Category: M.I.T.

Problem Set 6 (Solutions )

Problem Set 7 (Solutions )

Problem Set 8 (Solutions )

Exams

Final Exam (Solutions not found)

Spring 1996
Professor Ricardo Cabellero

Exams

Final Exam (Solutions) [neither questions nor solutions found]

Fall 1996

Problem Sets

Exams

Final Exam (Solutions) [neither questions nor solutions found]

Spring 1997
Professor Ricardo Caballero

Home page

Problem Sets

Exams

Final Exam (Solutions) [neither questions nor solutions found]

Fall 1997
Professor Paul Krugman

Problem Sets

Problem Set 1 (Solutions) [questions not found]

Problem Set 2 (Solutions) [questions not found]

Problem Set 3 (Solutions) [questions not found]

Problem Set 4 (Solutions) [questions not found]

Problem Set 5 (Solutions) [questions not found]

Problem Set 6 (Solutions) [questions not found]

Problem Set 7 (Solutions) [questions not found]

Problem Set 8 (Solutions) [questions not found]

Problem Set 9 (Solutions) [neither questions nor solutions found]

Exams

Final Exam (Solutions)

Spring 1998
Professor Ricardo Caballero

Problem Sets

Exam 2, Parts I and II with Solutions

Exams

Exam 1 with Solutions

Exam 2, Part III (Solutions)

Final Exam with Solutions

Fall 1998
Professor Paul Krugman

For this term we have a cornucopia of material that includes lecture slides and handouts along with syllabus, reading assignments, problem sets and examination questions with solutions. This material has been put together for an earlier post.

Spring 1999
Roger Brinner

Textbook: Olivier Blanchard, Macroeconomics

Syllabus and schedule

Problem Sets

Exams

Final Exam [neither questions nor solutions found]

Fall 1999
Professor Ricardo Caballero

Textbook: Olivier Blanchard, Macroeconomics

Lecture Slides

September 8 — Chapter 1: Tour of the World

September 13 — Chapter 2: Economic Data

September 15 — Chapter 2 and 3: Economic Data and the Goods Market

September 20 — Chapter 3 and 4: The Goods Market and Dynamics

September 22 — Chapter 5: The Financial Market

September 27 — Chapter 5: The Financial Market and the Role of Banks

September 29 — Chapter 6: The Role of Banks and the IS-LM Model

October 4 — Chapter 6: The IS-LM Model

October 6 — Chapter 6 : Review of the IS-LM Model

October 13 — Chapter 11: Openness in Goods and Financial Markets

October 18 — Chapters 11 and 12: Openness in Goods and Financial Markets

October 20 — Chapter 12: Openness in the Goods Market

October 25 — Chapters 12 and 13: Open Economy IS-LM

October 27 — Chapter 13: Open Economy IS-LM

November 1 — Chapters 13, 14.4 and 14.5: Fixed Exchange Rates and Crises

November 3 — Review: a collection of old transparencies, not posted

November 8 — Chapter 15: The Labor Market

November 10 — Chapters 15 and 16: Aggregate Supply and Demand

November 15 — Chapter 16: Aggregate Supply and Demand

November 17 — Chapter 16: Shifting the AS-AD

November 22 — Chapter 17: The Phillips Curve

November 24 — Chapters 18 and 19: Disinflation and Real Interest Rates

November 29 — Chapter 19: Inflation, Real Interest Rates and Exchange Rates

December 1 — Chapters 19, 22 and 23: AS-AD with Fixed Exchange Rates; Growth

December 6 — Chapters 22 and 23: Growth; Review I

Problem Sets

Exams

Exam 2 with solutions

Final Exam (Solutions)

Spring 2000
Professor Roger Brinner

Textbook: Olivier Blanchard, Macroeconomics(2^nded).

Problem Sets

Exams

Final Exam (Solutions not found)

Fall 2000
Professor Ricardo Caballero

Textbook: Olivier Blanchard, Macroeconomics

Problem Sets

Problem Set 8 (Solutions) (Graphs)

Exams

Exam 2, conflict (Solutions)

Exam 3 (Solutions)

Exam 3, conflict (Solutions)

Spring 2001
Professor Roger Brinner

Textbook: Olivier Blanchard, Macroeconomics(2^nd edition)

Problem Sets

Problem Set 2 (Solutions not found)

Problem Set 3 (Solutions not found)

Problem Set 6 (Solutions not found)

Exams

Quiz #1 Conflict (Solutions)

Quiz #2 (Solutions, htm; Solutions, pdf)

Final Exam: Book One (.doc); Book Two (.doc)

Fall 2001
Professor Ricardo Caballero

Textbook: Olivier Blanchard, Macroeconomics (2^nded)

Lecture slides

September 5 — Chapter 1: Tour of the World

September 10 — Chapter 2: Tour of the Book

September 12 — Chapter 3: The Goods Market

September 19 — Chapter 3: The Goods Market (continued)

September 24 — Chapter 4: Financial Markets

September 26 — Chapter 4: Financial Markets (continued)

October 1 — Chapter 5: The IS-LM Model

October 3 — Review Session

October 10 — Chapter 18: The Open Economy

October 15 — Chapter 19: The Goods Market in an Open Economy

October 17 — Chapter 20: Output, the Interest Rate and the Exchange Rate

October 22 — Chapter 20: Output, the Interest Rate and the Exchange Rate (continued)

