ECO 320L • Macroeconomic Theory
2:00 PM-3:00 PM
This course builds on the material presented in Introduction to Macroeconomics (ECO 304L). Major theoretical concepts, analysis tools, and empirical regularities are explored in the context of seven case studies. The first case study presents stylized facts of long-run economic growth in the United States. The second case demonstrates how changes in the links between technology and economic behavior might account for alernating episodes of rapid then slow economic growth. Case three examines the role of financial markets, emphasizing that the long run is created as people respond to short-run circumstances. Case four introduces the basics of the business cycle by addressing the phenomenon of so-called "jobless growth." The fifth case continues the examination of how the business cycle might be substantially altered in the New Economy. In the final two cases, expectations and resulting dynamic interactions are highlighted in the treatment of international flows of goods and financial assets, the labor market, and economic growth.
By the end of the semester, students should be able to address three sets of questions. (1)What determines the performance of an economy (e.g., its growth rate, its unemployment rate)? (2)What are the likely consequences of various government policies (regarding the supply of money, budget deficits, etc.)? (3)What are macroeconomists saying about current issues (e.g., globalization, prolonged recession in Japan)?