Macro II part by John Hassler

The teachers: will be John Hassler and Karl Walentin.

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

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

Examination: the final grade is determined based on homeworks (20%) and on an exam (80%).

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. They will be similar to previous years.

More to come

1. Business Cycles

a) Business Cycle Facts

Trends vs. Cycles, Co-movements, VAR

Readings:

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

· Stock, J., and M. Watson. "Vector Autoregressions." JEP 15, no. 4 (Fall 2001): 101-115. (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)

· "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”, mimeo, IIES (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)