W3213: Intermediate Macroeconomics

Professor Xavier Sala-i-Martin

Fall 2009 Syllabus

There is NO textbook for this course.

If you want to purchase a textbook, the best options are Stephen Williamson's "Macroeconomics" (Second Edition) published by Addison Wesley


Robert Barro's "Macroeconomics" (5th Edition, MIT Press).

List of Topics

  1. Introduction. Short-Run Business Cycles versus Long-Run Growth. Theories and Empirical Evidence. Classical versus Keynesian Economics. 
  2. The Long Run:
    1. The State of the World
    2. Physical Capital Accumulation: The Solow-Swan Model.
    3. The AK model. The Convergence Debate
    4. Poverty Traps and Development Aid
    5. Human Capital Accumulation: Fertility, Education, and Health
    6. The Economics of Ideas: History of Technology. Technological progress. Time inconsistency. Health Research.
  3. The Short Run:
    1. Equilibrium: Classical Macroeconomics
      1. Robinson Crusoe: Leisure and Consumption in a Static Model. Preferences and Budget Constraints. Substitution and Wealth Effects. 
      2. Credit Markets, Leisure and Consumption in a Dynamic Model. Intertemporal Substitution Effects. Theories of the Consumption Function. Aggregate Supply and Demand Functions.
      3. Money Demand.
      4. Putting things together: The Basic Market Clearing Model. The Neutrality of Money.
      5. Investment, Firm Behavior and Business Cycles. 
    2. Disequilibrium: Keynesian Economics
      1. Nominal Stuff: The three basic assumptions that distinguish the classical approach from the Keynesian approach. The IS/LM model. Keynesian Monetary Policy. 
    3. Government and Fiscal Policy
      1. Public Spending. Its role in the Market Clearing Model. Its role in the Keynesian model. 
      2. Taxes, Transfers, and Distortions. The Laffer Curve and Supply Side Economics. 
      3. Debts, and Deficits. The Keynesian approach. The Ricardian Equivalence Theorem of Debt Neutrality. 


        CLASS GRADE=0.2*PS+0.3*M+0.5*F

where PS is the grade of Problem Sets, M is the grade for the midterm and F is the grade for the Final. The grade for the midterm will count ONLY if it is favorable (that is, if M>F, then M gets 30% of the weight and F gets 50% but if M<F, then M gets 0% and F 80%).