This class will attempt to develop an evidence-based view of macroeconomics and finance, including both empirics and theory. Below is a syllabus, a preliminary timetable, and miscellaneous resources on researching, writing, presenting, coding, getting data etc.

Lectures

I have three objectives for this class. Lectures will be a mix of empirical methods from a theoretical and practical point of view, as well as of substantive content:

  • Empirical methods: theory. I’ll teach you how to think about identification in empirical macroeconomics in theory. We’ll focus in particular on how to think about the articulation between microeconomic (quasi-experimental) evidence and how that informs (and does not inform) macroeconomics. In particular, we’ll learn about “sufficient statistics”, how to use regional data to inform aggregates, etc. We’ll also learn about how the Lucas critique has led macroeconomists to move away from empirical research and towards more a-priori modelling of the economy, and I’ll explain why in my opinion this has gone too far. Empirical macroeconomics is possible, to a certain extent. We also have much more data than when the Lucas critique was first formulated.

  • Empirical methods: empirics. I’ll also teach you to practically do empirical research. This implies that I’ll spend almost as much time on presenting actual data, how there’s structured, and how to use them. I’ll also spend a lot of time on teaching you how to code. We’ll also spend a substantial amount of time on replications and extensions of existing papers.

These first two objectives are very complementary with an applied microeconomics class, where these methods should also be useful. (I encourage you to take as many Applied Microeconomics class as you can, but I think that applied microeconomists could also be interested in this class) More specific to macroeconomics and finance, I also have a third objective:

  • Substantive content. I also want to review what we know about how the macroeconomy works. Here, the class will be structured in a very standard way, as an advanced undergraduate macroeconomics class would be. I will first go through the very standard (mainstream) textbook view of macroeconomics and finance on each of the main topics: consumption, investment, the multiplier, the trade balance, etc. I’ll then spend a lot of time on what we know empirically about each of these topics. Perhaps more unusually, I’ll also emphasize what the shortcomings of the textbook view are (it often is violently rejected in the data) as well as try to reconcile the empirics and the theory: when possible, i’ll try to suggest how the theory should be amended to fit the data better. I will also emphasize what we do not know for sure, and where there’s important holes to fill in our knowledge, and I hope this will give you some inspiration for a potential 2nd year paper.
Date Lecture # Title
Oct 06 Lecture 1 Intro to Empirical Macro; National Accounting
Oct 08 Lecture 2 Identification
Oct 13 Lecture 3 Consumption and Saving
Oct 15 Lecture 4 Investment
Oct 20 Lecture 5 The Paradox of Thrift
Oct 22 Lecture 6 The Multiplier
Oct 27 Lecture 7 Asset Pricing, Bubbles, Financial Markets
Oct 29 Lecture 8 r-g, Savings Glut
Nov 03 Lecture 9 Housing, Land, Property Taxes
Nov 05 Lecture 10 Phillips Curve
Nov 10 Lecture 11 Inflation, Monetary Policy
Nov 12 Lecture 12 Open Economy
Nov 17 Lecture 13 Competitiveness and Productivity
Nov 19 Lecture 14 Pensions; Overlapping Generations
Nov 24 Lecture 15 Bubbles
Dec 01 Lecture 16 Public debt
Dec 03 Lecture 17 Exchange Rate Regimes
Dec 08 Lecture 18 2007 - 09 Financial Crisis
Dec 10 Lecture 19 Pareto Distributions

Grading

Grading will be based on replications and extensions of existing empirical macro ppaers, as well as on presentations of your own choosing:

  • Replications. html
  • Presentations. html