15.015 | Fall 2011 | Graduate

Macro and International Economics


1 The issues, short–term and long–term We will discuss the assigned case reading and preview the four frameworks used in this class: BBNN (particularly useful for thinking about current accounts and the balance of payments); ISLM (focused on how fiscal and monetary policy work); inflation and the broader sustainability of fiscal policy (the dangers of overheating); and financial sector dynamics (turns out to be the most difficult problem). Don’t worry if the first discussion of these elements is difficult. We will repeat various versions of these points many times during the course.
2 Determinants of long–term growth Most of this course is about relatively short–term macroeconomic dynamics and policies. Today’s session puts those issues in the longer–term context of growth and economic success (or failure) over decades.
3 Exchange rates for emerging markets The first class took a US–centric view of economic policy, while the second class put issues in their longer–term and cross–country perspective. This session takes the perspective of China and its economic development. The course will continue to ask why countries have such strongly different views on appropriate macroeconomic policies.
4 Exchange rates for industrialized countries In this session, we compare and contrast China’s current account position with that of the United States.
5 Banking crises This session and the next look at serious banking crises: then (1930s) and now (2007–09). We have to add financial sector considerations into the basic models covered so far for (a) the open economy (BBNN), and (b) how macroeconomic policy works (ISLM).
6 Modern financial crises In this session we continue to explore the topics introduced in Ses #5.
7 Japan’s lost decade What went wrong in Japan? Was this another form of financial sector disaster or a broader problem?
8 Crisis in Asia, 1997–98 Korea and other Asian crises hit an unexpected and severe crisis in fall 2007. How should think about that experience—and the economic recovery that followed—using the various frameworks we have developed so far?
9 Who is more prone to crisis now—Europe or the US? The eurozone is facing a serious economic crisis. How is this possible? What are the feasible options? Can European policymakers really find a decisive solution any time soon?
10–11 Recap This class will recap material covered in the class so far. The first nine sessions of this course cover a lot of ground and introduce a great deal of material. The last two sessions give us a chance to build intuition and understanding through various forms of review.
12 Final exam In–class final exam.

Course Info

As Taught In
Fall 2011
Learning Resource Types
Lecture Notes
Written Assignments with Examples