Tartu University, Department of Economics
Narva 4, A123
Tartu 51009
ph: (+372) 737 6348
fax: (+372) 737 6312
e-mail: otoomet (a) gmail (.) com
Tartu University, Department of Economics
Narva 4, A110
Tartu 51009
tel: (+372) 737 6395
fax: (+372) 737 6312
e-mail: jaan (.) masso (a) ut (.) ee
The course contains lectures, (compulsory) home assignments, tutorials (devoted to solutions of the assignments), mid-term exam, and the final exam. The main textbook is D. Romer Advanced Macroeconomics McGraw-Hill, New York 2001. Limited number of copies available in the library. I also intend to give you a few articles and other relevant materials, such as newspaper columns.
It is obligatory to pass at least 6 of the total of 8 problem sets. The deadlines will be given (in most cases start of a tutorial), you have to follow the deadlines exactly. I prefer to have the solutions on paper (handwriting is OK), please try to avoid e-mailing them if you can. I will only briefly comment the solutions on the paper (often not at all). Tutorials are time for solutions, complaints, questions, and related discussion.
Problem sets contain one or more exercises of different weight. Every exercise will be graded as 0 (fail) or a percentage. For instance, if the weight is 2, you will receive 2 %points if passed (out of the total 3 for every assignment). I evaluate mostly your work on the problem: if you try hard (and show it on the handed-in assignment), you will pass, even if you do not get the correct results. Assignments as whole will also be graded as passed/not passed (remember you have to pass at least 6).
The final grade is made of midterm (26%), assignments (8 × 3 = 24%), and the final exam (50%). I reserve the right to re-calibrate the score based on the best actual results in the group. The points will be converted to the grades as follows:
| score (%) | grade |
|---|---|
| 90-100 | A |
| 80-89 | B |
| 70-79 | C |
| 60-69 | D |
| 50-59 | E |
| < 50 | F |
The classes will be on Fridays, 10:15 – 11:45 in B102. The tutorials will be held 12:15-13:45, during the slot, reserved for PhD seminars in September and October. We'll discuss the timing and available slots during our first meeting, September 2nd.
2h lecture
Introduction: what is macroeconomics? What is economic model? Economic growth: Ramsey model setup (Romer 2)
Read yourself about the Solow model (Romer 1) to refresh the concepts.
Additional reading: Optimal control, A. Chiang Elements of Dynamic optimization, Waveland Press, Illinois 1992, pp 27-36 and 161-181.
Additional background about economic growth: Acemoglu: Introduction to Modern Economic Growth, 1. peatükk.
3h lecture + 1h tutorial
Ramsey model (Romer 2.3).
Read yourself: Romer 2.4 (Welfare)
Problems #1 deadline! Tutorial
2h lecture + 2h tutorial
Method: 2D phase diagram
Lecture: Ramsey Model (Romer 2.5, 2.7). Read yourself: Romer pp 63-64.
Article: Blanchflower & Oswald Well-being over time in Britain and the USA, Journal of Public Economics 88, 1359-1386 (2004)
Article: Rodrik The Real Exchange Rate and Economic Growth, Brooking Papers of Economic Activity, Fall 2008, 365-412
Problems #1 deadline! Tutorial
2h lecture + 2h tutorial
Business Cycle: introduction, real business cycle
Read yourself Romer 4.3 - 4.5.
Check empirics at http://www.nber.org/cycles.html.
Problems #3 deadline! Tutorial
Introduction to dynamic programming: Sargent (1989)
2h lecture + 2h midterm exam
Business cycles: Keynesian cycles. Read yourself Romer 5.3 - 5.6
Midterm Exam!
The topics include:
2h lecture + 2h tutorial
Business cycles: Microeconomic Foundations. Romer 6
Problems #4 deadline! Tutorial
Abraham & Haltiwanger Real Wages and the Business Cycle, Journal of Economic Literature 33(3), 1215-1264 (1995)
2h lecture + 2h tutorial
Consumption. Romer 7
Problems #5 deadline! Tutorial
2h lecture + 2h tutorial
Investments. Romer 8
Problems #6 deadline! Tutorial
Cogan & et al New Keynesian versus old Keynesian government spending multipliers, Journal of Economic Dynamics and Control 34, 281-295 (2010)
More background:
2h lecture + 2h tutorial
Inflation. Simple relationships (Romer 10.1 - 10.3); reputation (Romer 10.5, read yourself included empirics). Inflation costs
Article: Shafir, Diamond & Tversky Money Illusion, Quarterly Journal of Economics 112(2), 341-374 (1997).
Problems #7 deadline! Tutorial
2h lecture + 2h tutorial
Political Economics, strategic debt (Romer 11.6).
Problems #8 deadline! Tutorial
My lecture notes. This is not a replacement for the textbook, but may be useful for solutions involving Hamiltion and and dynamic programming.
Beware typos!