Teaching Spring Term 2013
You find information about this course's timetable in the university calendar
||This lecture proposes an overview of standard macroeconomic issues: capital accumulation and savings; inter-country convergence; long-run growth; innovation and intellectual property rights; public expenditures, taxes and deficit; business fluctuations...
Those issues will be addressed using a standard theoretical, macroeconomic, dynamic model that will be modified from one chapter to the other.
||The objective of the lecture is threefold.
First and foremost, it aims at making students more familiar with economic reasoning and with the methodology of economic theory. This methodological aspect is of major importance.
Its second objective is to develop students' understanding of some standard macroeconomic issues involving time.
Third, on the different issues addressed, the lecture will provide facts and orders of magnitude of the related macroeconomic phenomena and will relate theoretical findings with current political debates.
The lecture is organized as follows.
Chapter 1 will clarify concepts of income and growth and will provide empirical evidence of their international distribution. We will use this chapter as an introduction to questions tackled in following chapters.
Chapters 2 and 3 will set up the basic dynamic macroeconomic benchmark that will be used all along. In this presentation, we will start from stylized facts on growth, we will discuss the critical assumptions of the model, we will recall some basics in economic theory and we will introduce standard technical tools to be used all along.
The examination of this model will allow us to answer some classical questions regarding capital accumulation and the factors of long-term growth.
Chapter 4 will theoretically investigate inter-country development differences (convergence/divergence). This will be related to empirical findings of the literature.
Chapter 5 we will sophisticate the standard growth model to consider human capital, learning-by-doing and public productive infrastructure. In our discussion, we will try to understand the resulting market failures and policy implications.
Moreover, relating these features to returns to scale will give us some new intuition on the factors of long-term growth.
Chapter 6 will present the main insight of the modern literature on innovation and growth. Some new economic concepts will be introduced. This will allow us to discuss economic incentives to perform R&D, vertical versus horizontal innovations, creative destruction, effects of the enforcement of intellectual property rights, challenges regarding new technologies... These questions will be linked to current policy debates. Empirical findings will help us draw policy implications.
Chapter 7 will examine and discuss the effects of government expenditures, taxes and public deficit. In a dynamic setting, the analysis will lead to striking results challenging the traditional view.
Chapter 8 will introduce transitory shocks on government spending and on total productivity. The effects of these shocks on future periods will give some insight on the literature about business cycles that will be introduced.
There is a logical interdependence between chapters that will be emphasized.
Students will be given a list of questions on economic dynamics, addressed in the lecture, to be prepared for the oral examination. During the exam, students are expected to bring structured, synthesized and convincing answers using the methodology of economic theory.
||A series of slides will be provided for each chapter. Nevertheless, this material is not expected to be sufficient to fully understand the lecture. That is why attendance is strongly recommended.
||Blanchard OJ and Fischer S (2001), Lectures on Macroeconomics, MIT Press
Romer D (2000), Advanced Macroeconomics, McGraw-Hill
Barro RJ and Sala-i-Martin X (2004), Economic Growth, MIT Press
Students are expected to have attended:
- one basic course on macroeconomics
- one basic course on microeconomics