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Economics 1420/ API 126Spring 2009Martin Feldstein Katherine Baickermfeldstein@harvard.edu, kbaicker@hsph.harvard.edu868 3905 492-5209Robert Stavins Robert LawrenceRobert_Stavins@harvard.edu Robert_Lawrence@harvard.edu495-1820 495-1118Teaching FellowsJeffrey Clemens (Clemens@fas.harvard.edu)Stephen Miran (Miran@fas.harvard.edu)David Seif (dgseif@gmail.com
 
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AMERICAN ECONOMIC POLICY
Classes will be held in Emerson Hall 210 every Monday, Wednesday, and Friday, exceptFebruary 16, March 6, 13 and 20 and April 24Sections will be held once a week, at times to be arranged.
•
Prerequisite: Economics 1010a or 1011a, API-101, or permission of one of the instructors.Grades will be determined as follows:
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a midterm exam given in class on March 11--25 percent
•
two four-page memos due at the beginning of class on March 16 and April 27 --25 percent
•
a final exam given on
may xx
--50 percent
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Paper Option: Students have the option of writing a 20-25 page research paper (due on May5) in lieu of the two four-page memos. The paper will count for 25 percent of the grade. Studentswho choose this option can count Economics 1420 as one of the courses that fulfill theeconomics department writing requirement.
READINGS
Martin Feldstein,
"Housing, Credit Markets and the Business Cycle," in the 2007 KansasCity Federal Reserve Annual Conference Volume , Housing Finance and Monetary Policy,2008.http://www.nber.org/papers/w13471.pdf?new_window=1
 Introduction: Where are we? How did we get here?
(January 28)1.
 National Bureau of Economic Research, ―Business Cycle Expansions and Contractions.‖
http://www.nber.org/cycles.html2.
 Business Cycles, Inflation andMonetary Policy
(January 30, February 2 and 4)
Syllabus
Monday, March 09, 20095:24 PM
 
 
Ec 1420 Page 1
 
Christina Romer and David Romer, ―What Ends Recessions?‖
 NBER 1994 Macroeconomics Annual
, pp. 13-57.http://www.nber.org/papers/w4765.pdf?new_window=1
John Taylor ―An Historical Analysis of Monetary Policy Rules,‖ in John B. Taylor (ed.)
 Monetary Policy Rules
, University of Chicago Press, 1999.http://www.nber.org/papers/w6768.pdf?new_window=1
Martin Feldstein "The Welfare Cost of Permanent Inflation and Optimal Short-Run EconomicPolicy," Journal of Political Economy, Vol. 87, No. 4, 1979, pp 749-768.http://www.nber.org/papers/w0201.pdf?new_window=1
Ben S. Bernanke, ―A Perspective on Inflation Targeting, Remarks at the Annual WashingtonMartin Feldstein ―Liquidity Now!‖ Wall Street Journal, September 12,
2007Policy Conference of the National Association of Business Economists, Washington, D.C.March 25, 2003. (A pdf will be e-mailed out the week of this lecture.)http://www.nber.org/feldstein/wsj091207.html
Martin Feldstein ―Enough with the Interest Rate Cuts,‖ Wall Street Journal, April 15, 2008
http://www.nber.org/feldstein/wsj41508.html3.
 National Saving, Growth and Income Distribution
(February 6)
Edward Gramlich ―The Importance of Raising National Saving,‖ Benjamin Rush Lecture,
Dickinson College, March 2, 2005.http://www.federalreserve.gov/boarddocs/speeches/2005/20050302/default.htmLusardi, Annamaria, Jonathan Skinner, Steven Venti.
―Savings puzzles and savings policies inthe US.‖
https://depot.erudit.org/retrieve/687/000036pp.pdf Parker, Jonathan.
―Spendthrift in America: two decades of decline in the US saving rate.‖
http://www.nber.org/papers/w7238.pdf?new_window=1
Martin Feldstein "The Return of US Saving", Foreign Affairs, May/June 2006, pp 87-93.http://www.nber.org/feldstein/returnofsaving.pdf 
Martin Feldstein and Charles Horioka, ―Domestic Saving and International Capital Flows,‖
 Economic Journal
, June 1980, pp. 314-329. (A pdf will be provided for those who do not have
access to the NBER‘s working paper series.)
http://www.nber.org/papers/w0310.pdf?new_window=1
Martin Feldstein “Did Wages Reflect Growth in Productivity,”
Journal of Policy Modeling, 30(2008) pp 591-94.http://www.nber.org/feldstein/WAGESandPRODUCTIVITY.meetings2008.pdf 4
.
 Budget Deficits and the National Debt 
(February 9)
Laurence Ball and N. Gregory Mankiw, ―What Do Budget Deficits Do?‖
 Budget Deficits and  Debt: Issues and Options
, Federal Reserve Bank of Kansas City, 1995, pp. 95-119.https://www.kc.frb.org/Publicat/sympos/1995/pdf/s95manki.pdf http://www.nber.org/papers/w8488.pdf?new_window=1
Douglas Elmendorf, Jeffrey Liebman, and David Wilcox, ―Fiscal Policy and Social SecurityPolicy During the 1990s,‖ in
 American Economic Policy in the 1990s
, Jeffrey Frankel and PeterOrszag, editors, 2002, pp. 0-24 & 63-80 (the remaining pages are assigned for a later class). (A
 pdf will be provided for those who do not have access to the NBER‘s working paper series.)
 
