Macro I S17 part by John Hassler

The teachers: will be Inge van den Bijgaart, John Hassler and Per Krusell.

Course purpose: building a base for understanding and doing macroeconomic research, emphasizing theory and associated quantitative applications.

TA sessions: will be taught by Karin Kinnerud and Markus Karlman. They will discuss homework solutions as well as analyze a variety of models that complement the material taught in class.

Preliminary reading list for the part of Macro II given by John Hassler.

Articles and chapters marked with an asterisk (*) may be read less intensively than the others.

I will publish slides here for the classes as we go along.

Slides 3’

1. Business Cycles

a) Business Cycle Facts

Trends vs. Cycles, Co-movements, VAR

Readings:

· Chapter 10:1-2 in Per Krusell’s lecture notes

· Hansen, G and L Ohanian, “Neoclassical Models in Macroeconomics”, Chapter 22 in Handbook of Macroeconomics. Vol 2B (Especially section 1-3).(PDF)

· Stock, J., and M. Watson. "Business Cycle Fluctuations in U.S. Macroeconomic Time Series." Chapter 1 in Handbook of Macroeconomics. Vol 1A. Edited by J. Taylor and M. Woodford. Amsterdam; New York: North Holland, 1999. ISBN: 0444501568. (PDF)

· *Ravn, M. and H. Uhlig, “On Adjusting the Hodrick-Prescott Filter for the Frequency of Observations”, Review of Economics and Statistics, May 2002, v. 84 (PDF)

· *Hassler et al., (1992), “The Swedish Business Cycle: Stylized facts over 130 years.”, Appendix 2-3, IIES Monograph series, No 22. (PDF)

b) The RBC model with endogenous labor supply

Model setup and solution, Calibration, Does it fit the facts?

Readings:

· Chapter 8+10 in Per Krusell’s lecture notes

· Prescott, E. C. "Theory Ahead of Business Cycle Measurement." Quarterly Review 10, no. 4 (Fall 1986): 9-22. (PDF)

· Prescott, E., “RBC Methodology and the Development of Aggregate Economic Theory”, Chapter 22 in Handbook of Macroeconomics. Vol 2B (Especially section 1-3).(PDF)

· *"Finn Kydland and Edward Prescott’s Contribution to Dynamic Macroeconomics." Advance Information on the Bank of Sweden Prize in Economic Sciences, 2004 (PDF)

· * “Empirical Macroeconomics - Tomas J. Sargent and Christopher A. Sims”, Scientific Information on the Bank of Sweden Prize in Economic Sciences 2011, (PDF)

· *Boppart Timo and Per Krusell, "Labor supply in the past, present and future: a balanced-growth perspective”, NBER WP 22215 (PDF)

· *King, R., and S. Rebelo. "Resuscitating Real Business Cycles." Chapter 14 in Handbook of Macroeconomics. Vol. 1B. Edited by J. Taylor and M. Woodford. Amsterdam, Netherlands, New York, NY, North Holland, Netherlands: Elsevier, 1999, pp. 927-1007. ( PDF)

· *David N. DeJong & Chetan Dave, “Structural Macroeconometrics”, (Second Edition), Princeton University Press, (PDF)

c) New Keynesian models

Model setup and solution, applications.

· Gali, Jordi, Chapter 3 in “Monetary Policy, Inflation and the Business Cycle”, Princeton University Press. (PDF)

· *Corsetti, Giancarlo and Gernot Müller, (2015) “Fiscal Multipliers: Lessons from the Great Recession for Small Open Economies”, paper for the Swedish Fiscal Policy Council.(PDF)

· *Gali, Jordi, “Monetary Policy, Inflation and the Business Cycle”, Princeton University Press.

· *Corsetti, Giancarlo (ed.), (2012), “Austerity, too much of a good thing?”, A VoxEU collection, (PDF)