [e-mail] x23830 To be announced
This course is an introduction to advanced macroeconomic theory. The focus of the course is mainly on models with explicit microeconomic foundations. The topics covered include the life-cycle model, economic growth, economics uctuations, asset pricing, open-economy, and scal policies. Note: The course includes a very limited discussion of models with money. Students interested in monetary economics are strongly encouraged to register in the course Monetary Economics (ECON 741) oered in the Fall term.
Lectures and Tutorials We meet on Monday 1:30-2:50pm and Friday 10:30-11:50. Each lecture will last approximately eighty minutes. In addition, six times times during the term, there will be nonoptional tutorials. During these tutorials, the teaching assistant will solve practice questions in front of the class. Unless otherwise indicated, these tutorials will take place on Friday in KTH 334 from 1:30-2:50pm on the following dates: 26 September, 3 October, 24 October, 31 October, 21 November, and 28 November. The questions to be covered in the tutorials will be announced in class in the week prior to the tutorial and are posted on the course web page (the internet address is at the top of this page). The course web site lists many practice questions (most of them with solutions). I strongly encourage students to work out as many exercises as possible and to attempt to solve beforehand the questions covered in the tutorials. Those practice questions are a very good way to learn and to prepare for the term tests and nal exam. The reading list for the course is posted on the course web site. Students are expected to have read the relevant material before the lectures. I strongly encourage students to ask clarifying questions during the lectures and oce hours.
1
Assessment The assessment for this class consists of two term tests (80 minutes each) and a nal exam (3 hours). The grade for the course will be calculated using either one of the two schemes described below, depending on the scheme that is most advantageous for each student: Scheme A Scheme B Preparatory math exam 10% 10% Better term test 25% 5% Poorer term test 15% 5% Final exam 50% 80% If a student misses one of the two term tests for a reason deemed reasonable by the instructor, the weight of that test in the calculation of the total grade will be transferred to the nal exam. If a student fails to provide a satisfactory reason for missing a term test or exam, he/she get will the mark zero for that test. Note that there will be no make-up term tests. The rst term test is scheduled for October 10th, 2008, 10:30-11:50am. Location to be announced. The second term test is scheduled for November 7th, 2008, 10:30-11:50am. Location to be announced. The date and time for the nal exam will be announced later in the term. Method of evaluation for tests and nal exam: primarily problem-solving questions, short-answer questions, numerical calculations and mathematical derivations/proofs; secondarily true-false-justify questions. Students who want to audit the course must ask permission to the instructor. Please read the statement on Academic Dishonesty on the last page of this outline.
2
Course Material There is no required material to purchase. The required readings are taken from: Gregor W. Smith, MAcroeconomics lecture notes, August 1999 edition1 . Robert G. King and Sergio T. Rebelo, 2000, NBER working paper 75341 . Lars Ljungqvist and Thomas J. Sargent, 2004, Recursive macroeconomic theory 2nd edition, MIT Press2 . David Romer, 2006, Advanced macroeconomics, 3rd edition, McGraw-Hill3 . Thomas J. Sargent, 1987, Dynamic macroeconomic theory, Harvard University Press3 . Other relevant sources are: Rodolfo E. Manuelli and T.J Sargent, 1987, Exercises in dynamic macroeconomic theory, Harvard University Press3 . Maurice Obstfeld and Kenneth Rogo, 1997, Foundations of international macroeconomics, MIT Press3 . Notes: (1) Available electronically from the course web page. (2) Available as an electronic resource from the librarys web site. (3) Are/will be on reserve in Innis Library (ground oor of KTH)
Topics Outline 1. Introd...