October 24 — Chapter 21.2: Exchange Rate Crises

October 29 — Chapter 6.3-6.4: Building the Aggregate Supply: The Labor Market

October 31 — Chapter 6.5-7.1: Building the Aggregate Supply (continued)

November 5 — Chapter 7.1-7.3: Aggregate Demand and Aggregate Supply

November 7 — Review Session

November 14 — Chapter 7.4-7.7: AD-AS, Canonical Policy Shocks

November 19 — Chapter 8: The Phillips Curve

November 21 — Chapter 9: The Phillips Curve and the Natural Rate

November 26 — Chapter 14.1, 14.3-14.4: Nominal and Real Interest Rates
Chapter 21.1: Open Economy AS-AD

November 28 — Chapter 13.1-13.2: Productivity Growth in AD-AS. Chapter 10: Growth – The Facts

December 3 — Chapter 11.1-11.2: Growth – Saving, Capital Accumulation and Output

December 5 — Review

Problem Sets (best seven of nine for 25% of grade)

Problem Set 4 (Solutions) (Graphs)

Problem Set 5 (Solutions) (Graphs)

Problem Set 9 (Solutions) (Graphs)

Exams (note no final exam, three quizzes for 75% of grade)

Quiz 1 (Solutions)

Quiz 2 (Solutions)

Quiz 3 (Solutions)

Spring 2002
Professor Roger Brinner

Lectures

February 06: Course Objectives and Introductions

February 11: The Policy Tradeoff: Unemployment vs. Changes in Inflation

February 13: The Fiscal Policy

February 19: National Income Accounts and the Government Budget

February 20: Core Growth Theory

February 25;&27: Basic Econometric Tools Used in Macroeconomics

March 1: Basic Econometric Tools Used in Macroeconomics- Handout

March 06: IS-LM Introduction

March 08: Aggregate Supply and Demand

March 11: Review

March 13: Review

March 18: Consumer Spending & House Demand

March 20: Business Investment

April 01: Foreign Trade & Exchange Rates

April 03: Inflation

April 08: Money Demand

April 10: Review by Prof. Brinner

April 17: Growth

April 22: Integrating IS-LM and the Modern Phillips

April 24: Fiscal Policy in the 1990s

April 29: International Growth & Crises

May 01: Stock & Bond Markets

May 06: Monetary Policy in the 1990s

May 08: Social Security and the National Debt

May 13: US Business Cycles: Experience vs. Theory

May 15: Review

Problem Sets

Exams

Fall 2002
Professor Huntley Schaller

Readings

Recitations

Recitations by Samer HajYehia (PDF)
“Consumption and Housing” Recitation (PDF)
Class Notes Part 1 (PDF)
Class Notes Part 2 (PDF)

Problem Sets

Exams

Quiz #3 (Questions and Solutions)

Spring 2003
Professor Olivier Blanchard

Textbook: Olivier Blanchard’s Macroeconomics, 3rd ed.

Course Home Page

REQUIRED READINGS:

Deflation: How big is the Danger?, from the Economist.com, Apr 21^st, 2003
Fix or Float?, from the Economist.com, Jan 28^th, 1999
The bigger Threat still lurking, from the Economist.com, Apr 10^th, 2003
The Price of Profligacy, from the Economist.com, Jan 23^rd, 2003
Global Economy: Searching for Good News, from the Economist.com, Apr 9^th, 2003
America’s Economic Policy: Taxing Times, from the Economist.com, Mar 27^th, 2003

REVIEW ARTICLES:

Greenspan’s Gloom, from the Economist, Apr 30^th, 2003
Further to Fall?, from the Economist, Apr 28^th, 2003

ADDITIONAL READINGS:

Managing the World Economy, by Kenneth Rogoff, Aug 3^rd, 2002
America’s Economy: Their guess is as good as yours, from the Economist.com, Mar 18^th, 2003
War and Iraq: Don’t look back, from the Economist.com, Mar 14^th, 2003
A Fiscal Train Wreck, by Paul Krugman, the New York Times, Mar 11^th 2003
Irking the right, from the Economist.com, Mar 6^th 2003
War and Iraq: the Economic Risks, from the Economist, Feb 20^th, 2003
More Discipline Needed, from the Economist.com, Feb 13^th 2003
America’s Economy, from Economist.com, Feb 7^th 2003
Iraq: The Economic Consequences of War, by William Nordhaus
Is the Maestro a Hack?, by Paul Krugman, originally published in The New York Times, Feb 7 2003
Deficits as far as the eye can see, Feb 4th 2003, from Economist.com, Feb 4^th 2003
A temporary setback?, Jan 30th 2003, from Economist.com, Jan 30th 2003
The challenge of uncertainty, Jan 21st 2003, from Economist.com, Jan 21st 2003
Thinking about life after Greenspan, Dec 10th 2002, from Economist.com, Dec 10^th, 2002

Problem Sets

Exams

Lecture 2. Basic Definitions

Fall 2003
Professor Ricardo Cabllero

Textbook: Olivier Blanchard’s Macroeconomics.

Lectures

Lecture 1. Introduction

Lecture 3. Basic Aggregate Demand Model

Lecture 4. Goods/Financial Markets

Lecture 5. Financial Markets (Cont.)

Lecture 6. IS-LM

Lecture 7. IS-LM (Cont.)

