UNIVERSITY OF CALIFORNIA FALL
2014
Department of Economics Economics
202A
P.
Gourinchas/D. Romer
MACROECONOMICS
Main Textbook: David Romer, Advanced Macroeconomics, Fourth
Edition (New York: McGraw-Hill, 2012)
Part I: August
28 – October 14
GSI: Dominick Bartelme, office hours Th 2-3
P.M.
D. Romer office hours: W 1-3 P.M.
I. Introduction: Current Crises in
Macroeconomics
*David Romer, Advanced
Macroeconomics, fourth edition (New York: McGraw-Hill, 2012),
“Epilogue,” 644–648.
Carmen M.
Reinhart and Kenneth S. Rogoff, This Time is Different, Chapter 14, “The
Aftermath of Financial Crises” (Princeton: Princeton University Press, 2009),
223–239.
Ben S. Bernanke,
“Japanese Monetary Policy: A Case of Self-Induced Paralysis?” in Ryoichi
Mikitani and Adam S. Posen, eds., Japan’s Financial Crisis and Its Parallels
to U.S. Experience (Washington, D.C.: Institute for International
Economics, 2000), 149–166.
http://www.iie.com/publications/chapters_preview/319/7iie289X.pdf
*Lee E. Ohanian,
“The Economic Crisis from a
Neoclassical Perspective,” Journal
of Economic Perspectives 24 (Fall 2010), 45–66.
http://dx.doi.org/10.1257/jep.24.4.45
*Ricardo J.
Caballero, “Macroeconomics after the Crisis: Time to Deal with the
Pretense-of-Knowledge Syndrome,” Journal
of Economic Perspectives 24 (Fall 2010), 85–102.
http://dx.doi.org/10.1257/jep.24.4.85
*David Romer, Advanced
Macroeconomics, fourth edition, “Empirical Application: Is U.S.
Fiscal Policy on a Sustainable Path?” 590–592.
*Alan J.
Auerbach and William G. Gale, “Forgotten But Not Gone: The Long-Term Fiscal
Imbalance,” unpublished paper, March 2014.
http://eml.berkeley.edu/~auerbach/AG%2003-05-2014%20with%20Tables%20and%20Figures.pdf
II. The
Solow Model
*David Romer, Advanced Macroeconomics,
fourth edition, Chapter 1.
Robert M. Solow, “A Contribution to the
Theory of Economic Growth.” Quarterly Journal of Economics 70 (February
1956), 65–94.
http://www.jstor.org/stable/1884513
Robert E. Lucas, Jr., “Why Doesn’t
Capital Flow from Rich to Poor Countries?” American Economic Review 80 (May
1990), 92–96.
http://www.jstor.org/stable/2006549
J. Bradford DeLong, “Productivity
Growth, Convergence, and Welfare: Comment,” American
Economic Review 78 (December 1988): 1138–1154.
http://www.jstor.org/stable/1807174
John Fernald and Brent Neiman, “Growth
Accounting with Misallocation: Or, Doing Less with More in Singapore,” American Economic Journal: Macroeconomics
3 (April 2011): 29–74.
http://www.jstor.org/stable/41237142
Thomas Piketty, Capital in the Twenty-First Century, translated by Arthur
Goldhammer (Cambridge: Harvard University Press, 2014).
Thomas Piketty and Gabriel Zucman, “Capital
Is Back: Wealth-Income Ratios in Rich Countries,” 1700–2010, unpublished paper
(February 2014). Quarterly Journal of
Economics, forthcoming.
http://dx.doi.org/10.1093/qje/qju018
*Matthew Rognlie, “A Note on Piketty and
Diminishing Returns to Capital,” unpublished paper, M.I.T. (June 2014).
http://www.mit.edu/~mrognlie/piketty_diminishing_returns.pdf
III. The Ramsey-Cass-Koopmans Model and Dynamic
Optimization
*David Romer, Advanced Macroeconomics, fourth
edition, Chapter 2, Part A.
