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ECON 6140 Macroeconomic Analysis II, SPRING 2017

Course Content:

1. Introduction to Macro Data


PROBLEM SET 1, Solution, PS1.m, ChainAdd.m, TPOP.xls

2. Real Business Cycle Theory

2.1 Properties and Solution of the Basic RBC Model


PROBLEM SET 2 , Solution, PS2Q1.m, rbcmodel_ps2q2A.m, rbcmodel_ps2q2B.m

2.2 Performance and Some Extensions of the RBC Model

  • Indivisible Labor: Hansen, Gary, 1985, ``Indivisible Labor and the Business Cycle'', Journal of Monetary Economics, 16, 309-27
  • Investment Technology Shocks and Variable Capacity Utilization: Greenwood J., Hercowitz Z. and Huffman G., 1988, ``Investment, Capacity Utilization, and the Real Business Cycle'', American Economic Review, 78 (3)
  • Small Open Economy: Mendoza, Enrique, 1991, ``Real Business Cycles in a Small Open Economy'', American Economic Review, 81 (4) , Steve, Simon, Kevin and Adam
  • Business Cycles in a Small Open Economy Isabel Correia, Joao C. Neves and Sergio Rebelo, 1995, ``Business Cycles in a Small Open Economy'', European Economic Review 39.
  • Two Country Model: Backus, D., Kehoe, P. and Kydland, F., 1992 ``International Real Business Cycles'', Journal of Political Economy, 100 (4) , Joao, Zhou, Alexander and Raul
  • News Shocks: Jaimovich, N. and Rebelo, S., 2007 ``Can News About the Future Drive the Business Cycle'', American Economic Review, 99(4) , Yang, Muye, Haimeng and Pengfei
  • Government Consumption Shocks: Christiano, L.J. and M. Eichenbaum, 1992, ``Current Real Business Cycle Theories and Aggregate Labor Market Fluctuations'', American Economic Review 82(3), 430- 50
  • Adjustment Costs: Cogley T. and Nason J., 1995, ``Output Dynamics in Real-Business-Cycle Models'', The American Economic Review 85 (3)
  • Home Production: Benhabib J., Rogerson R., Wright R., 1991, ``Homework in Macroeconomics: Household Production and Aggregate Fluctuations '', Journal of Political Economy 99(6) , Martha, Daniel, Nikolai and Rene
  • Habit Persistence and Asset Prices: Boldrin, Christiano and Fisher, 2001, ``Habit Persistence, Asset Returns, and the Business Cycle'', American Economic Review vol. 91(1), , Qinshu, Qinghan, Yuanning and Bin

3. Labor Markets


PROBLEM SET 3 , Solution, PS3.m

4. Money and Output: Basic Facts and Flexible Price Models

  • Walsh, Carl E. (2003): Monetary Theory and Policy, Second Edition, MIT Press, chapters 1, 2.3, 3.2 and 3.3


5. Measurement Without Much Theory

5.1 Evidence on Technology Shocks


5.2 Evidence on Monetary Policy Shocks

5.3 Evidence on Fiscal Policy Shocks

Slides on tax policy shocks , Slides on government purchase shocks

PROBLEM SET 4, BP_data.xls, Solution, PS4_BPvar.m

6. Models of Nominal Rigidities


PROBLEM SET 5, solution, PS5fiscal1.m, PS5fiscal2.m, PS5fiscal3.m