Lecture 8 (review)

Lecture 9. Open Economy

Lecture 10. Goods Market in the Open Economy

Lecture 11. Goods Market and the Exchange Rate

Lecture 12. The Open Economy IS-LM (II)

Lecture 13. Exchange Rate Systems

Lecture 14. Building Aggregate Supply

Lecture 15. Aggregate Supply–Aggregate Demand

Lecture 16. Aggregate Supply, Aggregate Demand (cont.)

Lecture 17. AD-AS + The Phillips Curve

Lecture 18. Inflation and Unemployment

Lecture 19. Devaluations in an AD-AS framework (.ppt)

Lecture 20. Productivity growth (.ppt)

Lecture 21. Growth (.ppt)

Problem Sets

Exams

Quiz #1 (Questions and Solutions)

Quiz #2 (Questions and Solutions)

Quiz #3 (Questions and Solutions)

Spring 2004
Professor Olivier Blanchard

Textbook: Olivier Blanchard’s Macroeconomics, 3rd edition.

Readings

Week of 2/9:

Article 1: “Easy Money” (The Fed and inflation)

Article 2: “Competitive Sport in Boca Raton” (Questions about the strength of the dollar)

Week of 2/16:

Article 3: “Irrational Exuberance”

Article 4: Insanity in the Japanese stock market?

Article 5: The Unemployment Rate and Economic Health

Article 6: Soaring stocks in Southeast Asia

Article 7: Are the tech stocks back?

Week of 2/23:

Article 8: Macroeconomic performance in Germany

Week of 3/15:

Article 9: Unemployment rates in Spain and Portugal

Week of 4/5:

Article 10: Economic Recovery in the U.S.

Week of 4/19:

Article 11: Chinese economic outlook

Article 12: U.S. economic outlook

Article 13: Interest rates in the US

International Monetary Fund’s semi-annual report

Week of 5/3:

Reading (not required): Overview of Argentina

Problem Sets

Problem Set 3 (Solutions) [note: dated 3/17/03, but not same as problem 3 of Spring 2003]

Exams

Quiz #2 (Solutions) (Graphs)

Fall 2004
Professor Richard Caballero

Textbook: Olivier Blanchard’s Macroeconomics, 3rd edition.

All course materials as zip file

Lectures

Lecture 1. Introduction

Lecture 2. Definitions and First Model

Lecture 3. Basic Aggregate Demand Model

Lecture 4. Financial Markets

Lecture 5. IS-LM (1)

Lecture 6. IS-LM (2)

Lecture 7. Open Economy

Lecture 8. Goods Market and Exchange Rate

Lecture 9. Review

Lecture 10. Open Economy IS-LM

Lecture 11. Mundell-Fleming

Lecture 12. Aggregate Supply

Lecture 13. Aggregate Supply and Aggregate Demand

Lecture 14. AD-AS and the Phillips Curve

Lecture 15. Phillips Curve

Lecture 16. Review

Lecture 17. Real Interest Rates/Open economy AD-AS framework

Lecture 18. Growth

Lectures 19 and 20. Solow model (apparently available in zipped files above)

Lecture 21. Technological Progress and Unemployment

Lecture 22. Expected Present Discounted Values

Lecture 23. Bond Prices and Yields

Problem Sets

Exams

Spring 2005
Professor Olivier Blanchard

Textbook: Olivier Blanchard, Macroeconomics, 3rd edition.

Course Home Page

Lectures (only seven found)

Lecture 1 (Feb 2): Introduction and a Tour of the World (Ch 1)

Lecture 6 (Feb 22): The 2001 Recession

Lecture 20 (Apr 20): Open Economy (Ch 18)

Lecture 21 (Apr 25): Open Economy–The Goods Market (Ch 19)

Lecture 22 (Apr 27): Open Economy–The Goods Market (Ch 19)

Lecture 23/24 (May 2/4): Output, Interest Rate, and the Exchange Rate (Ch 20)

Lecture 25/26 (May 9/11): Exchange Rate Regimes (Ch 21)

Problem Sets

Exams

Quiz #1 (Questions and Solutions)

Quiz #3 (Questions and Solutions)

Fall 2005
Professor Francesco Giavazzi

Textbook: Olivier Blanchard. Macroeconomics, 4th ed.

Course Material Folder

Spring 2006
Olivier Blanchard

Textbook: Olivier Blanchard. Macroeconomics 4/E (2006)

Report of the President (B4)

Problem Sets with Solutions

Problem set 1

Problem set 2

Report of the President (B5)

Practice exercise for Chapter 20

Exams

1973_14453_exam_MPSoutputReduced

Image: Mr. Peabody (dog) and Sherman (boy) activating the original WABAC Machine.

Tags Blanchard, Brinner, Caballero, Giavazzi, Krugman, Schaller

M.I.T. Suggested Reading Syllabus

M.I.T. Theories of State and Economy. Piore and Berger, 1977

Post author By Irwin Collier
Post date 2018-12-20

Michael Piore, a labor economist, and Suzanne Berger, a political scientist (European and global political economy), team-taught the following graduate course in political economy at M.I.T. during the second term of 1976-77, its first-run. The course requirement was a short-fuse take-home examination. It was a fun reading list for a third-year graduate student of economics. It also just so happens that I have taught about a quarter of these readings in my undergraduate team-taught course on origins of political economy at Bard College Berlin this semester!

One salient memory from the course was Berger’s enthusiasm for the work of the (then) young scholar Roberto Unger. Another was the look on Piore’s face when he realized that in his haste he had labeled his upward sloping line in p-q space a “demand curve”. Quelle horreur!

