G 6216 Adv. Macro Analysis II, Spring 2011

Prof. Stefania Albanesi, Columbia University

Syllabus

Office Hours

Stefania Albanesi: W 5-7 PM 1103B IAB

Dmitriy Sergeyev: F 10-12 AM Uris Library

Recitation

Weekly R 12.20-2 PM Schermerhorn 608, starting on March 31.

Assignments

Assignment 1, due on Tuesday March 29 by 5 PM in Dmitriy’s mailbox.

Assignment 2, due on Monday April 11 in class. The solution to this homework will be discussed at recitation on 4/14.

Assignment 3, due on Monday April 18 in class. The solution to this homework will be circulated and discussed at recitation on 4/21.

Assignment 4, due in class on Wednesday April 27. The solution to this homework will be discussed at recitation on 4/28.

Assignment 5, due on Monday May 9 in Dmitriy’s mailbox. The solution to this homework will be posted here and discussed at recitation on 5/10.

Handouts

Three Notions of Private Sector Equilibrium

Business Cycles and Labor Markets

Implementability Constraints

Wedges in a Private Information Economy

Lectures

3/21: Business Cycles and Labor Markets SLIDES

3/23: Three Notions of Competitive Equilibrium (Dmitriy)

3/30: McCall’s Search Model of Labor Markets (LS Ch. 6)

4/4: Search in Equilibrium (LS Ch. 26, Sections 1-3, Pissarides Ch. 1)

4/11: Search in equilibrium with Endogenous Job Destruction (Pissarides Ch. 2)

4/13-14: The Shimer puzzle (Shimer 2005, Hall 2005, Hagedorn and Manovskii 2008) SLIDES (Updated with new material, typos corrected.)

4/20: Optimal Policies, Ramsey Approach SLIDES (See last slide for readings and Implementability Constraints handout above.)

4/25-27: Optimal policies, Mirrleesian approach SLIDES (See Wedges handout and readings on last slide.)

4/29: Optimal Unemployment Insurance Application (See Hopenhayn & Nicolini article. Skip quantitative section.)

Practice Exam Questions

Questions, Solutions

From LS: 26.4.a and c, 26.11 (related to search in general equilibrium), 15.1, 15.2, 15.3 (related to optimal policies)

On optimal taxation with private information: Question, Solution

Readings

All readings in the syllabus, except for textbook chapters, are available on line from authors’ homepages, from JSTOR or from Columbia Library’s online journal archive, here.

The required readings will be made available below or on Courseworks on an ongoing basis. Note that a few of the links can only be accessed from a Columbia (or other academic) ip address.

Stefania Albanesi. 2008. Social Insurance

. The New Palgrave Dictionary of Economics and Law (2nd ed.), Steven N. Durlauf and Lawrence Blume (eds), London: Palgrave MacMillan Limited.

Stefania Albanesi and Roc Armenter. 2007. Understanding Capital Taxation in Ramsey Models. Manuscript, Columbia University.

Burnside, Craig, Martin Eichenbaum, Sergio Rebelo. 1993. Labor Hoarding and the Business Cycle The Journal of Political Economy 101 (2).

V.V. Chari and Patrick Kehoe. 1999. Optimal Fiscal and Monetary Policies. Federal Reserve Bank of Minnesota Staff Report.

Larry Christiano and Terry Fitzgerald. The Business Cycle: It’s Still a Puzzle.

Cooley, Thomas F., and Edward C. Prescott. 1995. Economic Growth and Business Cycles. Cooley and Prescott Eds. Frontiers of Business Cycle Research, Princeton University Press.

Robert E. Hall. 2005. Employment Fluctuations with Equilibrium Wage Stickiness. American Economic Review 95(1).

Robert E. Hall. 2009. Reconciling Cyclical Movements in the Marginal Value of Time and the Marginal Product of Labor. Journal of Political Economy 117(2): 281-323.

Gary D. Hansen. 1985. Indivisible Labor and the Business Cycle. Journal of Monetary Economics 16: 309-337.

Gary D. Hansen and Randy Wright. 1992. The Labor Market in Business Cycle Theory. Quarterly Review 16( 2), Federal Reserve Bank of Minneapolis.

Hopenhayn, Hugo, and Juan Pablo Nicolini. 1997. Optimal Unemployment Insurance. The Journal of Political Economy 105(2): 412-438.