Chapter 1 simple representative agent models this chapter deals with the simplest kind of macroeconomic model, which abstracts from all issues of heterogeneity and distribution among economic agents. Macroeconomics to final year undergraduates at university college dublin. It is therefore appropriate that we begin our study of microeconomic theory with an analysis of individual decision making. L1l2, an introduction to growth models and growth facts pdf. Jesus fernandezvillaverde university of pennsylvania.
We will consider various theories of investment and also how. While you have taken intermediate macro, most of mishkins book is meant to be accessible to less prepared students. The lecture notes combine the approaches of and adapt materials in both. An intermediate level macroeconomics textbook that develops the core elements of modern macroeconomic theory in easily digestible bits using indifference curves, budgets constraints, and simple math. Partly for this reason, economists distinguish between two types of unemployment. These notes were tried out on numerous students at stanford, upenn, frankfurt and mannheim, whose many useful comments i appreciate. The history of macroeconomics from keyness general. In the next set of notes, we will analyse this model in depth, examining what happens. V chari, timothy kehoe and ed ward prescott, my excolleagues at stanford, robert hall, beatrix paal and tom. A core of practical macroeconomics stanford university. The difference between macroeconomics and microeconomics macroeconomics includes those concepts that deal with the entire economy or large components of.
Simple representative agent models, growth with overlapping generations, neoclassical growth and dynamic programming, endogenous growth, choice under uncertainty, consumption and asset pricing, search, money and unemployment, overlapping generations models of money, a cashinadvance model. Find materials for this course in the pages linked along the left. The real exchange rate adjusts to balance the supply and demand for dollars. Employment and inflation is a collection of scholarly papers that accounts the development of a microeconomic theory of wage and price decisions and commitments. Chapter 19a macroeconomic theory of the open economy 5 6. By contrast, microeconomics treats economic processes that concern individuals.
Schaums outline of theory and problems of macroeconomic theory schaums outline series author. These notes were tried out on numerous students at. January 2018 1this lecture notes are for the purpose of my teaching and convenience of my students in class. Macroeconomic theory social science computing cooperative. Pdf by standards of economic efficiency which you will elaborate. Full text of macroeconomic theory internet archive. Department of economics, auburn university, auburn, al 36849, usa. Lecture notes in macroeconomics university of houston. Purchase studies in macroeconomic theory 1st edition. Book, english, schaums outline of theory and problems of macroeconomic theory schaums outline series created date. Each topic is viewed through explicit models, designed to reveal its central issues as simply and directly as possible, but without giving up either rigor or substance. Stanford, upenn, frankfurt and mannheim, whose many useful comments i. Book, english, schaums outline of theory and problems of macroeconomic theory schaums outline series keywords.
An aggregate is a multitude of economic subjects that share some common features. Kaiji chen and antonio doblasmadrid provided many important corrections to these notes. The most important omission is the fact that these notes do not cover dynamic macroeconomic models in any detail. The competitive equilibrium and the pareto optimum are equivalent here, as in the version of the model. Lecture notes in macroeconomics the department of economics. Keynesian macroeconomic models assume that prices are sticky, or even. An intermediate level macroeconomics textbook that develops the core elements of modern macroeconomic theory in easily digestible bits using indifference curves, budgets constraints, and.
There will be two midterms march 9 and april 15 each counting for 25% of the final grade. Schaums outline of theory and problems of macroeconomic. Motivation consider the handout labeled the first measured century. A quick glance at the disciplines leading journals reveals that virtually the entire academic profession has turned to interpreting macroeconomic data with models that are based. Lecture notes principles of macroeconomics economics. Macroeconomics, study of the behaviour of a national or regional economy as a whole. A quick glance at the disciplines leading journals reveals that virtually the entire academic profession has turned to interpreting macroeconomic data with models that are based on microeconomic foundations. In the interests of making everyones life easier, i am placing my lecture notes online. Ireland, peter and scott schuh 2008 productivity and macroeconomic performance. This graduate textbook is a primer in macroeconomics. These assumptions are used in order to build macroeconomic models. Richter1 department of economics auburn university january 2015 1correspondence. We do not want a separate microeconomic theory and macroeconomic theorythat is a point upon which by now most participants in the debate agreeor a separate microeconometrics and macroeconometrics. All topics essential for first year graduate students are covered.
While you have taken intermediate macro, most of mishkins book. Macroeconomic theory jeanpascal bonassy problemssolutions. These include rational expectations, intertemporal dynamic models, exogenous and endogenous growth, nonclearing markets and. Develops in a simple and rigorous manner the central topics of modern macroeconomic theory including rational expectations, growth, business cycles, money, unemployment, government policy, and the macroeconomics of nonclearing markets. If you skip one of the midterms, then the final exam will count for 75%, and if you miss both it will count for 100% of the final grade. And we know more than just the results of cross section econometric studies.
