Advanced Macroeconomics

Feb 102016

Syllabus of the course

Starting day: 10 Mar 2016

Instructors: Prof. Fabio Cerina, Prof. Miguel Leon-Ledesma, Prof. Alessio Moro

Module 1: Models of Structural Change, Prof. Alessio Moro.

Lecture 1: Facts of structural transformation and benchmark model of structural transformation, 12 Mar 2016, h. 10:30 – 12:30

Reading:

Berthold Herrendorf, Richard Rogerson, Ákos Valentinyi, 2014. Chapter 6 – Growth and Structural Transformation, Volume 2, Handbook of Economic Growth.

Lecture 2: Economic forces behind structural transformation, 10 Mar 2016, h. 12:30 – 14:00

Readings:

Kongsamut, Piyabha, Rebelo, Sergio, Xie, Danyang, 2001. Beyond balanced growth. Review of Economic Studies 68, 869–882.
Ngai, L. Rachel, Pissarides, Chrisopher A., 2007. Structural change in a multisector model of growth. American Economic Review 97, 429–443.
Berthold Herrendorf, Richard Rogerson, Ákos Valentiny. 2013. Two Perspectives on Preferences and Structural Transformation. American Economic Review, 103, 2752-2789.

Lecture 3: Structural transformation, growth and volatility, 17 Mar 2016, h. 10:30 – 12:30

Readings:

Echevarria,Cristina, 1997. Changes in sectoral composition associated with economic growth. International Economic Review 38, 431–452.
Koren, Miklos, and Silvana Tenreyro. 2007. Volatility and Development, Quarterly Journal of Economics 122 (1): 243-287.
Moro, Alessio, 2012. The Structural Transformation Between Manufacturing and Services and the Decline in the US GDP Volatility, Review of Economic Dynamics 12 (3), 402-415.
Carvalho, Vasco, Gabaix, Xavier, 2013. The great diversification and its undoing, American Economic Review 103(5): 1697-1727.
Moro, Alessio, 2015. Structural Change, Growth and Volatility, forthcoming in American Economic Journal: Macroeconomics.

Lecture 4: Home production and Structural Transformation, 17 Mar 2016, h. 12:30 – 14:00

Readings:

Ngai, L. Rachel, Pissarides, Chrisopher A., 2008. Trends in Hours and Economic Growth. Review of Economic Dynamics, 11, 239-256.
Ngai, L. Rachel, Petrongolo, Barbara., 2014. Gender Gaps and the Rise of the Service Economy. IZA DP8134. CEPR DP9970.
Moro, Alessio, Moslehi, Solmaz, Satoshi Tanaka, 2015. Does Home Production Drive Structural Transformation? Monash DISCUSSION PAPER 20/15

Module 2: Topics in international economics, Prof. Miguel Leon-Ledesma.

– Lecture 5: Intertemporal models of the current account, 12 Apr 2016, h. 10:00 – 13:00

Reading:

Chapters 4.1.1 and 4.3 of León-Ledesma, M.A. and Mihailov, A. (forthcoming). Advanced International Macroeconomics and Finance. Oxford University Press. (I will be providing incomplete versions of the relevant chapters)
Obstfeld and Rogoff, Ch. 1, sections 1.1.1 to 1.1.6, 1.6. and 2.1
Chang, Y. and Smith, R.T. (2014) ‘Feldstein-Horioka Puzzles’, European Economic Review 72, 98-112.
Taylor, A.M., (2002) ‘A century of current account dynamics,’ Journal of International Money and Finance 21, 725-748.
Ghosh, Atish R. (1995), “International Capital Mobility Among the Major Industrialised Countries: Too Little or Too Much?” The Economic Journal 105, 107-128.

Lecture 6: Risk, uncertainty and asset markets, 13 Apr 2016, h. 10:00 – 13:00

Reading:

Chapters Ch. 5.1.1-5.1.7 and 5.3 of León-Ledesma, M.A. and Mihailov, A. (forthcoming). Advanced International Macroeconomics and Finance. Oxford University Press. (I will be providing incomplete versions of the relevant chapters)
Obstfeld-Rogoff (1996), Ch. 5.1.1-5.1.7 and 5.3.
Asdrubali, Pierfederico and Soyoung Kim (2008), “Incomplete Intertemporal Consumption Smoothing and Incomplete Risk Sharing,” Journal of Money, Credit and Banking 40, 1521-1531.
Pakko, M.R. (1998) ‘Characterizing international consumption correlations’ Review of Economics and Statistics 80, 169-174.
Becker, Sascha O. and Mathias Hoffmann (2006), “Intra- and International Risk Sharing in the Short Run and the Long Run,” European Economic Review 50, 777-806.

