Giovanni Di Bartolomeo (gdibartolomeo@unite.it)

“Preliminaries”

• IS/LM model and AS/AS model

• Central banking

Class handouts

• The Phillips menu: Tinbergen and Theil approach.

• Expectations and Lucas critique.

• Friedman’s view and Lucas’ proposition.

• The Lucas supply curve and monetary ineffectiveness.

• The Barro Gordon model.

• The policy game approach.

Notes

• Business cycle indicators [N. Roubini] (web).

• US business cycle [NBER] (web).

• Linear regression (slides, application Phillips curve).

• Game theory at MIT (web).

References and readings

1. Hicks J,, Mr. Keynes and the “Classic”: A suggested interpretation, Econometrica, 1937 (link).

2. Phillips W., The relation between unemployment and the rate of change of money wage rates in the United Kingdom, 1861-1957, Economica, 1958 (link).

3. Samuelson P.A. and R.M. Solow, Analytical aspects of anti-inflation policy, American Economic Review, 1960 (link).

4. Friedman M., The role of monetary policy, American Economic Review, 1968 (link).

5. Friedman M., Inflation and unemployment, Nobel Memorial Lecture, 1976 (link).

6. T aylor, Staggered wage setting in a macro model, American Economic Review, 1979 (link).

7. Lucas R., Monetary neutrality, Nobel Memorial Lecture, 1995 (link).

8. Acocella N. and Ciccarone G., Trade unions, nonneutrality and stagflation, Public Choice, 1997 (link).

9. Cubitt R. Stagflationary bias and the interaction of monetary policy and wages in a unionized economy, Public Choice, 1997 (link).

10. Acocella and G. Di Bartolomeo, Non-neutrality of monetary policy in policy games, European Journal of Political Economy, 2004 (link).

11. Stock J.H. and M.W. Watson, Has the business cycle changed? Evidence and explanations, Monetary policy and uncertainty, Fed of Kansas City, 2003 (link).

12. King R.G., The Phillips curve and US macroeconomic policy: snapshots 1958-1996, Fed of Richmond Economic Quarterly Review, 2008, (link).