Intermediate Macroeconomics

Econ 399 Intermediate Macroeconomics

Fall 2018

Dr. Joshua R. Hendrickson

University of Mississippi

1. My Contact Information and Office Hours:
   1. Office: 229 N. Holman Hall
   2. Phone: ext. 7579
   3. Email: jrhendr1@olemiss.edu
   4. Office hours are Mondays from 9 - 11. If you cannot meet during this time, please make an appointment.
2. Overview:
   1. The purpose of this class is to provide an overview of macroeconomics. I am going to do this in a somewhat unconventional way. Rather than simply going through various theoretical models for particular topics, my way of teaching this course is to introduce important topics and provide some theory, some history, and some evidence. We will simultaneously work through models and relevant papers (accessible to undergraduates) in the academic literature. My goal is to give students a practical overview of important topics in macroeconomics.
3. Textbooks:
   1. Intermediate Macroeconomics by Julio Garín, Robert Lester, and Eric Sims. This book is available for free as a pdf here (Eric Sims’s website at Notre Dame). This book is denoted by GLS in the course outline below.
4. Grades:
   1. The course will be based on two exams and approximately 4 or 5 problem sets. The exams will be worth 80% of your final grade (40% each). The problem sets will be worth the remaining 20% of your final grade. If you miss the first exam, there will not be a make-up exam; your final exam will count for 80% of your grade. Please note that this is not an invitation to skip the first exam. If you miss the exam, you must provide a valid excuse (a valid excuse is documented evidence that you missed class for what the university defines to be an excused absence).
5. Student Disability Services:
   1. If you are entitled to any type of accommodation from Student Disability Services, please let me know as soon as possible. I am happy to provide any necessary accommodations. However, please note that these accommodations are not retroactive.
6. Course Outline
   1. Below is an overview of the content that we will be studying in this course. For each subject, I list the relevant chapters in the required textbook as well as a list of supplemental readings. Note that I will often lecture on the supplemental readings.
      1. Preliminaries
         • Macroeconomic Data (GLS, Ch. 1)
         • What is a Model? (GLS, Ch. 2)
      2. The Pre-Industrial Economy
         • Heckscher, Eli F. 1954. An Economic History of Sweden. Cambridge: Harvard University Press, Ch. 2 - 3.
         • Saving in a Storage Economy
      3. Economic Growth and Development
         • The Industrial Revolution
           • McCloskey, Donald. 1994. “The Industrial Revolution: A Survey,” in Floud and McCloskey (eds.), The Economic History of Britain, 1700-Present, 2nd ed.
           • Facts About Economic Growth (GLS, Ch. 4)
         • Some Growth Models
           • The Solow Model (GLS, Ch. 5, 6, 7)
           • The Overlapping Generations Model (GLS, Ch. 8)
         • Beyond the Factor of Production Models: The Development of the State and Modern Institutions
           • Barzel, Yoram. 2000. "Property Rights and the Evolution of the State." Economics of Governance, Vol. 1, p. 25 - 51.
           • Batchelder, Ronald W. and Herman Freudenberger. 1983. “On the Rational Origins of the Modern Centralized State.” Explorations in Economic History, Vol. 20, p. 1 - 13.
           • Hendrickson, Joshua R., Alexander W. Salter, and Brian C. Albrecht. 2018. “Preventing Plunder: Military Technology, Capital Accumulation, and Economic Growth.” Journal of Macroeconomics, Forthcoming.
           • North, Douglass C. 1991. “Institutions.” Journal of Economic Perspectives, Vol. 5, No. 1, p. 97 - 112.
