28876 - Macroeconomics 2

Learning outcomes

At the end of the class, that is the second part of the graduate sequence of macroeconomics, student has knowledge of the following: - Growth theory, - the Solow model and its microeconomic foundations, - the Ramsey-Cass-Koopmans and the Overlapping Generations model of Diamond: the two models provide a general equilibrium framework that is used by macroeconomists to analyze several theoretical and policy questions;  - micro-foundations of price rigidities, the thoery of unemployment as an equilibrium phenomenon, monetary and fiscal policy issues - problem of credibility of monetary policy and its possible solutions studied in detail - Optimal fiscal policy and models of default considered in the study of fiscal policy,

Course contents

Macroeconomics 2

Contents and purpose of the course

The course is a part module of the first-year macroconomics course, and deals with the microeconomic foundations and the policy implications of market imperfections, particularly in the goods and labour market. 

The first part discusses the issue of imperfect information and its implications for the transmission of monetary shocks to the real economy in a rational expectation set-up. It then looks at the consequences of   imperfect competition in the goods market and discusses possible justifications for price and wage rigidities in new-keynesians models. The second part analzes the modern theories of unemployment: efficiency wages, implicit contracts insider-outsider and search models, which focus on information, risk and decentralized matching and bargaining as possible explanations for involuntary unemployment. The third part looks ad fiscal policy and the explanation for, and consequences of, budget deficits and public debt.  Finally, some topics concerning modern theories for financial crises are discussed.

 

Text Book:

Davide Romer (R), Advanced Macroeconomics, McGraw Hill                     

1.MicroFoundations of Market imperfections   R: Ch.6

2. Theories of Unemployment, R Ch 11

3. Optimal Fiscal Policy: Debt Neutrality. Tax Smoothing. Debt default R: Ch11

4. Topics on financial crises (reading to be determined)

Readings/Bibliography

Suggested textbooks for this course are:
- David Romer (R), Advanced Macroeconomics, Mc Graw-Hill, 2006 (2nd ed)
- Blanchard, Olivier J. and Stanley Fisher, Lectures on Macroeconomics, MIT press
- Obstfeld, M, K.Rogoff, (OR), “International Macroconomics”, MIT Press
- A. Drazen, (D) Political Economy in Macroeconomics, MIT Press, 2004
- Further material for this course will be available in the personal webpage of the lecturer at this link http://www2.dse.unibo.it/manasse

Teaching methods

Lectures, Handouts and Classes

Teaching tools

Lectures, handhouts, classes

Links to further information

http://paolomanasse.it/teaching/

Office hours

See the website of Paolo Luciano Adalberto Manasse