ECONOMICS 502: MACROECONOMICS II

Spring 2007

Instructor: Costas Azariadis (azariadi@wustl.edu) McM 256A, x55639 Office Hours: MW 10-11 and by appointment

Lectures: MW 1-2:30, Eliot 103

T.A.: Daniel Sanches (dsanche@artsci.wustl.edu) McM 331

Office Hours: TBA

Weekly Review: F 11-12:30, Eliot 103

Exams: In-class mid-terms, Feb.19 and April 2. Pre-final review, May 2. (Final TBA)

Final Grade: Problem sets (20%), mid-terms (40%), final (40%)

Goals: Starting where Economics 502 left off, we will examine key issues in growth, asset prices, business cycles, income distribution and macroeconomic policy from the unified viewpoint of dynamic general equilibrium (DGE) with both perfect and imperfect financial markets. We will learn to describe the core behavioral relations in macroeconomics as laws of motion, that is, as solutions to certain types of low-dimensional deterministic and stochastic dynamical systems. As we go along, we’ll dig deeper into the two workhorse paradigms of dynamic macroeconomics, overlapping generations and infinitely-lived households. We’ll assess how good these models, and their refinements, are at explaining basic empirical regularities in modern economies. Accomplishing these objectives will require your active engagement in class and much work on the problem sets. General References: No existing textbook is well matched with the topics covered in this course, and none is required. We’ll make intensive use of journal articles, and limited use of the following texts, handbooks and lecture notes:

Goals: Starting where Economics 502 left off, we will examine key issues in growth, asset prices, business cycles, income distribution and macroeconomic policy from the unified viewpoint of dynamic general equilibrium (DGE) with both perfect and imperfect financial markets. We will learn to describe the core behavioral relations in macroeconomics as laws of motion, that is, as solutions to certain types of low-dimensional deterministic and stochastic dynamical systems. As we go along, we’ll dig deeper into the two workhorse paradigms of dynamic macroeconomics, overlapping generations and infinitely-lived households. We’ll assess how good these models, and their refinements, are at explaining basic empirical regularities in modern economies. Accomplishing these objectives will require your active engagement in class and much work on the problem sets. General References: No existing textbook is well matched with the topics covered in this course, and none is required. We’ll make intensive use of journal articles, and limited use of the following texts, handbooks and lecture notes:

Costas Azariadis, Intertemporal Macroeconomics, Blackwell 1993 (IM) John Cochrane, Asset Pricing, Rev. ed., Princeton 2005 (AP)

David Romer, Advanced Macroeconomics, 3rd ed, McGraw-Hill 2006 (AM) Benjamin Friedman and Frank Hahn, Handbook of Monetary Economics, Elsevier 1990 (HME)

John Stachurski, Lecture Notes on Stochastic Economic Dynamics, Dec. 2006 (SED)