One can find the Spring 2016 version of the course at the MIT Open Courseware site, along with archived versions for 2002, 2005, and 2010). Here that 2016 reading list. This is a course that is apparently still running, which is over a decade longer than Broadway’s Phantom of the Opera (thus far, that show is still running too).

_________________

Economics 14.781J, Michael Piore
Political Science 17.945J, Suzanne Berger

POLITICAL ECONOMY I: THEORIES OF THE STATE AND THE ECONOMY
[1976]

February 8: Introduction

February 15: Neo-classical theories of the economy

Readings:
Milton Friedman, Capitalism and Freedom
Robert Solow, “The New Industrial State, or Son of Affluence”, and Galbraith reply, in The Public Interest, no. 9, fall 1967.
Robin Marris “Galbraith, Solow and the Truth about Corporations” in The Public Interest, no. 11 spring 1968, pp. 37-46
Robert Solow “The Truth Further Redefined: A Comment on Marris” in Ibid. pp. 47-52.
Robert Solow “Blood and Thunder” in Yale Law Review, pp. 1696-1711.
[K.J. Arrow “Gifts and Exchanges”, Philosophy & Public Affairs, Summer 1972 No. 4]

February 22: Theories of the liberal state:

Readings:
Roberto Unger, Knowledge and Politics, chapters 1-3.

March 1: Theories of the liberal state:

Readings:
John Locke, Second Treatise on Government, chapters 1-5, 7-9.
Mancur Olson, The Logic of Collective Action, chapters 1,2,3,4.

March 8: Marxist theories of the economy

Readings:
Marx, “The Communist Manifesto” in Tucker, ed. Marx-Engels Reader, Part II.

March 15: Neo-marxist theories of the economy

Reading:
G.C. Harcourt, “Some Cambridge Controversies in the Theory of Capital,” The Journal of Economic Literature, vol. VII, 1969, pp. 369-405.

March 22: Marxist theories of the state:

Readings:
Marx, “Preface to A Contribution to the Critique of Political Economy” in Tucker, ed. Marx-Engels Reader
Marx, “The Eighteenth Brumaire of Louis Bonaparte,” in Tucker ed.

March 29: Vacation

April 5: Neo-marxist theories of the state:

Readings:
L. Althusser, “Ideology and Ideological State Apparatuses,” in Lenin and Philosophy
Thompson, Whigs and Hunters, “Introduction” (pp. 21-24) and “Consequences and Conclusions (219-269)

April 12: Neo-marxist theories of the state:

Readings:
Antonio Gramsci, “The Modern Prince”

Reading list for cases to be discussed April 19-May 10 will be distributed later.

Reading List
Part II

April 19: [Patriots Day – No Class] Crises and Growth:

Reading:
Joseph Schumpeter, Capitalism, Socialism, and Democracy, Part II
W. W. Rostow, The Stage of Economic Growth, Chapters 1-5, 10

April 26: Crises and Growth:

Reading:
Paul Sweezy, The Theory of Capitalist Development, Part III
Recommended: Jurgen Habermas, Legitimation Crisis

May 3: Ethnicity and Regionalism:

Readings.
Michael Hechter, Internal Colonialism, Chapters 1, 2, 9, 10.
D. Moynihan and N. Glazer, Beyond the Melting Pot, [pp. 1-23, 292-310, and any two interior chapters.)

May 10: Welfare

Readings:
E. Ginzberg and R. Solow The Great Society, Introduction, Chapter 3, Conclusion (Chapter 11).
F. Piven and R. Cloward, Regulating the Poor

May 17: Exam due

Source: Irwin Collier, personal copy from course.

Image Sources: Suzanne Berger in MIT News, Feb. 8, 2006. Michael Piore from screen capture of his webpage at M.I.T. (Mar 13, 2012 Wayback Machine)

Tags BergerS, Piore

Exam Questions M.I.T. Suggested Reading Syllabus

M.I.T. Reading list and final exam for core graduate growth and capital theory. Solow, 1973

Post author By Irwin Collier
Post date 2018-12-09

Core macroeconomic theory was taught in a sequence of four half-semester courses at M.I.T. In this post we have material from the final course of the sequence (typically taken in the fall term of the second year of residency) that was dedicated to growth and capital theory and taught by Robert Solow in 1973.

The course syllabus and final examination for the third course in the sequence on Macroeconometric Models taught by Franco Modigliani were transcribed for the previous post.

Economics in the Rear-view Mirror thanks Juan C. A. Acosta who copied the course syllabus and final examination that are found in the Franco Modigliani Papers (Box T7) at the Duke University Economists’ Papers Project and has graciously shared them for transcription here.

