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Advanced Macroeconomic Theory

Econ 617

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George Davis Fall 1998

213 A Laws Hall Office Hours:

529-2842 T-Th: 2:00-3:00

davisgk@muohio.edu M-W: 2:00-3:00 ______________________________________________________________________________

Overview of the Course

In this course we develop the basic theory used to study the macroeconomy. In the process you will also become familiar with the basic "facts" of the macroeconomy. When possible we will use formal mathematical analysis to familiarize you with the method typically used in professional publications and to help hone your own skills.

Text Book

Macroeconomics by Robert Barro 4th edition. Time permitting, we will also study chapter 1 in David Romer's Advanced Macroeconomics.

Grading

Your grade will based on 2 mid-term exams and a final exam. The exam will be given equal weight.

Exam 1 Tuesday September, 29

Exam 2 Tuesday November, 10

Final Exam Tuesday December, 15 12:30 p.m.

Course Outline:

I. Introduction Barro chpt. 1

II. Consumption

a) consumption-leisure trade-off Barro chpt. 2

b) consumption-savings trade-off Barro chpt. 3

c) combining results

III. The Money Market Barro chpt.4

IV. The Basic Model Barro chpt. 5

V. Investment Barro chpt. 9

a) theory of investment

b) investment and the basic model

VI. Fiscal Policy

a) government spending Barro chpt. 12

b) taxation Barro chpt. 13

c) debts and deficits Barro chpt. 14

VII. Non-Neutral Money

a) some evidence Barro chpt. 18

b) IS-LM model Barro chpt. 20

c) imperfect information Barro chpt. 19

d) nominal wage contracts

e) menu costs

VIII Economic Growth Romer chpt. 1