Robert J. Barro and Xavier Sala-i-Martin, Economic
Growth, second edition (Cambridge: MIT Press, 2004), Chapter 2 and Appendix
A.3 (at end of book).
Lars Ljungqvist
and Thomas J. Sargent, Recursive Macroeconomic Theory, second edition
(Cambridge: MIT Press, 2004), Chapter 3.
*Maurice
Obstfeld, “Dynamic Optimization in Continuous-Time Economic Models (A Guide for
the Perplexed),” unpublished paper, U.C. Berkeley, April 1992. http://www.econ.berkeley.edu/~obstfeld/ftp/perplexed/cts4a.pdf
Martin Weitzman,
Income, Wealth, and the Maximum Principle (Cambridge: Harvard University
Press, 2003).
IV. Overlapping Generations
*David Romer, Advanced Macroeconomics, fourth
edition, Chapter 2, Part B.
Paul A.
Samuelson, “An Exact Consumption Loan Model of Interest with or without the
Social Contrivance of Money,” Journal of Political Economy 66 (December
1958), 467–482.
http://www.jstor.org/stable/1826989
Peter A.
Diamond, “National Debt in a Neoclassical Growth Model,” American Economic
Review 55 (December 1965), 1126–1150.
http://www.jstor.org/stable/1809231
Olivier J.
Blanchard and Charles M. Kahn, “The Solution of Linear Difference Models under
Rational Expectations,” Econometrica 48 (September 1980), 1305–1311.
http://www.jstor.org/stable/1912186
Andrew B. Abel,
N, Gregory Mankiw, Lawrence H. Summers, and Richard J. Zeckhauser, “Assessing
Dynamic Efficiency: Theory and Evidence,” Review of Economic Studies 56
(January 1989), 1–20.
http://www.jstor.org/stable/2297746
Robert J. Barro,
“Are Government Bonds Net Wealth?” Journal of Political Economy 82 (November/December
1974), 1095–1117.
http://www.jstor.org/stable/1830663
Olivier J.
Blanchard, “Debts, Deficits, and Finite Horizons,” Journal of Political
Economy 93 (April 1985), 223–247.
http://www.jstor.org/stable/1832175
Jean Tirole,
“Asset Bubbles and Overlapping Generations,” Econometrica 53 (November
1985) 1499–1528.
http://www.jstor.org/stable/1911012
Weil, Philippe.
“Overlapping Generations: The First Jubilee.” Journal of Economic
Perspectives 22 (Fall 2008), 115–134.
http://www.jstor.org/stable/27648280
*Gauti B.
Eggertsson and Neil
R. Mehrotra, “A Model of Secular Stagnation,” unpublished paper, Brown
University (July 2014).
www.econ.brown.edu/fac/gauti_eggertsson/papers/Eggertsson_Mehrotra.pdf
V. Endogenous Growth Theory
*David Romer, Advanced Macroeconomics, fourth
edition, Chapter 3.
Paul M. Romer,
“Endogenous Technical Change,” Journal of Political Economy 98 (October
1990, Part 2), S71–S102.
http://www.jstor.org/stable/2937632
Robert E. Lucas,
Jr., “On the Mechanics of Economic Development,” Journal of Monetary
Economics 22 (July 1988) 3–42.
http://dx.doi.org/10.1016/0304-3932(88)90168-7
Charles I.
Jones, “Growth and Ideas,” in Philippe Aghion and Steven Durlauf, eds., Handbook
of Economic Growth, Volume 1B (Amsterdam: Elsevier, 2005), 1063–1111.
http://dx.doi.org/10.1016/S1574-0684(05)01016-6
*Charles I.
Jones, “Time-Series Tests of Endogenous Growth Models,” Quarterly Journal of Economics110 (May 1995), 495–525.
http://www.jstor.org/stable/2118448
*Michael Kremer,
“Population Growth and Technical Change: One Million B.C. to 1990,” Quarterly
Journal of Economics 108 (August 1993), 681–716.
http://www.jstor.org/stable/2118405
Oded Galor, Unified Growth Theory
(Princeton: Princeton University Press, 2011).
