Intermediate Macroeconomics: IAS 107: Spring 2011: U.C. Berkeley

Macroeconomic Teaching Notes as of October 16, 2007

Intermediate Macroeconomics (Undergraduate):

Monetary Policy:

• The Quantity Theory in the Medium Run: http://www.j-bradford-delong.net/2008_pdf/20080228_mvpy.pdf
• Central Bank Credibility and Consistency: The Analytics http://j-bradford-delong.net/macro_online/credibility_analytics.pdf
• Inflation, Unemployment, and Stabilization Policy http://www.j-bradford-delong.net/movable_type/pdf/Lec_Notes_Stabilization.pdf

International Finance:

• The International Financial Crises of the 1990s: Analytics http://j-bradford-delong.net/macro_online/ifc.pdf
• Some Simple Analytics for a Hard [Dollar] Landing http://www.j-bradford-delong.net/movable_type/pdf/hard_landing.pdf

Economic Growth:

• Introduction to the Theory of Economic Growth http://delong.typepad.com/print/20060830_econ_101b_lecture_notes.pdf
• How Fast Does the Economy Head Toward Its Steady-State Balanced-Growth Path? http://j-bradford-delong.net/macro_online/gt_convergence.pdf
• Theory of Economic Growth: Two Additional Notes: "Important Equations" and "Increases in g" http://delong.typepad.com/print/20060831_lecture_notes.pdf
• Explorations in the Theory of Economic Growth: "Natural Resources" and "Malthusian Nightmares" http://delong.typepad.com/print/20060905_lecture_notes.pdf
• The "Golden Rule" and National Savings http://j-bradford-delong.net/macro_online/golden_rule.pdf
• Growth Accounting http://j-bradford-delong.net/macro_online/growth_accounting.pdf
• Modeling the High-Tech Computer Revolution of the 1990s http://delong.typepad.com/print/20060914_lecture_notes.pdf
• INCOMPLETE DRAFT: Notes on Antitrust Policy and Optimal Innovation in a Model of Productive Variety http://delong.typepad.com/pdf/20070709_varieties_antitrust.pdf

Fluctuations:

• The Effect of a Cut in the Tax Rate http://j-bradford-delong.net/macro_online/tax_cut.pdf
• Using the Flexible-Price Model: A Primer http://j-bradford-delong.net/Teaching_Folder/Econ_101b_f2001/flexprice_model.pdf

Advanced Macroeconomics (Graduate):

• On Robert Barro's (2005) "Rare Events and the Equity Premium" and T.A. Rietz's (1988) "The Equity Risk Premium: A Solution" http://delong.typepad.com/print/20070213_note_barro_rietz.pdf
• The Gordon Equation, Earnings Yields, and Stock Returns http://delong.typepad.com/sdj/2007/05/a_teaching_note.html
• Equity Premium Handout http://www.j-bradford-delong.net/Teaching_Folder/Econ_202b/Handouts/equity.pdf
• "Bubbles" Handout http://www.j-bradford-delong.net/teaching_folder/Econ_202b/Handouts/bubbles.pdf

Additional Materials:

• Solow Growth Model Scenario Spreadsheet http://delong.typepad.com/print/20060829_Solow_growth.xls
• Simple Lucas-Tree Spreadsheet for Barro-Rietz Critique http://spreadsheets.google.com/pub?key=p_zylRhg4towFfq53r00UBA

Starting to Think About Next Semester's Teaching...

We have been moved:

UCB Online Schedule of Classes: Search Results: 3-DEC-07, Spring 2008

ECONOMICS

22579 P 101B 001 LEC MW 8-9A 247 CORY Economic Theory--Macro 4 DELONG, J B
22582 S 101B 101 DIS MW 8-9A 237 CORY Economic Theory--Macro
22585 S 101B 102 DIS WF 11-12P 61 EVANS Economic Theory--Macro

This is a go-faster do-more course--intended for people who would be bored in Economics 100b. (And, I think, not nearly enough people take it.)

Notes to self:

• Daily index card feedback--what was confusing/boring/interesting about today...
• Weekly web assignments--largely using spreadsheets...
  • Use Facebook!

• Weekly problems sets (10)--due at start of Friday lecture...

• MW lectures--spend them on theory and tools

• F lectures--spend them on current events

• W sections... do problems like those on the next problem set

• FM sections... go over last problems and clean-up from the destruction and unclarity left by the previous week's lecture

Grading:

• Exams
  • Early professorial reality check exam...
  • Pre-spring break core theory exam...
  • Late applications exam...
  • (Short) final to be thought of as a makeup or recovery exam...
• Points
  • 101 points in all
  • 2 points per problem set x 10 = 20
  • 1 point per web assignment x 10 = 10
  • 1/4 point per index card x 40 = 10
  • 10 points for section participation
  • 51 points for exams

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Proposed Schedule

Introduction

W Jan 23: INTRODUCTION: The Problems of Macroeconomics

• Case Study: The Federal Reserve, August 2007-December 2007
• Macroeconomics, 1-3

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Theory (with Examples and Illustrations)

The Long Run: Economic Growth

F Jan 25: The Solow Model: Capital and Equilibrium

• Macroeconomics, 4
• Introduction to the Theory of Economic Growth

M Jan 28: The Solow Model: Dynamics and Feedback

• How Fast Does the Economy Head Toward Its Balanced-Growth Path
• Two Additional Notes

W Jan 30: How Much of Today's World Can We Explain with the Solow growth model?

• Macroeconomics, 5

F Feb 1: What happened this week in the macroeconomy?

