Introducing Advanced Macroeconomics

Description

Bridging intermediate and advanced macroeconomics study, the authors use empirical examples to introduce students step-by-step to methods of formal macroeconomic analysis, helping them to develop a thorough understanding of fundamental models in growth theory and business cycle theory.

• Provides ideal coverage for intermediate students looking to develop a more advanced level of understanding of macroeconomics
• Focuses on how to use and analyze elementary models by steadily working through the mathematical derivations one step at a time, ensuring that students fully understand each progression
• Real-world policy and empirical data is brought into focus alongside model predictions, allowing students to scrutinize the models they use and the connected policy issues
• Each chapter is accompanied by a number of guided exercises to support and then stretch students' analytical skills
• Also available as an e-book with functionality, navigation features, and links that offer extra learning support

New to this edition

• New material on the long-run evolution of income shares and the capital-output ratio relating to the international debate on distribution and inequality
• Extended material on the empirical performance of the Solow growth model and on growth accounting
• An extended Solow growth model describing the interaction between the economy and the climate system as a basis for a discussion of climate policy
• Extensions of the AS-AD model of business cycles to allow a broader discussion of unconventional monetary policies such as quantitative easing and forward guidance
• Extended discussion of the effects of fiscal policy in times of economic crisis
• A new and more elegant exposition of optimal stabilization policy
• A broader and more systematic exposition of the theory of optimum currency areas
• An in-depth discussion of the European sovereign debt crisis of the early 2010s and of lessons learned from the international financial crisis and the euro crisis

About the Author(s)

Hans Jørgen Whitta-Jacobsen, Professor of Economics, University of Copenhagen, and Peter Birch Sørensen, Professor of Economics, University of Copenhagen

Peter Birch Sørensen is Professor of Economics at the University of Copenhagen. He is a former Assistant Governor and Chief Economist of the Danish central bank. He has also served as chairman of the Danish Economic Councils, the Danish Productivity Commission, and the Danish Council on Climate Change, and as a consultant for the OECD, the European Commission and the International Monetary Fund.

Hans Jørgen Whitta-Jacobsen is Professor of Economics at the University of Copenhagen and former Vice Dean at the university's Faculty of Social Sciences. He has served as chairman of the Danish Economic Councils, as consultant for the Danish government on tax reform and as member of the Danish Commission for Retirement, Attrition and Pensions.

Table of Contents

1:Macroeconomics for the long run and for the short run
BOOK ONE: THE LONG RUN: ECONOMIC GROWTH, LONG RUN UNEMPLOYMENT, AND STRUCTURAL ECONOMIC POLICY
2:Some facts about prosperity and growth
Part One: Work Horse Models for the Long Run
3:Capital accumulation and growth: the basic Solow model
4:Wealth accumulation and capital mobility: The Solow Model for a small open economy
Part Two: Exogenous Technological Progress
5:Technology and growth: the Solow model with technological progress and growth accounting
6:Education and growth: the Solow model with human capital
7:Limits to growth? Resource scarcity and climate change
Part Three: Endogenous Growth
8:Productive externalities and endogenous growth
9:R&D-based endogenous growth
Part Four: Structural Unemployment
10:Some facts and introductory theory about unemployment
11:Efficiency wages and unemployment
12:Trade unions and unemployment
BOOK TWO: THE SHORT RUN: ECONOMIC FLUCTUATIONS, SHORT RUN UNEMPLOYMENT, AND STABILIZATION POLICY
13:Business cycles: Facts
14:Business cycles: Costs
Part Five: The Building Blocks for Short-Run Macroeconomics
15:Investment and asset prices
16:Consumption, income, interest rates, and wealth
17:Monetary policy and aggregate demand
18:Inflation, unemployment, and aggregate supply
Part Six: Short-Run Macroeconomics for the Closed Economy
19:Explaining business cycles: aggregate supply and aggregate demand in action
20:Monetary and fiscal stabilization policy
21:Business cycles and stabilization policy with rational expectations
22:Limits to stabilization policy: credibility and uncertainty
Part Seven: Short-Run Macroeconomics for the Open Economy
23:Aggregate demand and aggregate supply in the open economy
24:The open economy with fixed exchange rates
25:The open economy with flexible exchange rates and the choice of exchange rate regime
26:The economics of monetary union and the European sovereign debt crisis

Reviews

"Engaging and precise: the best book in the market to teach serious macroeconomics to undergraduates." - Ricardo Nunes, Professor of Economics, University of Surrey

"Thorough and rigorous, providing a solid grounding in modern macroeconomics." - Jonathan Perraton, Senior Lecturer in Economics, University of Sheffield

"A unique combination of rigor and relevance, including informative and challenging exercises." - Klas Fregert, Associate Professor, Lund University

Additional Resources

This book is accompanied by online resources featuring datasets to support end-of-chapter exercises, instructions on how to perform Hodrick-Prescot filtering in Excel, and solutions to the in-chapter exercises for lecturers.