Robert J. Gordon, “Is U.S. Economic
Growth Over? Faltering Innovation Confronts the Six Headwinds,” NBER Working
Paper No. 18315 (August 2012).
http://www.nber.org/papers/w18315
VI. Cross-Country
Income Differences
*David Romer, Advanced Macroeconomics,
fourth edition, Chapter 4.
*Robert E. Hall, and Charles I. Jones, “Why
Do Some Countries Produce So Much More Output per Worker than Others?” Quarterly
Journal of Economics 114 (February 1999), 83–116.
http://www.jstor.org/stable/2586948
Peter J. Klenow and Andrés
Rodríguez-Clare, “The Neoclassical Revival in Growth Economics: Has It Gone Too
Far?” NBER Macroeconomics Annual 12 (1997), 73–103.
http://www.jstor.org/stable/3585220
Chang-Tai Hsieh and Peter J. Klenow, “Relative
Prices and Relative Prosperity.” American Economic Review 97 (June 2007),
562–585.
http://www.jstor.org/stable/30035012
Chang-Tai Hsieh and Peter J. Klenow, “Misallocation
and Manufacturing TFP in China and India,” Quarterly
Journal of Economics 124 (November 2009), 1403–1448.
http://dx.doi.org/10.1162/qjec.2009.124.4.1403
Daron Acemoglu, “Why Not a Political
Coase Theorem? Social Conflict, Commitment and Politics.” Journal of
Comparative Economics 31 (December 2003), 620–652.
http://dx.doi.org/10.1016/j.jce.2003.09.003
Part II:
October 16 – December 09.
GSI and Office Hours:
GSI: Sergii Meleschchuk, office hours M,Tu 1-2P.M.
542 Evans
P. Gourinchas office hours: W 1-2P.M., 697D Evans
Sign-up: www.wejoinin.com/sheets/bfjxj
VII. Consumption
*David Romer,
Advanced Macroeconomics, fourth edition, Chapter 8, “Consumption”
Milton Friedman, A Theory of the
Consumption Function, Chapters 1-3, pp. 3-37.
http://papers.nber.org/books/frie57-1
Robert Hall, “: Theory and Evidence,”
Journal of Political Economy, December 1978, pp. 971-987.
http://www.jstor.org/stable/1840393
John Campbell and N. Gregory Mankiw, “Consumption, Income and Interest Rates:
Reinterpreting the Time-Series Evidence,” NBER Macroeconomics Annual: 1989. Blanchard, O. and S. Fischer eds. MIT Press.
http://www.jstor.org/stable/3584973
*Chang-Tai Hsieh, “Do Consumers React to
Anticipated Income Changes? Evidence from the Alaska Permanent Fund,” American
Economic Review, March 2003, pp. 397-405.
http://www.jstor.org/stable/3132183
Jonathan A. Parker, Nicholas S. Souleles, David S. Johnson, Robert McClelland, “Consumer
Spending and the Economic Stimulus Payments of 2008,” American Economic Review,
October 2013, vol. 103(6), pp2530-53.
http://dx.doi.org/10.1257/aer.103.6.2530
*Angus Deaton, “Saving and Liquidity
Constraints,” Econometrica, September 1991, vol.
59(5), pp1221-48
http://www.jstor.org/stable/2938366
Angus Deaton, Understanding Consumption,
Clarendon Lectures in Economics, Oxford University Press, 1992
Christopher Carroll, “A Theory of the
Consumption Function, with and without Liquidity Constraints”, Journal of
Economic Perspectives, Summer 2001, vol. 15(3), pp23-45
http://www.jstor.org/stable/2696555
*Pierre-Olivier Gourinchas and Jonathan
Parker, “Consumption over the Lifecycle,” Econometrica,
January 2002, vol. 70(1), pp47-91
http://dx.doi.org/10.1111/1468-0262.00269
Mark Aguiar
and Erik Hurst, “Consumption vs. Expenditure,” Journal of Political Economy,
October 2005, vol. 113(5), pp919-948
http://www.jstor.org/stable/10.1086/491590
John Karl Scholz,
Ananth Sheshadri and Surachai Khitatrakun, “Are
Americans Saving `Optimally’ for Retirement,” Journal of Political Economy,
August 2006, vol. 114(4), pp607-643
http://www.jstor.org/stable/10.1086/506335
Marios Angeletos, David Laibson, Andrea Repetto, Jeremy Tobacman and
Stephen Weinberg, “The Hyperbolic Buffer Stock Model: Calibration, Simulation
and Empirical Validation,” Journal of Economic Perspectives, Summer 2001, vol.
