14.06 | Spring 2003 | Undergraduate

Intermediate Macroeconomic Theory


The text for the course is David Romer, Advanced Macroeconomics, Second Edition (New York: McGraw Hill, 2001). Other readings, listed below, include journal articles and selections from other books. A few other resources for the paper are listed at the end.

Outline of the Course

Neoclassical Growth Theory

Romer (2001), Chapter 1.

Solow, Robert M. “Technical Change and the Aggregated Production Function.” Review of Economics and Statistics 39 (1957): 312-320.

The “Solow Model” with Human Capital

Mankiw, N. Gregory, David Romer, and David N. Weil. “A Contribution to the Empirics of Economic Growth.” Quarterly Journal of Economics 107 (May 1992): 407-437.

Romer (2001), Chapters 3.8-3.9.

Knowledge Accumulation and Growth

Romer, Paul M. 1990. “Endogenous Technological Change.” Journal of Political Economy 98 (October, Part 2): S71-S102.

Romer (2001), Chapters 3.2-3.6.

Dynamic Optimization

Dixit, Avinish. Optimization in Economic Theory. Oxford: University Press, 1990. (Chapter on dynamic optimization and the maximum principle).

Dorfman, Robert. “An Economic Interpretation of Optimal Control Theory.” American Economic Review (December 1969): 817-31.

The Ramsey Problem

Blanchard, Olivier J., and Stanley Fischer. Lectures on Macroeconomics. MIT Press, 1989, Chapter 2.1-2.2.

Ramsey, F.P. “A Mathematical Theory of Saving.” Economic Journal 38 (December 1928): 543-559.

Debt and Deficits

Barro, Robert J. “Are Government Bonds Net Wealth?” Journal of Political Economy 82 (November/December 1974): 1095-1117.

Blanchard, Olivier J., and Stanley Fischer. Lectures on Macroeconomics. MIT Press, 1989, Chapter 2.3.

Business Fixed Investment

Chirinko, Robert S., and Huntley Schaller. “Business Fixed Investment and ‘Bubbles’: The Japanese Case.” The American Economic Review 91, 3 (2001): 663-680.

Jorgenson, Dale, and Robert Hall. “Tax Policy and Investment Behavior.” American Economic Review (June 1967).

Summers, Lawrence. “Taxation and Corporate Investment: A q-Theory Approach.” Brookings Papers on Economic Activity (1981).

Inventory Investment

Blinder, Alan, and Louis J. Maccini. “Taking Stock: A Critical Assessment of Recent Research on Inventories.” A Journal of Economic Perspectives, 5 (1991): 73-96.

Maccini, Louis J., Bartholomew Moore, and Huntley Schaller. “The Interest Rate, Learning, and Inventory Investment.” MIT Working Paper (2003): 03-04.

Ramey, Valerie A., and Kenneth D. West. “Inventories.” Chap. 13 in Handbook of Macroeconomics. Vol. 1B. Edited by John B. Taylor, Micheal Woodford, and Elsevier. 1999.

Savings and Investment in a Small, Open Economy

Blanchard, Olivier. “Debt and the Current Account Deficit in Brazil.” In Financial Policies and the World Capital Market: The Problem of Latin American Countries. Edited by Pedro Aspe Armella et. al. University of Chicago Press, 1983.

Fischer, Stanley, and Jacob Frankel. “Investment, the Two-Sector Model, and Trade In Debt and Capital Goods.” Journal of International Economics 2 (August 1972): 211-233.

Svensson, Lars E.O. “Oil Prices, Welfare, and the Trade Balance.” Quarterly Journal of Economics 99, 4 (November 1984): 649-672.

Real Business Cycle Models

Chang, Yongsung, Joao Gomes, and Frank Schorfheide. “Learning by Doing as a Propagation Mechanism.” American Economic Review 92, 5 (2002): 1498-1521.

Romer (2001), Chapter 4.

The following two books may be useful in addition to the material on the syllabus.

Chang, Ha-Joon. Kicking Away the Ladder-Development Strategy in Historical Perspective. London: Anthem Press, 2002.

Easterly, William. The Elusive Quest for Growth: Economists’ Adventures and Misadventures in the Tropics. Cambridge, MA: MIT Press, 2001.

Data for a wide variety of countries are available from the Penn World Tables, available on the web at http://datacentre2.chass.utoronto.ca/pwt/.

Course Info

As Taught In
Spring 2003
Learning Resource Types
Problem Sets with Solutions