      4. Money and Exchange
         • Kiyotaki, Nobuhiro and John Moore. 2002. “Evil is the Root of All Money.” American Economic Review, Vol. 92, No. 2, p. 62 - 66.
         • Alchian, Armen A. 1977. “Why Money?” Journal of Money, Credit and Banking, Vol. 9, No. 1, p. 133 - 140.
         • Kiyotaki, Nobuhiro and Randall Wright. 1993. “A Search-Theoretic Approach to Monetary Economics.” The American Economic Review, Vol. 83, No. 1, p. 63 - 77.
         • Glasner, David. 1989. Free Banking and Monetary Reform. Cambridge: Cambridge University Press, Ch. 1 and 2.
      5. Money, Inflation, and Interest Rates (GLS, Ch. 20)
      6. Financial Markets and Asset Pricing
         • Banks and Financial Markets (GLS, Ch. 30)
         • The Money Creation Process (GLS, Ch. 31.1 - 31.3)
         • Consumption Smoothing and Saving (GLS, Ch. 9, 10 )
         • Equity Pricing (GLS, Ch. 34.1)
         • Arbitrage Pricing
           • Ross, Stephen A. “The Arbitrage Theory of Capital Asset Pricing.” Journal of Economic Theory, Vol. 13, p. 341 - 360.
           • Derman, Emanuel. 2002. “The Perception of Time, Risk and Return During Periods of Speculation.” Quantitative Finance, Vol. 2, p. 282 - 296.
         • The Efficient Markets Hypothesis
           • Fama, Eugene F. 1970. “Efficient Capital Markets: A Review of Theory and Empirical Work.” Journal of Finance, Vol. 25, No.2, p. 383 - 417.
           • Malkiel, Burton G. 2003. “The Efficient Markets Hypothesis and Its Critics.” Journal of Economics Perspectives, Vol. 17, p. 59 - 82.
           • Malkiel, Burton G. 2005. “Reflections on the Efficient Markets Hypothesis: 30 Years Later.” The Financial Review, Vol. 40, p. 1 - 9.
           • Fama, Eugene F. “Two Pillars of Asset Pricing.” Nobel Prize Lecture, December 8, 2013.
         • Bubbles?
           • GLS, Ch. 34.4
           • Garber, Peter M. 1990. “Famous First Bubbles.” Journal of Economic Perspectives, Vol. 4, No. 2, p. 35 - 54.
           • Thompson, Earl A. 2006. “The Tulipmania: Fact or Artifact?” Public Choice, Vol. 130, p. 99 - 114.
      7. Money and Business Cycles
         • Thompson, Earl A. 1974. “The Theory of Money and Income Consistent with Orthodox Value Theory.” in G. Horwich and P.A. Samuelson (eds.), Trade, Stability and Macroeconomics: Essays in Honor of Lloyd Metzler. Academic Press.
         • Friedman, Milton and Anna J. Schwartz. 1963. “Money and Business Cycles.” Review of Economics and Statistics, Vol. 45, No. 1, p. 32 - 64.
      8. The Great Depression
         • The International Gold Standard
           • Barro, Robert J. 1979. “Money and the Price Level Under the Gold Standard.” The Economic Journal, Vol. 89, No. 353, p. 13 - 33.
           • McCloskey and Zecher. 1973. “How the Gold Standard Worked, 1880-1913,” in J. A. Frenkel and H. G. Johnson (eds.), The Monetary Approach to the Balance of Payments, p. 357 - 385
         • Theories and Evidence
           • GLS, Ch. 31.4.1
           • Batchelder, Ronald W. and David Glasner. 1991. “Debt, Deflation, The Great Depression, and the Gold Standard.” UCLA Working Paper No. 611.
           • Sumner, Scott. 1992. “The role of the international gold standard in commodity price deflation: Evidence from the 1929 stock market crash.” Explorations in Economic History, Vol. 29, No. 3, p. 290 - 317.
           • Hamilton, James D. 1987. “Monetary Factors in the Great Depression.” Journal of Monetary Economics, Vol. 19, p. 145 - 169.
           • The Neoclassical Model (GLS, Ch. 17 - 18)
           • Cole, Harold L. and Lee E. Ohanian. 1999. “The Great Depression in the United States from a Neoclassical Perspective.” Federal Reserve Bank of Minneapolis Quarterly Review, Vol. 23, No. 1, p. 2 - 24.