Unit Code ES30026
Unit Title Advanced Macroeconomics
Lecturer Prof Chris Martin
Room: 3E. 4.37
e-mail: [Link]@[Link]
Office Hours: Monday 9.30-10.30; Thursday 9.30-10.30
Tutor Dr Matteo De Tina
Room: 3E 4.27
e-mail: [Link]@[Link]
Aims and Learning Objectives:
The aim of this course is to build on second year macroeconomics and introduce
topics that are the subject of recent academic research. This will help students to
achieve (i) an understanding of the scope of modern macroeconomics and its
applications, (ii) an ability to read and understand current macroeconomic literature,
(iii) an ability to use advanced macroeconomics concepts in analysing specific issues
and (iv) examine how recent advances in macroeconomic theory has informed UK
economic policy.
Content:
The course unit covers specific areas in macroeconomic theory: Consumption,
Aggregate Demand, Aggregate Supply, Business Cycles, Monetary Policy and the
Financial Crisis. Course outline, lecture slides and any handouts are available at Unit
Moodle site.
Course Text:
Sorensen, P and Whitta-Jacobsen, 2010, Introducing Advanced Macroeconomics:
Growth and Business Cycles (2
nd
edition), McGraw Hill.
Other Texts you may wish to consult:
Gillman, M, 2010, Advanced Modern Macroeconomics: Analysis and
Application, Prentice Hall (an alternative approach to macroeconomics from a real
business cycle perspective)
Wickens, M, 2008, Macroeconomic Theory: a Dynamic General Equilibrium
Approach, Princeton University Press (similar approach to Gillman, more technical)
Doepke M, Lehnert, M and A Sellgren, 2001, Macroeconomics (a free book covering
similar topics to Gillman) [Link]
Romer, D, 2006, Advanced Macroeconomics, 3
rd
Edition. McGraw-Hill. (An
advanced text; consult to see more of the state-of-the art)
Gartner, M, 2008, Macroeconomics, 3
rd
Edition FT Press (An intermediate textbook,
useful as background)
Organisation
Lectures
There will be a two-hour lecture each week; on Monday 4.15-6.05 in 2E 3.1
Seminars
Students will also have four one-hour seminars in alternate weeks, with supporting
material in other weeks. Seminars will build on the lectures by giving students an
opportunity to apply the lecture material to specific problems. Seminar questions will
be similar in format to the final exam.
Assessment
70% by unseen written examination, 30% by assessed work.
The assessed work will be a test, held in week 5 on Monday October 27
th
at 4.15
Lecture Topics:
1) Consumption
Sorensen, P and Whitta-Jacobsen ch 15
You might also consult: (note: only Romer considers credit rationing)
Gillman chs 2) and 5) (similar to first part of lecture)
Wickens ch 4) (similar but more technical than Gillman)
Doepke et al chs 2)-3) and parts of ch 6) (a more technical approach at a lower level)
Gartner ch 2 (to appreciate differences in treatment between Levels 2 and 3)
Romer ch 7) (an alternative model and more advanced analysis)
2) Aggregate Demand
Sorensen, P and Whitta-Jacobsen ch 16
You might also consult:
Gartner ch 7 (to appreciate differences in treatment between Levels 2 and 3)
Gillman ch 8) (for an alternative model)
Wickens ch 13) (a more complex and technical analysis but a simpler model of
aggregate demand cf (13.19))
Romer ch 7 (a similar but more advanced analysis)
3) Aggregate Supply
Sorensen, P and Whitta-Jacobsen ch 17
You might also consult:
Gartner ch 7 (to appreciate differences in treatment between Levels 2 and 3)
Gillman ch 8) (for an alternative model)
Wickens, ch 9 (a technical and sceptical discussion of Keynesian Phillips curve)
Romer ch 7 (derives the New Keynesian Phillips curve; similar to the model in
lectures but more technical and does not consider unions; his ch 10 does analyse
unions)
4) Business Cycles
Sorensen, P and Whitta-Jacobsen ch 18 and 21
Romer ch 7 (advanced discussion of DSGE models)
Gillman ch 13) (for detail on the RBC model)
Wickens ch 14 (techncail rbc model)
Doepke et al ch 9) (simpler and more intuitive explanation of RBC model)
5) Monetary Policy and the Financial Crisis
(note none of the texts cover the financial crisis)
Sorensen, P and Whitta-Jacobsen chs 16) and 18)
Romer ch 7 and 11 (more advanced and comprehensive analysis)
Gillman ch 20) (for a very different approach, from the RBC perspective)
Wickens ch 13) (a critical and technical discussion of Keynesian model)
Doepke et al ch 19) (similar to Gillman, very different from our approach)