Macroeconomics
Part
II: Business Cycles
Winter
2012 (2nd term 2011/12)
Barcelona Graduate School of Economics
UPF Graduate
Program in Economics, Finance and Management
Weeks
1-4 and week 10 of this course are taught by Fabio Canova.
Lectures and
practice session:
Monday,
9:10 - 11:00, room 20.055
Tuesday,
9:10 - 11:00, room 20.055
Practice
session: Fridays 14:00 (Emma Duchini,
emma.duchini@upf.edu)
Office hours:
Tuesday afternoon, by email appointment
(tvanrens@crei.cat).
Problem sets:
Problem
sets are posted on Tuesday after class, and are due in class on Monday.
Problem set 4 – Matlab
code to help you solve the model in Dynare
Exam:
Wednesday
March 21, 9:00-13:00, room 40.006
Exam questions (part II of the course only)
Official
grading
guidelines
Supplementary
materials:
NBER business cycle dating
committee
Slides on business cycles: data and
facts
Matlab codes for
solving the RBC model with Dynare
Note on income and substitution effects on
consumption
Note on the half-life of
unemployment adjustment
Reading list
1. RBC model
*David Romer (1996). Advanced Macroeconomics, chapter 4
Kydland,
Finn E. and Edward C. Prescott (1982). Time to Build and
Aggregate Fluctuations. Econometrica, 50(6), pp.1345-1370.
*King, Robert G.
and Sergio T. Rebelo (1999). Resuscitating
Real Business Cycles. In: John B. Taylor and Michael Woodford (eds), Handbook of Macroeconomics,
volume 1B, pp.927-1007.
Hall, Robert E.
(1997). Macroeconomic Fluctuations and the Allocation of
Time. Journal of Labor Economics, 15(1), pp.S223-S250.
2. Business cycles
*Stock, James H.
and Mark W. Watson (1999). Business Cycle Fluctuations in
U.S. Macroeconomic Time Series. In: John B. Taylor and Michael Woodford
(eds), Handbook of
Macroeconomics, volume 1A, pp.3-64 (also NBER WP 6528).
Agresti, Anna-Maria, and Benoît Mojon (2001): "Some
Stylized Facts on the Euro Area Business Cycle" in I. Angeloni,
A. Kashyap, and B. Mojon
eds., Monetary Policy Transmission in the Euro Area, Cambridge University
Press. (also ECB WP #95)
Kydland, Finn, and Edward
C. Prescott (1990): "Business Cycles: Real Facts and a Monetary
Myth," Quartely Review, Federal Reserve Bank of
Minneapolis
Jordi Gali (1999). Technology, Employment, and the Business
Cycle: Do Technology Shocks Explain Aggregate Fluctuations? American Economic
Review, 89(1), pp. 249-271
Jonas D. M. Fisher
(2005). The Dynamic Effects of Neutral and
Investment-Specific Technology Shocks, Working paper.
Stock, James, and
Mark W. Watson (2005): "Understanding Changes in International Business
Cycle Dynamics" Journal of the European Economic Association, September
2005, v. 3, iss. 5, pp. 968-1006
Ramey, Garey, and Valerie A. Ramey (1995): "Cross-Country
Evidence on the Link Between Productivity and Growth," American Economic
Review, vol. 85, no. 5., 1138-1151
Backus, David K.,
Patrick J. Kehoe (1992): "International Evidence on the Historical
Properties of Business Cycles," American Economic Review 82, 864-888.
Stock, James, and
Mark W. Watson (2002): "Has the Business Cycle Changed and Why?," NBER Macroeconomics Annual 2002, MIT Press. (also NBER WP #9127).
3. Unemployment
*Richard
Rogerson, Robert Shimer and
Randall Wright (2005). Search Theoretic Models of the Labor Market. Journal
of Economic Literature, 43 (4): 959-988, sections 1-4.3
Christopher Pissarides (2000). Equilibrium Unemployment Theory, 2nd
edition. Cambridge: MIT Press, chapter 1
*Robert Shimer (2005). The Cyclical Behavior of Equilibrium
Unemployment and Vacancies, American Economic Review, 95(1): 25-49.
Marcus
Hagedorn and Iourii Manovskii (2007). The Cyclical Behavior of Equilibrium Unemployment
and Vacancies Revisited, working paper
Eva
Nagypal and Dale Mortensen (2007). More on
Unemployment and Vacancy Fluctuations, Review of Economic Dynamics, 10(3), pp.
327-347
4. Monetary policy
and inflation
David Romer (1996). Advanced Macroeconomics, chapter 6
*Jordi Galí (2008). Monetary
Policy, Inflation, and the Business Cycle, chapters 1, 2 and 3
Jordi Galí and Mark Gertler (2007).
"Macroeconomic Modeling for Monetary Policy Evaluation," Journal of
Economic Perspectives, 21(4), pp.25-46
Christiano,
Lawrence J., Martin Eichenbaum, and Charles L. Evans
(1998).
Monetary Policy Shocks: What Have We Learned
and to What End? in J.B. Taylor and M. Woodford eds.,
Handbook of Macroeconomics, volume 1A, pp.65-148
Jordi Galí (1999). Technology,
Employment, and the Business Cycle: Do Technology Shocks Explain Aggregate
Fluctuations?, American
Economic Review,
89(1), pp.249-271
Background reading:
Paul
Krugman on Economics
in the Crisis
Ricardo
Caballero on the Pretense-of-Knowledge
Syndrome
Robert
Solow, Sidney Winter, Scott Page, David Colander and V.V. Chari on Building
a Science of Economics for the Real World
Olivier
Blanchard on The
State of Macro
Narayana Kocherlakota. Some
Thoughts on the State of Macro
Paul
Krugman. How
Did Economists Get It So Wrong? NY Times Magazine, September 6, 2009
Letters
replying to the article
Mulligan, Casey B. (2009). Is Macroeconomics Off Track?,
The Economists' Voice: Vol. 6, Iss. 10, Article 6
Da Silva, Sergio (2010). Comment on Casey Mulligan:
Keynes in Both Fresh and Salt Water, The
Economists' Voice: Vol. 7, Iss. 2, Article 1
Barbera, Robert J. (2010).
If It Were a Fight, They
Would Have Stopped It in December of 2008, The Economists' Voice: Vol. 7, Iss. 2, Article 3
Mulligan, Casey B. (2010). Comment on Barbera:
Your Gift Will Make You Rich, The Economists' Voice: Vol. 7, Iss. 2, Article 4
Thijs van Rens | CREI | Department of
Economics and Business | Universitat Pompeu Fabra