• Problem Set 1 due Solow Growth Models Scenario Spreadsheet

M Feb 4: From Malthus to Modernity: Understanding the Industrial Revolution

• Macroeconomics, review 5.1
• Notes: Industrial Revolutions
• Explorations in the Theory of Economic Growth](http://delong.typepad.com/print/20060905_lecture_notes.pdf)

W Feb 6: Technology

• Notes: Technology
• Optimal Innovation

F Feb 8: What happened this week in the macroeconomy?

• Problem Set 2 due

M Feb 11: Institutions

• Notes: Institutions

W Feb 13: Resources

• Notes: Resources

F Feb 15: PROFESSORIAL REALITY CHECK EXAM

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The Medium Run: Economic Fluctuations with Flexible Prices

W Feb 20: Components of Aggregate Demand

• Macroeconomics, 6

F Feb 22: Full-Employment Equilibrium

• Macroeconomics, 7
• Using the Flexible Price Model
• Problem Set 3 due

M Feb 25: The International Side--Plus Government Budgets and Investment Booms

• Macroeconomics, review 6.3, review 7.5

W Feb 27: The Monetary Side: The Quantity Theory of Money, Inflation, and Expectations

• Macroeconomics, 8

F Feb 29: What happened this week in the macroeconomy?

• Problem Set 4 due

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The Short Run: Economic Fluctuations with Sticky Prices

M Mar 3: Sticky Prices and Aggregate Demand

• Macroeconomics, 9

W Mar 5: The IS Curve and Employment

• Reading: Macroeconomics, 10 including 10a

F Mar 7: What happened this week in the macroeconomy?

• Problem Set 5 due

M Mar 10: The Phillips Curve and Inflation

• Macroeconomics, 12, including 12a (optional: 11)

W Mar 12: Tying Up the Short-Run and the Medium Run

• Inflation, Unemployment, and Stabilization Policy

F Mar 14: What happened this week in the macroeconomy?

• Problem Set 6 due

M Mar 17: Loose Ends

• Notes: Core Theory Loose Ends

W Mar 18: CORE THEORY EXAM

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Applications (with Additional Theory)

Domestic Monetary and Fiscal Policies

M Mar 31: Stabilization Policy since WWII

• Macroeconomics, review 10.3, review 12.4, 13, 14.1, 16.1-16.4

W Apr 2: Should Conservatives Be Central Bankers?

• Notes: Central Bankers: Stabilizers, Credible Inflation-Fighters, and Lenders of Last Resort
• Central Bank Consistency and Credibility: The Analytics
• Macroeconomics, review 13.6, review 13.7

F Apr 4: What happened this week in the macroeconomy?

• Problem Set 7 due

M Apr 7: Looking Back at the Great Depression: What Went So Wrong?

• Macroeconomics, 16.3, 16.5
• Notes on the Great Depression
• Notes on Liquidity Traps

W Apr 9: Is There a Political Business Cycle?

• Macroeconomics, review 13.6

F Apr 11: What happened this week in the macroeconomy?

• Problem Set 8 due

M Apr 14: U.S. Long-Run Budget Balance

• Notes: Fiscal Policy in the Long Run
• The "Golden Rule" and National Savings
• Macroeconomics, 14.2, 14.3

W Apr 16: "Fixing" Social Security

• Notes on Social Security

F Apr 18: What happened this week in the macroeconomy?

• Problem Set 9 due

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Growth and Distribution

M Apr 21: Productivity Speed-Ups and Slow-Downs

• Macroeconomics, review 5.2
• Notes: Understanding the Productivity Slowdown
• Notes: Understanding the Productivity Speed-up
• Growth Accounting
• Modeling the High-Tech Computer Revolution of the 1990s

W Apr 23: U.S. Income Distribution

• Notes: American Income Distribution

F Apr 25: What happened this week in the macroeconomy?

• Problem Set 10 due

M Apr 28: European Youth and Structural Unemployment

• Macroeconomics, 16.5
• Notes: The Western European Macroeconomy

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Domestic and International Finance

W Apr 30: "Animal Spirits": Understanding the Stock and Real Estate Markets

• Notes: Animal Spirits
• On Robert Barro's (2005) "Rare Events and the Equity Premium" and T.A. Rietz's (1988) "The Equity Risk Premium: A Solution" http://delong.typepad.com/print/20070213_note_barro_rietz.pdf
• The Gordon Equation, Earnings Yields, and Stock Returns http://delong.typepad.com/sdj/2007/05/a_teaching_note.html
• Equity Premium Handout http://www.j-bradford-delong.net/Teaching_Folder/Econ_202b/Handouts/equity.pdf
• "Bubbles" Handout http://www.j-bradford-delong.net/teaching_folder/Econ_202b/Handouts/bubbles.pdf

F May 2: What happened this week in the macroeconomy?

M May 5: Global Imbalances

• Notes: Global Imbalances
• The International Financial Crises of the 1990s
• Simple Analytics for a Hard Dollar Landing

W May 7: APPLICATIONS EXAM

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Summary and Review

F May 9: What happened this week in the macroeconomy?

M May 12: FINAL REVIEW

Th May 15: FINAL EXAM 8-11

Web Apps in the Classroom...

Ha! (At least "Ha!" in Firefox):

http://spreadsheets.google.com/pub?key=p_zylRhg4toxRamJQhxALYg

Solow Growth Model: Increase in Savings Rate:

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Control Parameters:

I wonder if I can require students in 101b next semester to bring laptops to class?

Test

Test...