Ec 1420 Page 2
 
Congressional Budget Office,
The Long-Term Budget Outlook 
, December 2007, pp1-17. http://www.cbo.gov/ftpdocs/88xx/doc8877/12-13-LTBO.pdf Office of Management and Budget
 , Budget of the United States Government: AnalyticalPerspectives
, Fiscal Year 2008, pp. 183-187. Note: Page numbers refer to the page numbers of the document itself, not the page number of the pdf.http://www.whitehouse.gov/omb/budget/fy2008/pdf/spec.pdf Congressional Budget Office,
 Economic and Budget Outlook2009 -2019
.http://www.cbo.gov/ftpdocs/99xx/doc9958/01-08-Outlook_Testimony.pdf http://www.cbo.gov/ftpdocs/99xx/doc9957/01-07-Outlook.pdf 5.
 Housing and Financial Markets
(February 11)
Martin Feldstein, ―How to Stop the Mortgage Crisis,‖
The Wall Street Journal
, March 7,2008.http://www.nber.org/feldstein/wsj03072008.html
Martin Feldstein, ―How to Help People Whose Home Values Are Underwater,‖
The Wall Street  Journal
, November 18, 2008.http://www.nber.org/feldstein/wsj100408.html
Martin Feldstein, ―The Problem Is Still Falling House Prices,‖
The Wall Street Journal
, October4, 2008.http://www.nber.org/feldstein/wsj100408.html
Edward L. Glaeser, ―Why We Should Let Housing Prices Keep Falling,‖
 New York Times
,October 7, 2008.http://economix.blogs.nytimes.com/2008/10/07/why-we-should-let-housing-prices-keep-falling/ 
―Popping Sounds: House prices are falling just about everywhere,‖
The Economist 
, December 4,2008.http://www.economist.com/finance/displaystory.cfm?story_id=12725898Doug Diamond and Anil Kashyap.
―Everything you need to know about the financial crisis.‖
http://freakonomics.blogs.nytimes.com/2008/10/15/everything-you-need-to-know-about-the-financial-crisis-a-guest-post-by-diamond-and-kashyap/ 6.
 Keynesian Economics: Retreat and Return
(February 13, 18, 20)
Martin Feldstein, ―The Retreat from Keynesian Economics,‖
The Public Interest, 1981.
Martin Feldstein, ―Rethinking the Role of Fiscal Policy,‖ forthcoming in the American
Economic Review, May 2009 (Available on American Economic Association website forJanuary 2009 annual meeting)
John Taylor, ―The Lack of an Empirical Rationale for a Revival of Discretionary FiscalPolicy,‖ forthcoming in the American Economic Review, May 2009
http://www.aeaweb.org/annual_mtg_papers/2009/retrieve.php?pdfid=387
 
Alan Auerbach, ―Implementing the New Fiscal Activism,‖ forthcoming in the American
 
Economic Review, May 2009.http://www.aeaweb.org/assa/2009/retrieve.php?pdfid=324http://www.nber.org/feldstein/wsj120507.html
Martin Feldstein, ―How to Avoid a Recession,‖ Wall Street Journal, Dec 5, 2007.Lawrence Summers, ―Why America Must Have a Fiscal Stimulus,‖
Financial Times
, January 6,2008.http://belfercenter.ksg.harvard.edu/publication/17845/why_america_must_have_a_fiscal_stimulus.html
 
Douglas Elmendorf and Jason Furman, ―If, When, How: A Primer on Fiscal Stimulus,‖
 
Brookings Institution Hamilton Project Strategy Paper, January 2008.
 
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danwang

Thank you so much!

reply05 / 25 / 2009
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