EKN 813: First Semester, 2024

Course Related Materials

(A) Lucas Critique and Econometric Policy Evaluation (Reference: (i) Class Note on Lucas Critique by Leigh Tesfatsion; (ii) Class Note.)

Journal Article(s): Lucas Critique

(1) An Empirical Critique of Lucas Critique (T.D. Stanley)

(2) Assessing the Lucas Critique in Monetary Policy Models (Glen D. Rudebusch)

(3) Testing for the Lucas Critique: A Quantitative Investigation (Jesper Lindé )

(4) Are 'Deep' Parameters Stable? The Lucas Critique as an Empirical Hypothesis (Arturo Estrella and Jeffrey C. Fuhrer)

(5) The Lucas Critique and the Stability of Empirical Models (Thomas A. Lubik and Paolo Surico)

(6) Nobel Laureate Robert E. Lucas, Jr.: Architect of Modern Macroeconomics (V. V. Chari)

(B) Expectations

(i)  Lucas's Misperceptions Theory (References: (i) Some International Evidence on Output-Inflation Tradeoffs  (Robert E. Lucas, Jr.); (ii) Class Note.)

(ii) Expectation Formulations and its Policy Implications

Journal Article(s): Lucas Supply Curve and Policy Irrelevance

(1) Rational Expectations and the Theory of Price Movements (John F. Muth)

(2) Rational Expectations, the Real Rate of Interest and the Natural Rate of Unemployment (Thomas J. Sargent)

(3) Unanticipated Money Growth and Unemployment in the United States (Robert J. Barro)

(4) Unanticipated Money, Output, and the Price Level in the United States (Robert J. Barro)

(5) A Linearized Version of Lucas's Neutrality Model (Bennett T. McCallum)

(iii) Solution of Rational Expectations Models and Policy Neutrality

(a) Solving Rational Expectation Models (McCallum's Minimum State Variable (MSV) Approach) (Reference: (i) Class Note.)

Journal Article(s): Solving Rational Expectations Models

(1) On Non-Uniqueness of Rational Expectations Models: An Attempt at Perspective (Bennett T. McCallum) (NBER Working Paper Version) (Published as: On Non-Uniqueness of Rational Expectations Models: An Attempt at Perspective, Journal of Monetary Economics, Vol. 11 (March), pp.139-168, 1983.) 

(iv) Wage Rigidities and Rational Expectations Models  

(a) Staggered Wage Contracts (Reference: (i) Class Note.)

Journal Article(s): Wage Stickiness

(1) Long-Term Contracts, Rational Expectations, and the Optimal Money Supply Rule (Stanley Fischer)

(2) Staggered Wage Setting in a Macro Model (John B. Taylor)

(C) Dynamic Time Inconsistency (References: (i)  Advanced Macroeconomics, Chapter 10, Section 10.3  (David H. Romer); (ii) Class Note.)

Journal Article(s): Rules versus Discretion

(1) Rules Rather than Discretion: The Inconsistency of Optimal Plans (Finn E. Kydland and Edward C. Prescott)

(D) Business Cycles

(i) Business Cycle Facts and Real Business Cycle (References: (i) Class Note on Business Cycle by Christian Zimmermann, (ii) Class Note 1, (iii) Class Note 2)

Journal Article(s): Business Cycle Facts and Real Business Cycle

(1) Time to Build and Aggregate Fluctuations (Finn E. Kydland and Edward C. Prescott) - (The article that started it all!)

(2) Macroeconomic Fluctuations in Developing Countries: Some Stylized Facts (Pierre-Richard Agénor, C. John McDermott and Eswar S. Prasad)

(3) A Toolkit for Analyzing Nonlinear Dynamic Stochastic Models Easily (Harald Uhlig)

Contact Details:

Room 2-04, Tukkiewerf Building, Department of Economics,

University of Pretoria,

Pretoria 0002, South Africa.

Tel: +27 12 420 3460, E-mail: Rangan dot Gupta () up () ac () za.