Course Meeting Times

Lectures: 2 sessions/week, 1.5 hours/session

Recitations: 1 session/week, 1 hour/session

Prerequisites 

14.01 Principles of Microeconomics and 14.02 Principles of Macroeconomics

Objectives

1. The first objective is to introduce a set of issues and questions that are central to modern macroeconomics, such as the following:
   1. What drives economic growth?
   2. What explains income differences across or within countries?
   3. Why do economies undergo business cycles or financial crises?
   4. What is the role of central banks and government in protecting growth or fighting recessions?
2. The second, and the more methodological objective, is to familiarize you with a set of tools that macroeconomists have developed over time to think about these and other issues. We will analyze a number of theoretical macroeconomic models in detail, and we will also confront some of these macroeconomic models and mechanisms with data.
3. The third objective, as illustrated by the paper requirement, is to help you engage with macroeconomic issues, using some of the tools you will learn in this course. 

Paper Requirement

The paper counts for 30% of the overall grade and is due in three installments: 

• A one-page proposal will count for 10% of the paper grade.
• A first draft of the paper will count for 50% of the paper grade. 
• The final draft of the paper is due on the day of the last lecture and will count for 40% of the paper grade.

It is important to meet the earlier deadlines if you want to meet the final deadline with a decent paper. We reserve the right to overweight the final draft if it shows substantial improvement relative to the proposal and/or the first draft. More details about the paper requirement are provided in a separate document.

Homework Requirement

There will be four problem sets that will account for 10% of your grade in total. No assignment will be accepted after noon on the due date. To insure you against bad shocks, only the best three assignments (out of the four in total) will be counted towards the homework portion of your grade. This gives you the flexibility even to skip one assignment. However, it is best not to exercise this option—working out the problem sets is the best way to prepare for the exams. You are permitted to collaborate on the problem sets. However, each person must submit a separate write-up. If you choose to work within a group, each person is asked to list the members of the group at the top of the submission.

Exams and Grading

There will be two in-class exams, which will take place in lieu of a regular class and will last 1.5 hours each. The two exams together will count for 50% of the grade. Again, as an insurance against bad shocks, your better exam will be overweighted: it will count for 30% of the total grade (and your worse exam will count for 20%). Apart from this insurance, and barring verifiable medical emergencies, do not expect any other leniency or excuse for missing exams/deadlines.

Textbook and Readings

The course does not have any required textbooks. We will mainly rely on lecture slides. The following textbooks are recommended and provide useful references for parts of the course:

Jones, Charles. Macroeconomics, third or fourth edition. W.W. Norton & Company, Inc., 2020. ISBN: 9780393417326.

Romer, David. Advanced Macroeconomics, fourth or fifth edition. McGraw Hill, 2011. ISBN: 9780073511375.

The Jones book covers most of the topics but at a less advanced level than in the lectures. It also provides more examples and case studies. Hence, it is a useful reference to reinforce your understanding of the topics. The Romer book covers most of the topics in the second half of the course (on business cycles) at a mathematically more advanced level than in the lectures. Hence, it is a useful reference to obtain a deeper understanding of the topics. It is also a good investment if you are contemplating graduate studies in economics.

A few journal articles will be made available through the course website as additional references. Most of these articles (particularly those from the Journal of Economic Perspectives) are accessible introductions to a topic. None of them are “strictly required” in the sense that you will not be tested on any of them, but they provide useful context to the lectures. What you are ultimately responsible for is to understand the findings from these articles that are discussed in lectures or recitations.

AI Guidance

This course allows and, in fact, explicitly encourages the use of AI (such as ChatGPT) as a tool to supplement your learning. Specifically:

1. Lecture notes: You are strongly encouraged to use AI as a way of engaging with the lecture notes, for example to provide aid in understanding steps you do not follow, or to explore further related questions.
2. Problem sets: You may use AI tools to check your work or provide suggestions for how to tackle a problem. You should chiefly view the problem sets as exercise to prepare you for the exams, and calibrate the use of AI accordingly.
3. Final exams: The use of AI tools during the in-class exams is not permitted. 
4. Paper requirement: You may use AI as a modern supportive tool, helping you brainstorm ideas, writing code, and assessing the strength of your argument. The core thesis needs to be your own, and you should view AI only as a tool to develop and refine your arguments. This policy is in place as it is a clearly stated goal of all Communications Intensive subjects (such as this one) to help you develop the ability to create effective communications. 

Any use of AI for problem sets or the paper requirement must be appropriately acknowledged and cited. It is each student’s responsibility to assess the validity of any AI output that is submitted; you bear the final responsibility. Violations of this policy will be considered academic misconduct.