THE UNIVERSITY OF THE WEST INDIES, MONA Department of Economics

ECON 6024 MACROECONOMIC THEORY I SEMESTER I 2012

Lectures: Tuesdays/Thursdays 9:00-10:59 am Venue: GLT1 McIntyre Building, Block D

Lecturer: Dr. Tamoya A. L. Christie Email: tamoya.christie@uwimona.edu.jm Office: Room 214, Block I, McIntyre Building Phone: (876) 970-6562 (Internal extension 3562) Office Hours: Tuesdays 11am-12noon; Wednesdays 1:00-3:00 pm Course Description: Macroeconomics is the study of the national economy as a whole. In that regard, we examine the behavior of aggregate variables, such as output (GDP), the price level, money supply, aggregate private and government spending, taxation, debt, and growth rates. We study the interactions among them, and their relationships with other variables. In Part I of this two part sequence, we cover topics of economic growth and long-run economic development. In Part II we focus on topics dealing with short-run fluctuations. Modes of Delivery: This class meets twice a week. Regular problem sets and discussion questions will be given throughout the course. Full participation, which contributes to your final grade, is expected. In addition each student is required to make a presentation on one of the selected topics at the end of the course. Course Prerequisite: ECON 2002 Intermediate Macroeconomics Resources: Required Texts Barro, Robert and Xavier Sala-i-Martin (2004). Economic Growth 2nd Ed., MIT Press. Romer, David (2006), Advanced Macroeconomics, 3rd Edition, McGraw-Hill-Irwin. Mankiw, N. Gregory (2010), Macroeconomics, 7th Edition, Worth Publishers. Supplementary Texts: Supplementary Readings, Handouts, and Lecture Notes See OurVLE.

Assessment: Class presentation and participation Mid-semester Examination Final Examination

10% 30% 60%

Notes for Presentations: Student participation is heavily weighted in this course. Each student is required to make a class presentation. The papers are listed in the course outline. Each presentation should last no more than 30 minutes and should cover the following areas: What is the paper about? What is the main methodology? What are the main conclusions of the paper? Offer a critique of the paper. At the end of the presentation, the student is required to pose at least two questions to classmates to stimulate discussion of the paper. Course Syllabus The course outline provides a general plan; deviations may be necessary. 1. Introduction *Romer Introduction * Barro and Sala-i-Martin Introduction Howitt and Weil Economic Growth, manuscript NEOCLASSICAL GROWTH THEORY 2. The Solow-Swan Growth Model *Romer Ch. 1 *Barro and Sala-i-Martin Ch. 1.1, 1.2 Mankiw Ch. 7 & 8 Problem Set 1 3. The Ramsey-Cass-Koopmans Model

*Romer Ch. 2A *Barro and Sala-i-Martin Ch. 2 4. Overlapping Generations Model *Romer Ch. 2B *Barro and Sala-i-Martin Ch. 3.8 Problem Set 2

NEW GROWTH THEORY

2

5. Endogenous Growth Models *Romer Ch. 3A *Barro and Sala-i-Martin Ch. 1.3, 4-5 Problem Set 3 SPECIAL TOPICS Growth Empirics Institutions and Growth Finance and Growth Trade and Growth

*Barro and Sala-i-Martin Ch. 12 *Levine, R., & Renelt, D. (1992). A Sensitivity Analysis of Cross-Country Growth Regressions. American Economic Review, 82(4), 942-963. *Acemoglu, D., Johnson, S., Robinson, J., & Thaicharoen, Y. (2003). Institutional causes, macroeconomic symptoms: volatility, crises and growth. Journal of Monetary Economics 50, 49-123. *Levine, Ross, 2005. "Finance and Growth: Theory and Evidence," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 12, pages 865-934 Elsevier. (Also available as NBER Working Paper No. 10766, September 2004). See Section III. Rioja, F., & Valev, N. (2004). Does One Size Fit All?: A Reexamination of the Finance and Growth Relationship. Journal of Development Economics, 74(2), 429-447. *Harrison, A. (1996) Openness and Growth: A Time Series, Cross-Country Analysis for Developing Countries. Journal of Development Economics, 48, 419-447. *Selected articles from IMF (2007) Financial Globalization: The impact on trade, policy, labour and capital flows, Washington, D.C. Taking the Plunge Without Getting Hurt Lifting All Boats Trade, Growth, and Poverty Learning Outcomes Upon successful completion of the course, the student should be able to:

Identify and explain the determinants of long-run economic growth. Apply and interpret the traditional models of economic growth.

Distinguish between the predictions of neo-classical growth theories and the new growth theories. Explain the concept of convergence and give empirical evidence. Calculate the essentials of growth accounting and give empirical evidence. Differentiate between level effects and growth effects of the Solow model. Solve economic dynamic optimization problems using dynamic programming methods. Synthesize the empirical evidence on cross-country economic growth. Discuss government policies which support economic growth.