Econ 7718                                                                            Fall 2015
                                            Advanced Macroeconomics I
                                                     Economics 7718, Fall 2015
                     Instructor:   Bulent Unel                           Classroom:      1409 BEC
                     Office:         2435 BEC                              Class time:     T–Th 10:30–11:50am
                     Email:        bunel@lsu.edu                         Office hours:     T–Th 1:00–2:30pm
                    Course Description
                    This course is intended to help students to understand important macroeconomic issues
                    such as economic growth, consumption, investment, and unemployment at an advanced
                    level. It also introduces students to important mathematical techniques (such as dynamical
                    systems, dynamic programming), which are commonly used in research.
                    The textbook is Advanced Macroeconomics, by David Romer, 4th edition. When covering
                    mathematical techniques, I will use my lecture notes. Course materials will be posted on
                    the course site on Moodle.
                    Some excellent references for further study of topics treated in the course are Models
                    for Dynamic Macroeconomics, by Fabio-Cesare Bagliano and Giuseppe Bertola; Macroe-
                    conomic Theory, by Michael Wickens, 2nd edition; Recursive Macroeconomic Theory, by
                    Lars Ljungqvist and Thomas J. Sargent, 3rd edition; and Economic Growth, by Robert J.
                                                       nd
                    Barro and Xavier Sala-i-Martin, 2     edition. The last one provides a comprehensive treat-
                    ment of economic growth.
                    Although I will post lecture notes on the math techniques, there are several excellent ref-
                    erences that you may want to consult. Optimization in Economic Theory, by A.K. Dixit
                    provides an handsome coverage of static and dynamic optimization in economics; Dynamic
                    Economics, by Adda and Cooper is an excellent source on dynamic programming; and Fun-
                                                                                                       th
                    damental Methods of Mathematical Economics, by Chiang and Wainwright (4               edition)
                    provides a good coverage of all topics at a more introductory level.
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           Econ 7718                                      Fall 2015
           Homework
           It is expected that the students have read the assigned material prior to class for the back-
           ground necessary to properly participate in the discussion and think critically about the
           concepts addressed. As a general policy, for each hour you are in class, you should plan to
           spend at least two hours preparing for the next class.
           There will be 5–6 problem sets. The grades you get from homework will not be included in
           your course grade. However, doing and submitting your homework will be very helpful for
           your exams.
           Exams and Grades
           There will be two midterms and a final exam. The first midterm will be on Thursday, Octo-
           ber 1; and the second midterm will be on Thursday, November 5. The final exam will cover
           the entire course and will be given on Monday, December 7 (Exam Time: 10:00-12:00pm).
           The midterm dates are tentative, depending on our pace in the course, I may change it in
           future.
           Each midterm will be 30%, the final exam will be 40% of your overall grade. The university
           mandated us to use plus/minus grading system, and thus your final letter grade may have
           a plus/minus sign (e.g., A- or C+).
           COURSEOUTLINE
           1. Economic Growth
             • The Solow model, Sections 1.1–1.5 in Romer (2012)
             • The Ramsey model, Sections 2.1–2.7 in Romer (2012)
             • The Diamond (OLG) Model, Sections 2.8–2.10 in Romer (2012)
             • Endogenous Growth Models, Section 3.4 in Romer (2012) and lecture notes
             • Growth Empirics, Sections 1.6–1.7 & 4.1–4.2 in Romer (2012) and lecture notes
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         Econ 7718                           Fall 2015
         2. Consumption Theory
          • Consumption under certainty, Chapter 1 in Bagliano and Bertola (2004)
          • Consumption under uncertainty, Chapter 1 in Bagliano and Bertola (2004)
         3. Investment Theory
          • Investment under certainty, Sections 9.1–9.6 in Romer (2012)
          • Investment under uncertainty, Sections 9.7 and 9.9 in Romer (2012)
         4. Equilibrium Unemployment Theory
          • Search Models of Labor Markets, Chapter 5 in Bagliano and Bertola (2004)
          • Job Matching and Unemployment Dynamics, Chapter 10 in Romer (2012)
         Mathematical Techniques
          • Dynamical systems
          • Continuous-time dynamic optimization
          • Dynamic Programming
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