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Advanced Macroeconomic Theory-I (E-610)

Prerequisites For this Course:

None

Text Book(s):

Advanced Macroeconomics by David Romer (DR) (Latest Edition)

Reference Book(s):

  • Lectures in Macroeconomics by Blanchard and Fischer. (BF)
  • Acemoglu, Daron, 2009, Introduction to Modern Economic Growth. (AD)
  • Ljungqvist, Lars and Thomas J. Sargent, 2012, Recursive Macroeconomic Theory. (LT)
  • Chugh, Sanjay K. (2015). Modern Macroeconomics, MIT Press. (CS)
  • Stiglitz, Joseph E. (2016). Contemporary Issues in Macroeconomics: Lessons from The Crisis and Beyond (JS)
  • Advanced Macroeconomics: An Easy Guide by Filipe Campante, Federico Sturzenegger, Andrés Velasco. (FFA)

Course Description

This graduate-level course provides an in-depth examination of advanced concepts and theories in macroeconomics, focusing on both theoretical frameworks and empirical analysis. Students will delve into the intricacies of macroeconomic phenomena, exploring their causes, consequences, and policy implications.

Course Objectives

In this course, students are expected to acquire the tools necessary to read and understand the issues in economic literature that are essential for dissertation level research. Also, students should be able to demonstrate an in-depth competency in the theory and application of the core areas of macroeconomics and should be able to apply appropriate theories, models and tools to solve macroeconomic problems.

Learning Outcomes

Upon completion of this course, students will:

  • Demonstrate a comprehensive understanding of advanced macroeconomic theories and models.
  • Critically evaluate empirical evidence and apply quantitative methods to analyze macroeconomic data.
  • Assess the effectiveness and limitations of macroeconomic policies in addressing economic fluctuations and promoting long-term growth.
  • Develop the analytical skills necessary to contribute to academic research or policy analysis in the field of macroeconomics.

Lecture Plan

Session Topic Readings

(Book Chapters/pages/Research papers/Handouts/Web links, including video links

Activities

Quizzes/Assignments/Term papers

Instructor

(If multiple instructors are teaching a course, mention the instructor’s name for each module/session

Module # 1: Modern Macroeconomic Problems and Concepts
1 An overview of macroeconomics and some macroeconomic facts (country-wise outlook on main indicators of macroeconomy) Handouts Home task Dr. Haider Ali
2 Modern macroeconomics and its central issues JS Chapter 1, CS Chapter 10, reference articles Home task Dr. Nadia Hassan
3 Analytical skill for empirical macroeconomics Reference links and websites Assignment # 1 Dr. Nadia Hassan
Module # 2: Models of Growth
4 Prosperity and growth; long-run process of growth; stylized facts and recent findings, stability of the worldwide economic growth, and cross-country income differences AD Chapter 1 Quiz # 1 Dr. Haider Ali
5 Solow growth framework DR Chapter 1, AD Chapter 2, CS Chapter 25 Home task Dr. Haider Ali
6 Neoclassical growth AD Chapter 5, CS Chapter 26 Assignment # 2 Dr. Haider Ali
7 Exogenous vs Endogenous Growth DR Chapter 3 Quiz # 2 Dr. Haider Ali
8 MIDTERM EXAM
Module # 3: Intertemporal Models of Consumption and Investment
9 Consumption under Certainty BF Chapter 2, DR Chapter 6, FFA Chapter 11 Home task Dr. Haider Ali
10 Consumption under Uncertainty BF Chapter 2, DR Chapter 8, FFA Chapter 12 Assignment # 3 Dr. Haider Ali
11 Investment and the Cost of Capital: a model for investment with adjustment costs DR Chapter 9, FFA Chapter 13 Home task Dr. Nadia Hassan
12 Imperfections in the Financial Market: Empirical Application: Cash Flow and Investment DR Chapter 10, Reference articles Quiz # 3 Dr. Nadia Hassan
Module # 4:Monetary and Fiscal Policy in Macroeconomic Models
13 Monetary policy; microeconomic foundations of stabilization policy; Optimal monetary policy in a forward-looking model DR Chapter 12, CS Chapter 17 Home task Dr. Nadia Hassan
14 Financial Frictions, House Prices, and Unconventional Monetary Policy Reference Articles Assignment # 4 Dr. Nadia Hassan
15 Budget deficits and fiscal policy DR Chapter 13, CS Chapter 19 & 20 Home task Dr. Nadia Hassan
16 Monetary – Fiscal Interactions; Optimal Fiscal and Monetary Policy CS Chapter 20, reference articles Quiz # 4 Dr. Nadia Hassan
FINAL TERM EXAM