Advanced Macroeconomics

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He has 13 or 14 chapters. Each chapter is a fundamental section of macroeconomics, starting with economic growth, going on to endogenous growth and the economics of ideas, economics of information, economics of monetary policy, fiscal policy, employment—you name it. It’s the most comprehensive, and it’s accessible. The Government Budget Constraint The Ricardian Equivalence Result Ricardian Equivalence in Practice Tax-Smoothing Political-Economy Theories of Budget Deficits Strategic Debt Accumulation Delayed Stabilization Empirical Application: Politics and Deficits in Industrialized Countries 12.9 The Costs of Deficits 12.10 A Model of Debt Crises Problems

Let’s move on to your next economics textbook, Macroeconomics by Stephen Williamson, who is Professor and Stephen A. Jarislowsky Chair in Central Banking at the University of Western Ontario.E - Macroeconomics and Monetary Economics > E6 - Macroeconomic Policy Formation, Macroeconomic Aspects of Public Finance, Macroeconomic Policy, and General Outlook > E60 - General Professor Andrés Velasco, Dean of the School of Public Policy at LSE and co-author of the book, added: “Our textbook is designed to bridge the gap between advanced economic theory and practical application. It provides a rigorous treatment of salient economic issues in an accessible manner. We believe it should prove very useful to students, professors and practitioners alike”. This terrifically useful text fills the considerable gap between standard intermediate macroeconomics texts and the more technical text aimed at PhD economics courses. The authors cover the core models of modern macroeconomics with clarity and elegance, filling in details that PhD texts too often leave out. At the same time, the authors draw on their own extensive policy experience to provide thoughtful policy motivation and historical context throughout. Advanced undergraduates, public policy students and indeed many economics PhD students will find it a pleasure to read, and a valuable long-term resource.” — Kenneth Rogoff (Thomas D. Cabot Professor of Public Policy and Professor of Economics at Harvard University, former Chief Economist and Director of Research at the IMF)

Investment and the Cost of Capital A Model of Investment with Adjustment Costs Tobin’s q Analyzing the Model Implications Empirical Application: q and Investment The Effects of Uncertainty Kinked and Fixed Adjustment Costs Financial-Market Imperfections Empirical Application: Cash Flow and Investment Problems

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The course will teach you the main empirical business cycle characteristics of developed economies and the main empirical findings regarding the growth of developed and less developed nations. Our first economics textbook is Macroeconomics by Greg Mankiw, who is the Robert M Beren Professor of Economics at Harvard University and for years taught the introductory economics course there. He also has a blog to keep in touch with students. Greg Mankiw has himself written more than one economics textbook, what makes this one so good? More generally, there must be a lot of macroeconomics textbooks to choose from: why does his one stand out? There are also enormous differences in standards of living across parts of the world. Average real incomes in such countries as the United States, Germany, and Japan appear to exceed those in such countries as Bangladesh and Kenya by a factor of about 20.2 As with worldwide growth, cross-country income differences are not immutable. Growth in individual countries often differs considerably from average worldwide growth; that is, there are often large changes in countries’ relative incomes. The most striking examples of large changes in relative incomes are growth miracles and growth disasters. Growth miracles are episodes where growth in a country far exceeds the world average over an extended period, with the result that the country moves rapidly up the world income distribution. Some prominent growth miracles are Japan from the end of World War II to around 1990, the newly industrializing countries (NICs) of East Asia (South Korea, Taiwan, Singapore, and Hong Kong) starting around 1960, and China starting around 1980. Average incomes in the NICs, for example, have grown at an average annual rate of over 5 percent since 1960. As a result, their average incomes relative to that of the United States have more than tripled. Growth disasters are episodes where a country’s growth falls far short of the world average. Two very different examples of growth disasters are Argentina and many of the countries of sub-Saharan Africa. In 1900, Argentina’s average income was only slightly behind those of the world’s leaders, and it appeared poised to become a major industrialized country. But its growth performance since then has been dismal, and it is now near the middle of the world income distribution. Sub-Saharan African countries such as Chad, Ghana, and Mozambique have been extremely poor throughout their histories and have been unable to obtain any sustained growth in average incomes. As a result, their average incomes have remained close to subsistence levels while average world income has been rising steadily. Other countries exhibit more complicated growth patterns. Cˆ ote d’Ivoire was held up as the growth model for Africa through the 1970s. From 1960 to 1978, real income per person grew at an average annual rate of 3.2 percent. But in the three decades since then, its average income has not increased at all, and it is now lower relative to that of the United States than it was in 1960. To take another example, average growth in Mexico was very high in the 1950s, 1960s, and 1970s, negative in most of the 1980s, and moderate— with a brief but severe interruption in the mid-1990s—since then. Over the whole of the modern era, cross-country income differences have widened on average. The fact that average incomes in the richest countries at the beginning of the Industrial Revolution were not far above subsistence 2 Comparisons of real incomes across countries are far from straightforward, but are much easier than comparisons over extended periods of time. The basic source for crosscountry data on real income is the Penn World Tables. Documentation of these data and the most recent figures are available at http://pwt.econ.upenn.edu/.