15(3), pp47-68
http://www.jstor.org/stable/2696556
Atif Mian, Kamalesh Rao and Amir Sufi,
“Household Balance Sheets, Consumption and the Economic Slump,” Quarterly
Journal of Economics, vol. 128(4), pp1687-1726
http://dx.doi.org/10.1093/qje/qjt020
VIII.
Investment
*David Romer,
Advanced Macroeconomics, fourth edition, Chapter 9, “Investment,” Sections
9.1-9.8, pp. 405-436.
Maurice Obstfeld
and Kenneth Rogoff, Foundations of International Macroeconomics
(Cambridge: MIT Press, 1996), pp. 105-113.
Robert Hall and Dale Jorgenson, “Tax
Policy and Investment Behavior,” American Economic Review, June 1967, vol.
57(3), pp391-414
http://www.jstor.org/stable/1812110
*Fumio Hayashi, “Tobin’s Marginal q and
Average A: A Neoclassical Interpretation,” Econometrica,
January 1982, vol. 50(1), pp213-224
http://www.jstor.org/stable/1912538
Lawrence Summers, “Taxation and
Corporate Investment: A q-Theory Approach,” Brookings Papers on Economic
Activity, 1981:1, pp. 67-127.
http://www.jstor.org/stable/2534397
*Austan Goolsbee, “Investment Tax Incentives, Prices, and the
Supply of Capital Goods,” Quarterly Journal of Economics, February 1998, pp.
121-148.
http://www.jstor.org/stable/2586987
Dixit and Pindyck,
Investment under Uncertainty, chapters 1-5
*Ricardo Caballero, “Aggregate
Investment,” Handbook of Macroeconomics, vol. 1B, 1999, John B. Taylor and
Michael Woodford, Eds, Elsevier, pp813-862
http://dx.doi.org/10.1016/S1574-0048(99)10020-X
Ricardo Caballero and Eduardo Engel,
“Explaining Investment Dynamics in U.S. Manufacturing: A Generalized (S,s) Approach,” Econometrica, July
1999, vol. 67(4), pp783-826.
http://dx.doi.org/10.1111/1468-0262.00053
Robert Merton, “Lifetime Portfolio
Selection under Uncertainty: The Continuous-Time Case,” Review of Economics and
Statistics, August 1969, vol. 51(3), pp247-257
http://www.jstor.org/stable/1926560
IX.
International Economics
*Maurice Obstfeld
and Kenneth Rogoff, Foundations of International
Macroeconomics (Cambridge: MIT Press, 1996), chapters 2 and 3.
*Pierre-Olivier Gourinchas and Olivier
Jeanne, “Capital Flows to Developing Countries: The Allocation Puzzle,” Review
of Economic Studies, October 2013, vol. 80(4), pp1484-1515
http://dx.doi.org/10.1093/restud/rdt004
*Ben
Bernanke, “Remarks by Governor Ben S. Bernanke: The Global Saving Glut and the
U.S. Current Account Deficit,” March 10, 2005. http://www.federalreserve.gov/boarddocs/speeches/2005/20050414/default.htm
Ricardo Caballero, Emmanuel Farhi and Pierre-Olivier Gourinchas,
“An Equilibrium Model of `Global Imbalances’ and Low Interest Rates,” American
Economic Review, March 2008, vol. 98(1), pp358-393
http://www.jstor.org/stable/29729975
*Maurice Obstfeld,
“Does the Current Account Still Matter?” American Economic Review (May 2012),
pp. 1-23
http://dx.doi.org/10.1257/aer.102.3.1
Jeffrey Frankel, “Measuring
International Capital Mobility: A Review,” American Economic Review, May 1992,
vol. 82(2), pp197-202
http://www.jstor.org/stable/2117400
*Rudiger Dornbusch, "Expectations and Exchange Rate
Dynamics," Journal of Political Economy, December 1976, vol. 84(6), pp.
