Economics 7050

Macroeconomic Theory I

Fall 2005

MW 8:30-10:20am

 

 

 

Basma Bekdache, Ph.D.

FAB 2101, 577-3231

Office hours: Friday 8:45-10:30am, and by appointment.

 

Required Text: Romer , D. Advanced Macroeocnomics,  2nd  edition, MacGraw-Hill, 2001.

 

Recommended Text:  Branson, W.H., Macroeconomic Theory and Policy,  Third Edition, Addison-Wesley, 1989

 

Email: b.bekdache@wayne.edu.   Email is the best way to reach me everyday. Please email me if you have any questions or concerns.

 

Web:  www.econ.wayne.edu/bbekdac

 

Course Requirements:  There will be two exams, a midterm worth 45% of your total grade and a  comprehensive final exam worth 55%. There will be no make up exams except in situations where a valid excuse is produced prior to the exam.

 

 

The following is a brief outline of the topics we are expected to cover over the semester along with the corresponding chapters from the textbooks. I have also listed a few articles from economics  journals.  These can be obtained through the library’s online databases including JSTOR and Econlit. We may add other articles to the list later in the semester.

 

NOTE 1: The focus of the class and the exams will be on the lecture material. Therefore, students who are unable to attend class due to an emergency must obtain copies of the lecture notes from their classmates.

NOTE 2:  I expect students to be familiar with Comparative Static Analysis (Chiang, chapters 6-9).  You need to see me otherwise.

 

Academic Integrity: It is expected that all students do their own work

on exams and quizzes. Anyone caught cheating will automatically get a FAILING

grade on the exam. This will be the minimum action taken. Please refer to the

page on Academic Dishonesty in the WSU Student Handbook.

 

 

Outline

                                                                                (Subject to revision)

 

  1. Introduction: 

 

        Blanchard , O. 2000. "What do we know about Macroeconomics that Fisher and Wicksell did not?", Quarterly Journal of Economics ( November), 1375-1409.

 

        Mankiw, N.G., 1990, A quick refresher course in macroeconomics, Journal of Economic Literature, 28, 1645-1660.

        Review of simple Keynesian income determination model (Branson Chs 1-3)

 

      2. The Static Equilibrium Model:

 

              A. IS/LM, Aggregate demand, Aggregate Supply: Romer, Ch 5 (selected sections), Branson, Chs 4-8.

 

             B. Monetary and fiscal policy in the static equilibrium model : Branson , Ch 9.

 

C.     Price and Wage adjustment and implications on AS: Romer, ch 6 (selected sections), Branson, Ch 10.

 

D.     Rational Expectations and long-term contracts: Branson, Ch 11.

 

              Lucas, Robert E., Jr. 1973. “ Some international Evidence on Output-Inflation Tradeoffs.” American Economic Review 63 (June): 326-334.

 

             Fischer, Stanley. 1977. “ Long-Term Contracts, Rational Expectations and the Optimal Money Supply Rule.” Journal of Political Economy 85 (February): 191-205. Reprinted in Mankiw and Romer (1991).

 

E.      Extensions of the model: Branson, Ch 16.

        

            Ball, Laurence, Mankiw, N. Gregory, and Romer, David. 1988. “The New Keynesain             Economics and the Output-Inflation Tradeoff”, Brookings Paper on Economic Activity, No 1, 1- 65. Reprinted in Mankiw and Romer (1991).

 

           Bernanke, Ben S.  and Blinder, Alan S.  1988.  “Credit, Money and Aggregate Demand.” American Economic Review 78 (May): 435-439. Reprinted in Mankiw and Romer (1991)

 

      3. Behavioral foundations:

 

                Consumption (Romer Ch 7 Branson Ch 12).

                Investment (Branson, ch 13).

                Money demand and supply (Branson, Chs 14,15).

 

         Poole, William. 1970. “Optimal Choice of Monetary Instruments in a Simple Stochastic Macro Model.” Quarterly Journal of Economic 84 (May): 197-216.