Download ECON 7020-001 Macroeconomic Theory I

ECONOMICS 7020
Fall 1989
Introductory Macroeconomics
Bill Kaempfer
Econ 115, x24486
Office Hours:
Computer Mail Address: CUBLDR::KAEMPFER_W
Required Textbooks:
William H. BRANSON, Macroeconomic Theory and Policy, 3rd Ed. Harper and Row, 1989.
Bernhard FELDERER and Stefan HOMBURG, Macroeconomics and New
Macroeconomics, Springer-Verlag, 1987.
Optional Background Textbooks (not ordered at any bookstore):
William M. SCARTH, Macroeconomics: an Introduction to Advanced Methods, Harcourt
Brace Jovanovich, 1988.
Thomas M. HAVRILESKY and John T. BOORMAN, Money Supply, Money Demand and
Macroeconomic Models, 2nd Ed. Harlan Davidson, Inc., 1982.
Examinations and grading:
Three midterm exams will be given at approximately the end of each month. Exams will be
given during extended class hours. Time and place will be announced. Each exam will have two
questions and each question will take approximately one hour to answer. The final examination
is scheduled to be held on Tuesday, December 19 from 7:30 p.m. until 10:30 p.m. The final will
be comprehensive and will have three questions.
In general, this course does not require a great deal of reading. However, I expect you to
actually read all of the below assignments.
Over the course of the semester, a review of the mathematical appendices provided by
Felderer and Homburg as well as Branson is also a good idea.
Outline of Topics
Fall 1989
Assignment
9-19
9-21
9-26
9-28
Introduction
Microfoundations: Production, Labor Supply and Saving
The Classical Model: Markets and Equilibrium
Consumption: Life Cycle Hypothesis
Consumption: Permanent Income Hypothesis
Investment Theory
Demand for Money
Portfolio Balance Model
EXAM 1
10-3
10-5
10-10
10-12
10-17
10-19
10-24
10-26
10-31
11-2
Goods and Money Market Equilibrium
Cramer's Rule Applications
Labor Markets and Aggregate Supply
Keynesian Equilibrium
Sticky Wages
Equilibrium Unemployment
Exogenous Shocks
Policy Shocks
Monetarism and the Pigou Effect
EXAM2
8-31
9-5
9-7
9-12
9-14
11-7
11-9
11-14
11-16
11-21
11-28
11-30
12-5
12-7
12-12
12-19
· Expectations Models
Phillips Curves
Rational Expectations
The Government Budget Constraint, Part 1
The Government Budget Constraint, Part 2
Open Economy Macroeconomics, Part 1
Open Economy Macroeconomics, Part 2
EXAM3
Neokeynesian Macroeconomics, Part 1
Neokeynesian Macroeconomics, Part 2
FINAL EXAM
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Reading Assignments:
I. Microfoundations and the Classical Model
A. Introduction
Felderer and Homburg, Part One (1-16)
Branson, Chs. 1-3
B. Microfoundations
Felderer and Homburg, Ch. IV (17-21)
C. Classical Equilibrium
Felderer and Homburg, Ch. IV (22-29)
II. Sectoral Behavior
A. Consumption Theory
Branson, Ch. 12, pp. 239-266
Felderer and Homburg, Ch. V (30-33)
Modigliani and Brumberg, "Utility Analysis and Consumption"
Friedman, "The Permanent Income Hypothesis"
B. Investment
Branson, Ch. 13, pp. 285-314
Felderer and Homburg, Ch. V (34,38)
- Jorgenson, "The Theory of Investment Behavior"
C. Money Demand
Branson, Ch. 14
Felderer and Homburg, Ch. V (37)
Felderer and Homburg, Ch. VIII (63-65)
Tobin, "Liquidity Preference as Behavior Toward Risk"
III. The Keynesian Model
A. The Aggregate Demand Model
Branson, Chs. 4 and 5
Felderer and Homburg, Ch. V (35-36, 39)
B. Labor Markets and the Supply Side
Branson, Chs. 6 and 7
C. The Keynesian Equilibrium
Branson, Ch. 8
Felderer and Homburg, Ch. V (40-42)
IV. Keynesian Model Adjustment
A. Sticky Wages and Unemployment
Branson, Ch. 10
Felderer and Homburg, Ch. V (43-45)
B. Adjustment to Shocks
Branson, Ch. 9
Felderer and Homburg, Ch. VI (46-58)
Scarth, pp. 40-45
C. Real Balance Effects
Branson, Ch. 12, pp. 276-283
Felderer and Homburg, Ch. VII (59-62)
D. Monetarism
Felderer and Homburg, Ch. IX ( 66-69)
V. Additional Topics
A. Expectations
Branson, Ch. 11 and Ch. 12, pp. 266-276
Felderer and Homburg, Ch. X (70-75)
Humphrey, "Some Recent Developments in Phillips Curve Analysis"
B. )'he Government Budget Constraint
Branson, Ch. 16
Scarth, pp. 102-107
Meyer, "Financing Constraints and the Short-Run Response to Fiscal Policy"
C. Open Economy Macroeconomics
Branson, Ch. 17
D. NeoKeynesian Models
Branson, Ch. 18
Felderer and Homburg, Ch. XI (76-83)
Winetraub, "The 4827th Reexamination of Keynes' System"