Lecture 7: International business cycles, 14 Apr 2016, h. 10:00 – 13:00

Reading:

León-Ledesma and Mihailov (forthcoming) Chapter 7.3.
M and Gopinath, G. 2007, Emerging market business cycles: the cycle is the trend, Journal of Political Economy, 115 (1).
Backus, D. and G. Smith, 1993, Consumption and Real Exchange Rates in Dynamic Economies with Non-Traded Goods”, Journal of International Economics, 35, pp.297-316.
Baxter, M. and M. Crucini, 1995, Business cycles and the asset structure of foreign trade, International Economic Review, 36 (4), pp.821-854.
Corsetti, G. Dedola, L. and Leduc, C. 2008, International risk sharing and the
transmission of productivity shocks, Review of Economic Studies, 75 (2).
Schmitt-Grohe, S. and M. Uribe, 2003, Closing small open economy models, Journal of International Economics, 61 (1), pp.163-181.
Stockman, A. and L. Tesar, 1995, Tastes and technology in a two-country model of the business cycle: explaining international comovements, American Economic Review, 85 (1), pp.168-185.

Module 3: Agglomeration, growth and trade Prof. Fabio Cerina.

Lecture 8: Models of growth and agglomeration, 20 April 2016, h. 11:00 – 13:00

Readings:

Baldwin, R. E. and Martin, P. (2004). ”Agglomeration and regional growth”, in Henderson J. V. and Thisse J. F. (eds.), Handbook of Regional and Urban Economics, vol. 4, Elsevier, Amsterdam, 2671-2711.
Martin, P. and Ottaviano, G. I. P. (1999). “Growing locations: Industry location in a model of endogenous growth”. European Economic Review, 43: 281-302.
Baldwin, R. E., Martin, P. and Ottaviano, G. I. P. (2001). “Global income divergence, trade, and industrialization: The geography of growth take-offs”. Journal of Economic Growth, 6: 5-37.

Lecture 9: Agglomeration, aggregate growth and regional imbalances, 20 April 2016, h. 14:00 – 16:00

Readings:

Martin, P. (1999). “Public policies, regional inequalities and growth”. Journal of Public Economics 73: 85-105.
Dupont, V., Martin, P. (2006). “Subsidies to poor regions and inequalities: some unpleasant arithmetic”. Journal of Economic Geography 6: 223-240.
Cerina F., Mureddu F. (2014), ”Is agglomeration really good for growth? Global efficiency, interregional equity and uneven growth”, Journal of Urban Economics 84: 9-22.

Lecture 10: ‘New’ new trade theory: firms’ heterogeneity, 21 May 2016, h. 11:00 – 13:00

Readings:

Melitz, M. (2003). “The impact of trade on intra-industry reallocations and aggregate industry productivity”. Econometrica, 71: 1695-1725.
Melitz, M. and Ottaviano, G. I. P. (2008). “Market size, trade, and productivity”. Review of Economic Studies, 75: 295-316.

Lecture 11: ‘New’ new economic geography: agglomeration and growth when firms are heterogenous, 21 April 2016, h. 14:00 – 16:00

Readings:

Baldwin, R. E. and Okubo, T. (2006). “Heterogeneous firms, agglomeration and economic geography: Spatial selection and sorting”. Journal of Economic Geography, 6: 323-346.
Ottaviano G.I.P. (2010), “‘New’ new economic geography: firm heterogeneity and agglomeration economies”, Journal of Economic Geography, 11: 231-240.
Baldwin R., Robert-Nicoud F., (2008), ”Trade and growth with heterogeneous firms”, Journal of International Economics, 74: 21-34.

Course Material

There is no textbook for this course. See the reading lists above.

Assessment

The grading will be based on two parts: