Applied Macro- and International Economics

Readings

A series of case studies are required readings for the course. Additional case studies and textbook chapters are suggested as optional readings. The following texts are recommended:

[MFS] = Mankiw, N. Gregory, and Laurence Ball. Macroeconomics and the Financial System. Worth Publishers, 2010. ISBN: 9781429253673.

[M] = Mankiw, N. Gregory. Macroeconomics. 7th ed. Worth Publishers, 2009. ISBN: 9781429218870.

[KOM] = Krugman, Paul R., Maurice Obstfeld, and Marc Melitz. International Economics: Theory and Policy. Prentice Hall, 2011. ISBN: 9780132146654.

SES #	TOPICS	READINGS
1	Introduction and the money multiplier via babysitters	Optional “Money and Inflation.” Chapter 4 in [M]. “Price Levels and the Exchange Rate in the Long Run.” Chapter 15 in [KOM].
2	Germany and Zimbabwe: Monetary policy and the velocity theory of money	Required Moss, David A., and Julio J. Rotemberg. “German Hyperinflation of 1923.” Harvard Business School Case. Harvard Business School Publishing. Case: 9-798-048, January 5, 1998. Optional Wells, Wyatt, and David A. Moss. “Note on Money and Monetary Policy.” Harvard Business School Note. Harvard Business School Publishing. Note: 9-797-094, January 24, 1997. “Money and Inflation.” Chapter 4 in [M]. “Price Levels and the Exchange Rate in the Long Run.” Chapter 15 in [KOM].
3	The IS-LM model	Optional “Aggregate Demand I: Building the IS-LM Model.” Chapter 10 in [M]. “Aggregate Demand II: Applying the IS-LM Model.” Chapter 11 in [M].
4	Japan, Ireland, and the Great Depression: Applications of the IS-LM model: Fiscal policy and the Great Depression	Required McCraw, Thomas K. “Great Depression: Causes and Impact.” Harvard Business School Case. Harvard Business School Publishing. Case: 9-391-258, July 3, 1991. Kanno, Akiko, and Laura Alfaro. “Kinyuseiksaku: Monetary Policy in Japan.” Harvard Business School Case. Harvard Business School Publishing. Case: 9-708-017, January 8, 2008. Optional Kennedy, Robert E. “National Income Accounting.” Harvard Business School Case. Harvard Business School Publishing. Case: 9-797-075, November 15, 1996. “National Income: Where It Comes From and Where It Goes.” Chapter 3 in [M]. “Aggregate Demand I: Building the IS-LM Model.” Chapter 10 in [M]. “Aggregate Demand II: Applying the IS-LM Model.” Chapter 11 in [M]. “Output and the Exchange Rate in the Short Run.” Chapter 16 in [KOM].
5	AD-AS and long run adjustment: The connection to inflation	Required Kennedy, Robert E. “Fiscal Policy: Managing Aggregate Demand.” Harvard Business School Note. Harvard Business School Publishing. Note: 9-797-076, January 15, 1997. Revised March 30, 1998. Optional “Introduction to Economic Fluctuations.” Chapter 9 in [M]. “Aggregate Demand I: Building the IS-LM Model.” Chapter 10 in [M].
6	Central bank accounting	Optional “Money and Inflation.” Chapter 4 in [M]. “Investment.” Chapter 18 in [M].
7	World through inflation	Optional “The Data of Macroeconomics.” Chapter 2 in [M]. “Money and Inflation.” Chapter 4 in [M].
8	Banking crisis and accounting	Optional “Banking.” Chapter 18 in [MFS].
9	Theories of nominal exchange rates: Short-run and long-run	Optional “Money, Interest Rates, and the Exchange Rates.” Chapter 14 in [KOM]. “Price Levels and the Exchange Rate in the Long Run.“Chapter 15 in [KOM]. “Output and the Exchange Rate in the Short Run.” Chapter 16 in [KOM].
10	Fiscal currency crises (GAME: Greece, Argentina, Mexico, and Everyone else)	Required Di Tella, Rafael, and Eliseo Neuman. “Menem and the Populist Tradition in Argentina.” Harvard Business School Case. Harvard Business School Publishing. Case: 9-700-061, March 21, 2000. Di Tella, Rafael, and Ingrid Vogel. “2001 Crisis in Argentina: An IMF-Sponsored Default? (A).” Harvard Business School Case. Harvard Business School Publishing. Case: 9-704-004, October 27, 2003. Optional “Financial Crises.” Chapter 19 in [MFS]. “Developing Countries: Growth, Crisis, and Reform.” Chapter 22 in [KOM].
11	Self-fulfilling currency crises (MIT: Malaysia, Indonesia, and Thailand)	Required Alfaro, Laura, Rafael Di Tella, and Renee Kim. “Chronology of the Asian Financial Crisis.” Harvard Business School Case. Harvard Business School Publishing. Case: 9-708-001, February 8, 2008. Pill, Huw, Rafael Di Tella, and Jonathan Schlefer. “Financial Crisis in Asia: 1997-1998 (Abridged).” Harvard Business School Case. Harvard Business School Publishing. Case: 9-709-004, October 31, 2008. Optional Pill, Huw. “Responding to the 21st Century Financial Crisis.” Harvard Business School Case. Harvard Business School Publishing. Case: 9-798-090, April 13, 1998. “Developing Countries: Growth, Crisis, and Reform.” Chapter 22 in [KOM].
12	Exchange-rate regimes	Required Di Tella, Rafael, and Ingrid Vogel. “Exchange Rate Regimes.” Harvard Business School Case. Harvard Business School Publishing. Case: 9-704-038, May 5, 2004. Optional “The Open-Economy Revisited: The Mundell-Fleming Model and the Exchange-Rate Regime.” Chapter 12 in [M]. “The International Monetary System, 1870-1973.” Chapter 18 in [KOM]. “Macroeconomic Policy and Coordination Under Floating Exchange Rates.” Chapter 19 in [KOM].
13	Capital controls, exchange rate regimes, and unemployment: The unholy trinity	Required Abelal, Rawi, and Laura Alfaro. “Capital Controls.” Harvard Business School Case. Harvard Business School Publishing. Case: 9-702-082, April 3, 2002. Optional “The Open-Economy Revisited: The Mundell-Fleming Model and the Exchange-Rate Regime.” Chapter 12 in [M]. “Macroeconomic Policy and Coordination Under Floating Exchange Rates.” Chapter 19 in [KOM].
14	US financial crisis	Required Alfaro, Laura, Rafael Di Tella, Ingrid Vogel, and Matthew Johnson. “U.S. Current Account Deficit.” Harvard Business School Case. Harvard Business School Publishing. Case: 9-706-002, July 6, 2005. Alfaro, Laura, and Renee Kim. “The First Global Financial Crisis of the 21st Century.” Harvard Business School Case. Harvard Business School Publishing. Case: 9-709-057, April 7, 2009. Optional “Banking.” Chapter 18 in [MFS]. “Financial Crises.” Chapter 19 in [MFS]. “The Global Capital Market: Performance and Policy Problems.” Chapter 21 in [KOM].
15	Debate 1: The international role of the dollar
16	Debate 2: The Euro
17	Introduction to development economics	Required Kennedy, Robert E., and Katherine Marquis. “China: Facing the 21st Century.” Harvard Business School Case. Harvard Business School Publishing. Case: 9-798-066, February 13, 1998.