___________

14.454
MACRO THEORY IV
Fall 1973 2nd half

Growth Theory

background, if necessary: Solow, GROWTH THEORY, Ch. 1,2
Burmeister and Dobell: MATHEMATICAL THEORIES OF ECONOMIC GROWTH, Ch. 1-4
and/or
Wan: ECONOMIC GROWTH, Ch. 1, 2, 4 (sec. 3)
Kahn: “Exercise in the Analysis of Growth,” OXFORD ECONOMIC PAPERS, New Series, Vol. 11, 1959, pp. 143-156 (reprinted in GROWTH ECONOMICS, ed. A. K. Sen, Penguin)
Wan: Ch. 4, sec. 4

Optimal Growth

background, if necessary: Solow, GROWTH THEORY, Ch. 5
Burmeister and Dobell: Ch. 11
and/or
Wan: Ch. 9, 10
Koopmans: “Objectives, Constraints and Outcomes in Optimal Growth Models” ECONOMETRICA, Vol. 35, 1967, pp. 1-15 (reprinted in Koopmans, SCIENTIFIC PAPERS, pp. 548-560)

Capital Theory

Malinvaud: LECTURES ON MICROECONOMIC THEORY, Ch. 10
Hirschleifer: INVESTMENT, INTEREST AND CAPITAL, Ch. 2, 3, 4, 6
Dougherty: “On the Rate of Return and the Rate of Profit” ECONOMIC JOURNAL, December 1972, pp. 1324-1349
Burmeister and Dobell: Ch. 8, 9
Weizsäcker: STEADY-STATE CAPITAL THEORY, pp. 1-22, 32-47, and passim

Source: Duke University. David M. Rubenstein Rare Book and Manuscript Library. Economists’ Papers Archive. Papers of Robert M. Solow, Box 68. Also in Franco Modigliani Papers, Box T7.

14.454 FINAL EXAM
19 Dec 1973
R. M. Solow

ANSWER TWO QUESTIONS, total time 1 ½ hours

Suppose an economy with effectively unlimited supply of labor in the sense that any amount of labor is available (from an agricultural pools, say) at an institutionally determined real wage . In other respects the economy is like the standard one-sector model.
1. Analyze the growth of such an economy if saving and investment are proportional to output. What might correspond to the “full employment, full utilization” assumption?
2. What if saving and investment are proportional to profits?
3. How does a once-for-all change in $\bar{w}$ affect the growth path, and the share of wages in total output?
Sketch an analysis of an optimal-capital-accumulation problem in which the criterion function values the capital stock (per worker) as well as consumption, for prestige or power reasons, say, so that instantaneous utility is written u(c,k). In particular, is it true, as we would expect, that such a society should save more than it would if it valued consumption only?
Criticize the “neoclassical” theory of growth and capital; but do not be vague – where you have a complaint you should be prepared to suggest a better way.

Source: Duke University. David M. Rubenstein Rare Book and Manuscript Library. Economists’ Papers Archive. Franco Modigliani Papers, Box T7.

Image Source: Robert Solow pictures at the MIT Museum Website.

Tags Solow

Exam Questions M.I.T. Suggested Reading Syllabus

M.I.T. Macroeconometric models. Reading list and final exam. Modigliani, 1973

Post author By Irwin Collier
Post date 2018-12-08
1 Comment on M.I.T. Macroeconometric models. Reading list and final exam. Modigliani, 1973

Core macroeconomic theory was taught in a sequence of four half-semester courses at M.I.T. In this post we encounter the third course of the sequence (typically taken in the fall term of the second year of residency) that was dedicated to Keynesian macroeconometric models and taught by Franco Modigliani in 1973.

In the same folder is a qualifying exam for 14.454, Macro IV which would be a waiver examination given before the term begins. There is no year indicated on this exam, but the content of the questions clearly matches that of the empirical macro course 14.453 offered in 1973. In the fall term of 1973, the quantitative macro and the dynamic macro switched their order which is probably the reason for the confusion about the course number at the start of the term.

___________

14.453 MACRO THEORY III
Fall 1973, 2nd Half

I – ECONOMETRIC MODELS

Tinbergen, J. Statistical Testing of Business Cycles, Theory II. Business Cycles in the U.S.A.
Klein, L. R. & A. S. Goldberger. An Econometric Model of the United States, 1955; Impact Multipliers & Dynamic Properties of the K-G Model, 1959.
Suits, D. B. “Forecasting and Analysis with an Econometric Model”, AER, March, 1962. Reprinted in Readings in Business Cycles.
Hymans, S. H. & H. T. Shapiro. The Michigan Quarterly Econometric Model of the U.S. Economy, 1973.
_____________, Revision as of June, 1973 – Mimeo
Green, G. R., M. Liebenberg, A. A. Hirsh. “Short and Long Term Simulations with the OBE Econometric Model” in Econometric Models of Cyclical Behavior, Studies in Income and Wealth, Vol. 36.
Fair, R. C. A Short Run Forecasting Model of the United States Economy, 1971.
Adams, G. F. & David M. Rowe, “Forecasts and Simulations from the Wharton Econometric Model”, Multilith.

ECONOMETRIC FORECASTING SYSTEM

1 – DR1 Quarterly Model
2 – Operations Overview

Fromm, G. & L. R. Klein. “A Comparison of Eleven Econometric Models of the United States”, AER, Papers and Proceedings, May, 1973, pp. 385-393.
Fair, R. C. “Forecasts from the Fair Model and Comparison of the Recent Forecasting Record of Seven Forecasters – July, 1973”. Princeton University – Multilith.
Tsurumi, H. “A Comparison of Econometric Macro Models in Three Countries”, AER, May 1973.
Moriguchi, C. “Forecasting and Simulation Analysis of the World Economy”, AER, May, 1973.

THE MPS MODEL

Equations in the MIT-Penn-SSRC Model of the United States, January, 1973.
Data Directory, January, 1973.
Ando & Modigliani, “Econometric Analysis of Stabilization Policy,” AER, May, 1969.
Ando, A. K. “Basic Structure of the MPS Model” –Multilith.
Modigliani, F. “The Channels of Monetary Policy in the FMP Econometric Model of the U. S.” – Multilith.

