Macro II part by John Hassler

The teachers: will be John Hassler and Sergio de Ferra.

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

TA sessions: will be taught by Gualtiero Azzalini gualtiero.azzalini@iies.su.se. He 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%).

Classes will be held via Zoom

1.      Tuesday April 7, 10-12,          https://stockholmuniversity.zoom.us/j/639664148

2.      Wednesday April 8, 10-12,     https://stockholmuniversity.zoom.us/j/385652930

3.      Tuesday April 14, 10-12,        https://stockholmuniversity.zoom.us/j/752275709

4.      Thursday April 16, 10-12        https://stockholmuniversity.zoom.us/j/760190258

5.      Friday April 17, 10-12            https://stockholmuniversity.zoom.us/j/373062316

6.      Monday April 20, 10-12         https://stockholmuniversity.zoom.us/j/686922819

I will publish slides here for the classes as we go along. They will be similar to previous years.

Slides 1

Slides 2

Slides 3

Slides 4

Slides 5

Slides 6

Slides 7

Slides 8

 

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.

 

 

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)

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

·         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)

·         King, R, C. Plosser and S. Rebelo, “Production, growth and business cycles: I. The basic neoclassical model”, Journal of Monetary Economics, 1988. (PDF)

·         Boppart Timo and Per Krusell, "Labor supply in the past, present and future: a balanced-growth perspective”, Journal of Political Economy 2019 forthcoming, (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)

·         Broer, Tobias, Harbo Hansen, Niels-Jakob, Krusell, Per and Öberg, Erik, The New Keynesian Transmission Mechanism: A Heterogenous-Agent Perspective, Review of Economic Studies, 2019, Fortcoming. (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)