This is a course in the tools of modern macroeconomics. The emphasis will be on theory to help tune your intuition, and provide different lenses to interpret the macro-economy.
- Instructor: [email protected]
- Office Hours: Wednesday 3:30pm-4:30pm in Iona 206
- Teaching Assistant: Anubhav Jha, [email protected]
- Office Hours: Monday 5:00pm-6:00pm in Iona 441
- Prerequisites: A score of 68% or higher in ECON 305
- Textbook: None. I will post my notes online (modifications of notes graciously provided by Thomas J. Sargent). Pay attention and ask questions in class rather than writing down everything I say.
- Learning Environment: Come to class on time. No cellphones.
All materials will be provided online:
- Class Materials: https://github.com/jlperla/ECON307_2020
- Communications, Announcements, and Grades: http://canvas.ubc.ca
This material is best learned by doing exercises. When appropriate, I will review some of the problem set answers in class.
- 6 problem sets: 40%
- Midterm: 30%. I will provide many practice problems beforehand.
- Final Assignment: 30%
Missed Exam Policy: You are responsible for ensuring that you take these exams as scheduled; no make-up exams will be given. If you miss the mid-term for a valid, documented reason the mid-term weight will be added to the final; otherwise you receive zero for it. The final exam date will be announced by Student Services about half-way through the term. The final exam is part of the course and everyone MUST take it as scheduled. If you miss the final exam you will receive a mark of ZERO for it. There is no make-up final. Travel plans and/or cheap tickets are not a reason to miss the final. If you have a medical or other compelling reason why you cannot take the final exam at its scheduled time you must follow the formal process and get an Academic Concession from your Faculty Advising Office within 24 hours of the exam.
UBC provides resources to support student learning and to maintain healthy lifestyles but recognizes that sometimes crises arise and so there are additional resources to access including those for survivors of sexual violence. UBC values respect for the person and ideas of all members of the academic community. Harassment and discrimination are not tolerated nor is suppression of academic freedom. UBC provides appropriate accommodation for students with disabilities and for religious and cultural observances. UBC values academic honesty and students are expected to acknowledge the ideas generated by others and to uphold the highest academic standards in all of their actions. Details of the policies and how to access support are available here (https://senate.ubc.ca/policiesresources-support-student-success)
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Introduction and Tools
- Why models? Why math?
- Building to a full model of the macro economy
- Difference equations, functional equations, and "guess-and-verify"
- Probability and stochastic processes
- Constrained optimization
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Practice thinking dynamic and recursive
- Basic asset pricing example
- Present value and infinite geometric sums
- Linear state space models
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Consumption and Savings Decisions
- Permanent income and rational expectations
- Consumption growth and future income
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Expectations
- Rational vs. adaptive expectations and ``rational bubbles''
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Unemployment and Search
- The ``Lake Model''
- Markov chains and long-run unemployment rates
- Models of job search
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General Equilibrium
- Endogenizing wages and other prices
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Interest Rates and Complete Markets
- Theory of interest rates
- Lucas Model in an endowment economy
- Event trees and Arrow-Debreu complete markets model (maybe)
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Growth and Fiscal Policy
- Malthusian growth model
- Optimal growth and capital accumulation
- Distorting taxes on capital, labor, and consumption
- Government policy and budgets
- Foreseen and unforeseen policy changes