The objective of this course is to obtain deeper understanding about some important macroeconomic phenomena observed in real economy, like economic growth, unemployment, sustainability of public debt and so on.
To this end, we will extend the models in Macroeconomics I to more sophisticated ones.
By the end of this course, students will be able to:
1) Examine the role of capital accumulation, population growth, and technological progress for economic growth both qualitatively and quantitatively.
2) Grasp the role of social security system (e.g., public pension system) for intergenerational redistribution of wealth.
3) Understand the reason why the time inconsistency problem arises when the central bank determines the optimal monetary policy.
4) Investigate the effect of future income uncertainty on the consumption-saving decision.
Solow model, steady state, golden rule, technological progress, balanced growth path, convergence, current account deficit, external debt, frictional unemployment, structural unemployment, Ricardian equivalence theorem, Phillips curve, time inconsistency, precautionary savings
|✔ Specialist skills||✔ Intercultural skills||Communication skills||Critical thinking skills||Practical and/or problem-solving skills|
I will give students homework assignments after we have finished each topic covered in this course.
|Course schedule||Required learning|
|Class 1||Solow Model (1): Setup of the Model, Steady State and the Golden Rule of Capital Stock||Construct the Solow model, and derive the steady state.|
|Class 2||Solow Model (2): The Role of Technological Progress||By incorporating the technological progress into the baseline Solow model, derive the balanced growth path.|
|Class 3||Solow Model (3): Some Empirical Facts on Economic Growth||Obtain deeper understanding about actual patterns of growth from some empirical analysis.|
|Class 4||International Macroeconomics (1) Balance of Payments||Understand the Balance of Payments|
|Class 5||International Macroeconomics (1) Mundell-Fleming Model||Set up the model and derive the equilibrium.|
|Class 6||Theories of Labor Market and Unemployment (1): Unemployment Theory||Understand several form of unemployment.|
|Class 7||Theories of Labor Market and Unemployment (2): Measurement of Distortion in Labor Market||Understand the measurement of distortion in labor market.|
|Class 8||Midterm Evaluation||Review of the first half of the course (classes 1–7) and midterm exam.|
|Class 9||Macroeconomic Impacts of Fiscal Policy (1): Ricardian Equivalence Theorem||Understand the Ricardian equivalence theorem.|
|Class 10||Macroeconomic Impacts of Fiscal Policy (2): 社会保障||Discuss the social security system|
|Class 11||Macroeconomic Impacts of Monetary Policy (1): Phillips Curve||Understand the definition of Phillips curve, and then grasp how the curve is depicted in Japan.|
|Class 12||Macroeconomic Impacts of Monetary Policy (2): Problem of Time Inconsistency||Discuss the time inconsistency problem of monetary policy.|
|Class 13||Theory of Consumption under Uncertainty||Understand how consumers decide their optimal consumption/saving plan under uncertainty.|
|Class 14||Theory of Investment under Uncertainty||Understand how firms decide their optimal investment plan under uncertainty.|
|Class 15||Review||Briefly review the topics covered in this course and discuss the remaining issues.|
Handouts or slides used for each class will be available on the corresponding page of Tokyo Tech OCW.
Mankiw, N.G. Macroeconomics, Worth Publishing.
Futagami, K. and Hori, K. Macroeconomics, Yuhikaku (in Japanese)
Shibata, A. and Unayama, T. First Steps in Macroeconomics, Yuhikaku (in Japanese)
Hiraguchi R. and Inaba, M. Macroeconomics: From Basic Principles to Applications, Yuhikaku (in Japanese)
The final grade is based on examination (70%) and homework assignments (30%).
The prerequisite for this course is Macroeconomic I.