II – THE CONSUMPTION FUNCTION

Keynes, J. M. The General Theory of Employment, Interest & Money, Ch. 8 & 9.
Modigliani, F. Lecture Notes on Monetary Theory, Part IV, Section A&B, (especially A.4 to B.2)
Brady, D.S. & Friedman, R. D. “Savings and the Income Distribution”, Studies in Income and Wealth, Vol. X, pp. 247-265.
Duesenberry, J. S. Income, Saving and the Theory of Consumer Behavior.
Modigliani, F. “Fluctuations in the Saving Income Ratio: A Problem in Economic Forecasting”, in Studies in Income and Wealth, Vol. XI, National Bureau of Economic Research, 1949.
_____________, “The Life Cycle Hypothesis of Saving Twenty Years Later”, Multilith.
_____________ and Brumberg, F. “Utility Analysis and the Consumption Function: An Interpretation of Cross-Section Data”, in K. Kurihara, (ed.) Post-Keynesian Economics, New Brunswick, 1954.
_____________ and _____________, “Utility Analysis and Aggregate Consumption Functions: An Attempt at Integration”, unpublished.
Merton, R. C. “Optimum Consumption and Portfolio Rules in a Continuous-Time Model”, Journal of Economic Theory, December, 1971.
Dreze and Modigliani, “Consumption Decisions under Uncertainty”, Journal of Economic Theory 5, 1972.
Modigliani, F. “The Life Cycle Hypothesis of Saving, the Demand for Wealth and the Supply of Capital” Social Research, Summer 1966.
_____________, “The Life Cycle Hypothesis of Saving and Inter-country Differences in the Saving Ratio”, in Induction, Growth and Trade, Essays in Honor of Sir Roy Harrod, 1970.
Ando, A. and Modigliani, F. “The Life Cycle Hypothesis of Saving: Aggregate Implications and Tests,” American Economic Review, March, 1963.
Modigliani, F. “Monetary Policy and Consumption: Linkages via Interest Rate and Wealth Effects in the FMP Model”, in Consumer Spending and Monetary Policy: the Linkages, The Federal Reserve Bank of Boston, 1971; and Appendix by Ando and Modigliani, “Consumption and Consumer Expenditure”.
Kaldor, N. Essays in Value and Distribution, London, 1960.
Tobin, J. “Life Cycle Saving and Balanced Growth”, in Ten Economic Essays in the Tradition of Irving Fisher, 1967.
_____________ and Dolde, W. C. “Wealth, Liquidity and Consumption”, in Consumer Spending and Monetary Policy: the Linkages, The Federal Reserve Bank of Boston, 1971.
Mayer, T. Permanent Income, Wealth, and Consumption, 1972.

III – THE INVESTMENT FUNCTION

Keynes, J. M., General Theory, Chapters 11 and 12.
Jorgenson, D. W. “Econometric Studies of Investment Behavior”, Journal of Economic Literature, Dec. 1971.
_____________ and R. E. Hall, “Application of the Theory of Optimum Capital Allocation” in Tax Incentives and Capital Spending, (edited by Fromm).
Bischoff, C. W. “The Effects of Alternative Lag Distributions”, in Tax Incentives and Capital Spending, G. Fromm, ed., Brookings Institution, 1971.
Ando, Modigliani, Rasche & Turnovsky, “On the Role of Expectations of Price and Technological Change in an Investment Function”. Multilith.
Eisner, E., and M. I. Nadiri, “Investment Behavior and Neoclassical Theory.” Review of Economics and Statistics. Vol. 50, August 1968.
_____________, “Neoclassical Theory of Investment Behavior: A Comment.” Review of Economics and Statistics, Vol. 52, May 1970.
Bischoff, C. W., “Hypothesis Testing and the Demand for Capital Goods,” The Review of Economics and Statistics, August 1969.
_____________, “Business Investment in the 1970’s: A Comparison of Models”, Brookings Papers on Economic Activity, 1, 1971.
Nadiri, I. M. “An Alternative Model of Business Investment Spending”, Brookings Papers on Economic Activity, 3, 1972.
Kalchbrenner, J. H. “A Model of the Housing Sector”, Chapter 6, in Savings, Deposits, Mortgages and Housing, Studies for the Federal Reserve-MIT-Penn Economic Model, (eds. Gramlich and Jaffee), 1972.
Ando and Modigliani, “Consumption and Consumer Expenditure”, pages 9-17, (APPENDIX A), Multilith.

IV – FINANCIAL MARKETS

Tobin, J. “A General Equilibrium Approach to Monetary Theory”, JMCB, February, 1969.
Brainard, W. and J. Tobin. “Pitfalls in Financial Model Building”, AER, May, 1968.
Ando and Modigliani. “Some Reflections on Describing Structures of Financial Sectors”. Multilith.
Ando, A. K. “Some Comments on Brainard-Tobin Framework for Financial Analysis”. Multilith.
Modigliani, F., Rasche, R. and J. P. Cooper, “Central Bank Policy, the Money Supply, and the Short-Term Rate of Interest,” Journal of Money, Credit and Banking, 2, 1970.
Modigliani, F. and R. Shiller, “Inflation, Rational Expectations, and the Term Structure of Interest Rates,” Economica, February, 1973.
Jaffee, D. M., and F. Modigliani, “A Theory and Test of Credit Rationing”, American Economic Review, December, 1969.
_____________, Credit Rationing and the Commercial Loan Market, John Wiley and Sons, 1971.
Gramlich, & Jaffee, editors, Saving Deposits, Mortgages and Housing, Chapters 1 to 5, and 7.
Modigliani, F. “The Valuation of Corporate Stock”. Multilith.

