32423 - Advanced Macroeconomics

Learning outcomes

The  course aims at familiarizing the student with the most important  macroeconomic models with an effort to apply them to real world problems. At the end of the course the student is expected to: be familiar with the standard  growth models amd their ability to account for existing differences , in time and across countries, in levels and growth rates of per-capita incomes; be familiar with endogenous growth models; the student is also expected to have studied the theory of  the main components of aggregate demand, consumption and investment, as well as the microeconomic foundations of price stickiness. Finally  the student is expected to be able to analyze problems concerning unemployment and the labour market and discuss issue on the sustanability and the effects of public debt.

Course contents

This course is divided into four parts.La first part introduces the main models of the theory of growth, the Solow model and models with microeconomic foundations, the model of Ramsey-Cass-Koopmans and the overlapping generations model (OLG) of Diamond. Particular attention is devoted to the ability of models to explain satisfactorily the differences in levels and growth rates of per capita income between countries and over time. The overlapping generations model also provides the basis for a theory of asset price bubbles and speculative behaviour. This part is concluded by a discussion of endogenous growth models, the general AK model with an application to the "learning by doing" model. The second part discusses the theory of the main components of aggregate demand, consumption (the permanent income hypothesis ) and investment (Tobin's Q-theory). The third part discusses the microeconomic foundations of Unemployment: efficiency wages, job-search, implicit contracts and insider-outsider models. The last part discusses the role of Public Debt and Fiscal Policy. The notion of sovency and sustainability of public debt is defined as well as the Ricardian Equivalence theorem and the theory of optimal taxation over time. Finally models of sovereign defaults are presented

Readings/Bibliography

David Romer, (R) Advanced Macroeconomics, Mc Graw-Hill, 2006 3rd

edition),

Robert Barro, Xavier Sala-i-Martin, (BS), Economic Growth MIT Press

- Modello di Solow: R cap.1, esclusa sez. 1.8

- Ramsey e OLG: R, cap 2 , Appunti distribuiti dal docente

-Teoria del Consumo: R cap 7

-Teoria dell ' Investimento: R cap 8

-Rigidit à Nominali: R cap 6 (6.1-6.6, 6.9)

- Disoccupazione: R cap 9 (9.1-9.5 e 9.8-9.9 )

Teaching methods

Lectures and Classes. Students/ presentations on selected issues

Assessment methods

Written Exam

Teaching tools

Course material distributed by the professor, classes by tutor

Links to further information

http://paolomanasse.it/teaching/

Office hours

See the website of Paolo Luciano Adalberto Manasse