Driscoll brown university and nber1 december 21, 2003. It starts from essential undergraduate macroeconomics and develops the central topics of modern macroeconomic theory in a simple and rigorous manner. Stabilization and growth what people truly care about is the stability and growth of their real incomes. We do not want a separate microeconomic theory and macroeconomic theory that is a point upon which by now most participants in the debate agreeor a separate microeconometrics and macroeconometrics. If the real exchange rate was lower than real e, the quantity of dollars demanded would be greater than the quantity of dollars supplied and there would be upward pressure on the real exchange rate.
Macroeconomic theory is the most uptodate graduatelevel macroeconomics textbook available today. Notes on macroeconomic theory steve williamson dept. The natural rate of unemployment is the rate of unemployment that the economy experiences even during normal times, that is, even. The history of macroeconomics from keyness general theory to. Lecture notes macroeconomic theory i economics mit. Lecture notes macroeconomic theory ii economics mit.
Macroeconomic theory dirk krueger1 department of economics university of pennsylvania january 26, 2012 1i am grateful to my teachers in minnesota, v. Mit opencourseware makes the materials used in the teaching of almost all of mits subjects available on the web, free of charge. Among them, i would like to thank especially selo imrohoroglu. Developing countries, notwithstanding the enormous strides they have made in the last few decades, display fundamental economic inadequacies in a wide range of indicators. V chari, timothy kehoe and edward prescott, my excolleagues at stanford, robert hall, beatrix paal and tom sargent, my colleagues at upenn hal cole, jeremy greenwood, randy wright and. It is the perfect resource for students and researchers. After developing the quantity theory of money to explain inflation, this chapter goes on to identify the costs that inflation, particularly when it reaches very high rates, imposes on the economy. Rework the optimal growth solution in terms of the original variables, i. The core is practical in the sense that it is having a bene ficial effect on macroeconomic policy, espe cially monetary policy, and has resulted in improvements in policy in the last 15 years. Mar 19, 2020 macroeconomics, study of the behaviour of a national or regional economy as a whole. Macroeconomic theory and policy 2nd edition andolfatto, david simon fraser university 1 january 2008 online at.
Macroeconomic theory this is a wikipedia book, a collection of wikipedia articles that can be easily saved, imported by an external electronic rendering service, and ordered as a printed book. It represents the current, stateoftheart macroeconomic theory. They produce the same good, which can be both consumed or invested. Grades will be based on one midterm, homework assignments, and the final exam. It consists of an introduction to the theory of individual decision making considered in an abstract setting. Lecture note on classical macroeconomic theory econ 5 prof. Neoclassical macroeconomic modelscommonlyassumethatpricesareperfectly. The notes have been written jointly with juan rubioramirez at emory university. Sna mainly records flows of goods and services within a time period for example, the consumption. It is concerned with understanding economywide events such as the total amount of goods and services produced, the level of unemployment, and the general behaviour of prices. The sequence to sargents dynamic macroeconomic theory with uptodate examples and applications of recursive methods. Notes on phillips curve, okuns law, and the quantity theory of money. With more than 2,200 courses available, ocw is delivering on the promise of open sharing of knowledge.
Textbook references in the syllabus are denoted in bold type. I learned and am still learning dynamic macroeconomics from a series of great teachers. Macroeconomic dynamics this set of lecture notes is the backbone of a class on formulation, computation, and estimation of dynamic general equilibrium models. Open a book any book on the economics of developing countries, and it will begin with the usual litany of woes. Bohn this course will examine the linkages between interest rates, money, output, and inflation in more detail than mishkins book. J to give the students an overview of contemporary macroeconomic theory and to make the students understand and analyze relationships among different macroeconomic variables such as national income, employment, consumption, inflation and the quantity of money, student will be able to understand the role of government. For help with downloading a wikipedia page as a pdf, see help. This theory is a synthesis between classical economics and keynesian economics that was created to help explain stagflation high rates of both unemployment and inflation that emerged in the 1970s.
Notes on macroeconomic theory university at albany, suny. This includes regional, national, and global economies while macroeconomics is a broad field of study, there are two areas of research that are emblematic of the discipline. Firm a produces 50 bushels of wheat, with no intermediate goods inputs. This revised second edition emphasizes the general equilibrium character of macroeconomics to explain effects across the whole economy while taking into account recent research in the field. Macroeconomic theory and policy 2nd edition andolfatto, david simon fraser university 1 january 2008 online at mpra paper no. Macroeconomic theory and analysis gianluca violante.