V – WAGES, PRICES, EXPECTATIONS

Phillips, A. W. “The Relation between Unemployment and the Rate of Change of Money Wages in the U. K.” Economica, November 1958.
Lipsey, R. G. “The Relation between Unemployment and the Rate of Change of Money Wage Rate in the U. K.: A Further Analysis”, Economica, 1961.
Phelps et al. Macro Economic Foundations of Employment and Inflation Theory, See especially the two contributions of Holt.
The Econometrics of Price Determination Conference, Board of Governors of the Federal Reserve System and SSRCs.

De Menil and Enzler, “Prices and Wages in the FR-MIT-Penn Econometric Model”.
Tobin, “The Wage-Price Mechanism: Overview of the Conference”.
Hyman, “Prices and Price Behavior in Three U.S. Econometric Models”.
Nordhaus, “Recent Developments in Price Dynamics”.
Lucas, “Econometric Testing of Natural Rate Hypothesis”.

Modigliani and Tarantelli, “A Generalization of the Phillips Curve for a Developing Country”, Review of Economic Studies, April, 1973.
Eckstein and Brinner, “The Inflation Process in the United States”, Joint Economic Committee, Congress of the U.S., 92 Congress, 2^ndSession.
Modigliani, “New Developments on the Oligopoly Front”, Journal of Political Economy, Vol. 66, June 1958.
Lucas, R. “Some International Evidence on Output-Inflation Tradeoffs”, AER, June, 1973.
Sargent, T. J. “Rational Expectations, The Real Interest Rate and the ‘Natural’ Rate of Unemployment.” Multilith—forthcoming in Brookings Papers on Economic Activity, 2, 1973.
Gordon, R. J. “The Welfare Cost of Higher Unemployment”, Brookings Papers on Economic Activity, 1, 1973.
Turnovsky, S. J. “Empirical Evidence on the Formation of Price Expectations”, J.A.S.A., December 1970.
de Menil and Bhalla, “Direct Measurement of Popular Price Expectations”—Princeton University Econometric Research Program, Memorandum No. 149.
de Menil, G. “Rationality in Popular Price Expectations”. Multilith.

______________________

QUALIFYING EXAM FOR 14.454 (sic)
MACRO IV (sic)

Time Period: Less than two hours
Answer at least 2 questions

Tests carried out for a number of countries of the major alternative models purporting to explain aggregate consumption (Duesenberry-Modigliani, permanent income, life cycle, Kaldorian model) are typically found to fit the data quite well, and the difference in fit is generally not large.
1. give a brief description of each of the above models
2. what explanation, if any, can be advanced for the empirical finding that there are no substantial differences in the closeness of fit in the various models
3. does the fact that the alternative models fit roughly as well imply that it makes little difference which of these equations is incorporated in an econometric model
  1. rom the point of view of forecasting
  2. from the point of view of predicting the effect of alternative monetary and fiscal policies
Consider the coefficient estimates of the St. Louis “reduced form model”.
1. what are possible and likely sources of biases in these coefficients? (Be sure to explain what you mean by bias in this context.)
2. are these estimates consistent with the monetarist view of the working of the economy?
3. with the view embodied in the standard econometric models of the U.S.?
4. with the view embodied in the MPS model? (optional)
The “multiplier” played an important role in early Keynesian thinking.
1. review how this notion has developed since that time.
2. in the light of (i), describe the kind of simulations you would perform in order to evaluate the “multiplier effect of an increase in government expenditure” implied by one of the major contemporary econometric models of the U.S.
3. can an estimate of the above multiplier be inferred from the coefficients of the St. Louis “reduced form model”?

______________________

14.453 MACRO THEORY
FINAL EXAMINATION

Franco Modigliani
Wednesday, 12/19/73

1 ½ hours

Answer Question I and at least one other question

Enclosed is a forecast for the U.S. economy generated by the MPS Model in October 1973, before the so-called oil crisis. Assume an exogenous reduction in oil imports of 3 million barrels per day (representing somewhat over 15% of the consumption of oil implicit in the above forecast) beginning in the fourth quarter of ’73, and becoming fully effective from the first quarter of ’74.
1. analyze the likely effects of this event on the above projections of real and money GNP and its components, assuming no change in monetary and fiscal policy.
2. what changes in economic policy, if any, would you recommend, and why?
3. can the MPS model (or analogous macro-econometric models) be used without major modification, to simulate the effects of the reduction in oil supply? Explain.

(Note: the monetary policy assumed in the projection is a growth of the money supply at 6% in ’73.4, at 6.5% in the first half of ‘74, and 7% thereafter.)

The “multiplier” played an important role in early Keynesian thinking.
1. 1. review how this notion has developed since that time.
  2. in the light of (i.), describe the kind of simulations you would perform in order to evaluate the “multiplier effect of an increase in government expenditure” implied by one of the major contemporary econometric models of the U.S.
  3. can an estimate of the above multiplier be inferred from the coefficients of the St. Louis “reduced form model”?
Formulate your model of the short and long run determinants of the price level. Use your theory to evaluate the often expressed view that fiscal policy should be used to control real output and monetary policy to control prices.
Discuss the role of price expectations in macro-economic analysis, and review the present state of knowledge with respect to the modeling of price expectational variables in macro-econometric models.