1161-1176.
http://www.jstor.org/stable/1831272
Francesco Giavazzi
and Luigi Spaventa, “Why the Current Account May
Matter in a Monetary Union: Lessons from the Financial Crisis in the Euro
Area,” Discussion Paper 8008, Centre for Economic Policy Research (London),
September 2010.
ftp://ftp.igier.uni-bocconi.it/wp/2011/426.pdf
Jay Shambaugh,
“The Euro’s Three Crises,” Brookings Papers on Economic Activity, Spring 2012,
pp157-211
http://www.jstor.org/stable/23287217
X.
Financial Markets and Financial Crises
*David Romer,
Advanced Macroeconomics, fourth edition, Sections 9.9 and 9.10, pp. 436-451.
*Robert E. Lucas, Jr., “Asset Prices in
an Exchange Economy,” Econometrica, December 1978,
pp. 1429-1445.
http://www.jstor.org/stable/1913837
Rajnish Mehra and Edward C. Prescott, “The Equity Premium: A
Puzzle,” Journal of Monetary Economics, March 1985, vol. 15(2), pp. 145-161.
http://dx.doi.org/10.1016/0304-3932(85)90061-3
*J. Bradford DeLong, Andrei Shleifer, Lawrence H. Summers, and Robert J. Waldmann, “Noise Trader Risk in Financial Markets,” Journal
of Political Economy, August 1990, pp. 703-738.
http://www.jstor.org/stable/2937765
Andrei Shleifer
and Robert Vishny, “The Limits of Arbitrage,” Journal
of Finance, March 1997, pp. 35-55.
http://www.jstor.org/stable/2329555
Michael C. Jensen and William H. Meckling, “Theory of the Firm: Managerial Behavior, Agency
Costs and Ownership Structure,” Journal of Financial Economics, October 1976,
pp. 305-360.
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=94043
Ben S. Bernanke, Mark Gertler, and Simon Gilchrist, “The Financial Accelerator
and the Flight to Quality,” Review of Economics and Statistics, February 1996,
pp. 1-15.
http://www.jstor.org/stable/2109844
*Ben Bernanke and Mark Gertler, “Financial Fragility and Economic Performance,”
Quarterly Journal of Economics, February 1990, pp. 87-114.
http://www.jstor.org/stable/2937820
*Douglas Diamond and Philip Dybvig, “Bank Runs, Deposit Insurance, and Liquidity,”
Journal of Political Economy, June 1983, vol. 91(3), pp. 401-419.
http://www.jstor.org/stable/1837095
*Victoria Ivashina
and David S. Scharfstein, “Bank Lending During the
Financial Crisis of 2008,” Journal of Financial Economics, September 2010. pp.
319-338.
http://dx.doi.org/10.1016/j.jfineco.2009.12.001
Gary Gorton and Andrew Metrick, “Securitized Banking and the Run on Repo,” Journal
of Financial Economics, June 2012, pp. 425-451.
http://dx.doi.org/10.1016/j.jfineco.2011.03.016
Markus K. Brunnermeier,
“Deciphering the Liquidity and Credit Crunch 2007-2008,” Journal of Economic
Perspectives, Winter 2009, pp. 77-100.
http://www.jstor.org/stable/27648295
*Atif Mian and Amir Sufi, “What Explains the 2007-2009 Drop in
Employment,” February 2014, Chicago Booth Working Research Paper 13-43
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1961223
Gabriel Chodorow-Reich,
“The Employment Effects of Credit Market Disruptions: Firm-Level Evidence From
the 2008-9 Financial Crisis,” Quarterly Journal of Economics, February 2014,
vol. 129(1), pp1-59
http://dx.doi.org/10.1093/qje/qjt031