Source: Duke University. David M. Rubenstein Rare Book and Manuscript Library. Economists’ Papers Archive. Franco Modigliani Papers, Box T7.

Image Source: Franco Modigliani picture from the MIT Museum Website.

Tags Modigliani

Funny Business M.I.T.

M.I.T. Economics faculty MAS*H theme skit. Robert Solow, 1977

Post author By Irwin Collier
Post date 2018-12-03

Dating an undated skit script or assigning skit characters to actual faculty members requires textual analysis skills not taught in economics graduate school. But puzzle solving is, so let’s see what we can do with the following skit written by Robert Solow.

Current events and transitory cohorts of graduate students are our main clues to work with.

The TV-series M*A*S*H began its run of many years in September 1972.
Andrew Abel, Jeff Frankel and Dick Startz, mentioned in the script, all entered the M.I.T. graduate economics program in September 1974, so the earliest they could have been mentioned would have been in the January 1975 show.
David Lilien belonged to the previous year’s cohort so he would have been around in 1975-1977.
I was in that cohort with Messrs. Abel, Frankel, and Startz, and I am honestly surprised that I do not remember this faculty skit at all. However I do remember well that the faculty, as well as our cohort, wrote and performed independent Wizard of Oz skits in 1976. So it appears that either 1975 or 1977 were likely years for the following skit.
Rudiger Dornbusch taught at the University of Chicago Graduate School of Business 1974-75 before coming to M.I.T. in 1975.

Solow’s authorship is firmly established in the prologue to the 1986 faculty skit, where it is written:

“…we were tempted to re-run some of the great Solow skits of the past. There was the 1974 Watergate Skit, in which Paul Colson Joskow testifies to Senator Sam Peltzman that he would run over his grandmother to get a t-statistic above two. There was the 1978 Star Wars skit [a coming attraction here at Economics in the Rear-View Mirror], in which Milton Vader and his minions capture the wookie Jerrybaca and hold him captive in the Chicago Money Workshop. And in the incredible 1973 [sic] MASH skit [below], Hawkeye Hall and Trapper Jerry Hausman find Radar Diamond and Hot Lips Friedlaender cavorting in the Chairman’s office…”

We can see how memory plays tricks even on professors, since there is really no way except in a perfect foresight world that in 1973 Robert Solow would have alluded to members of the cohort of 1974-75.

The Synopsis below was printed on an unattached page and while it clearly leads into the M*A*S*H skit, I somewhat doubt that it was actually recited in performance. The idea of a faculty skit of graduate students trying to write a skit seems undeveloped. Still this synopsis’ characterization of our cohort’s skits as “a series of separate episodes in which they make fun of the idiosyncrasies of the faculty” fits the data well. Thus if forced to choose a single date for the following skit, I would probably go with 1977.

_____________

Synopsis

It is Friday afternoon and the tenth year class still hasn’t thought of a good idea for a skit. A group including Able Andrew [Andrew Abel], Jacob Frankel [Jeffrey Frankel], “Skinny” Lilien [David Lilien], Dick Stops [Dick Startz]…, are meeting in desperation. Finally they decide that the best they can do is to have a series of separate episodes in which they make fun of the idiosyncrasies of the faculty.

Marty Weitzman (Jeff Harris can do this perfectly. He will write his part).
Jerry Hausman. Lecture to be given very fast. Stop after each point and grin.
Frank Fisher. Obvious.
Bob Hall. This character lectures with one toe on top of the other and his arms folded. Then he hops around the room in that position.
Rudi Dornbusch. This depends on being able to do the accent.

And so on. At the end, someone says this isn’t a very good idea after all and a second skit, based on “mash” is tried.

_____________

Announcer: We are about to tell you a heartwarming story that almost nobody knows. It is the story of a devoted, selfless, kind, hardworking people who are yet charming, humorous, sexy, brilliant and lighthearted even while they tend the youthful victims of a heartless bloody War, the famous WOE or War on Error, perhaps more accurately called the War on Other People’s Error or WOOPE. The warm, sympathetic, lovable heroes of this story are the Doctors of the Massachusetts Economics Students Hospital or M.E.S.H.

As the scene opens, we observe the crusty but kindly commanding officer of MESH, Col. Brown [E. Cary Brown], looking at latest casualty lists.

BROWN: (broad smile, laughing, etc.) Able Andrew [Andrew Abel], flunked; Dick Stops [Dick Startz], flunked; Ray Hartman [Raymond S. Hartman], Ray Hartman, flunked, flunked. This is awful, hohoho. Here’s one who lost his Fellowship. Here’s one who lost both his Fellowships. War is hell.

(PAD [Peter Diamond?] comes in and puts sheet of paper on desk)

BROWN: (shouts) Radar.

PAD: Yessir.

BROWN: Where is that new duty roster for next month?

PAD: Just gave it to you, sir.

BROWN: Hmmm, I see Major Samuelson is doing the history of surgical thought. How far does he go?

PAD: Up to Marx’s transplantation problem.

BROWN: I suppose someone’s assigned to each ward: yes, someone for G-1, and for G-2, G-3, M-2, M-3—say how come nobody’s assigned to M-1?

PAD: Demand for M-1 has dropped off a lot lately.

BROWN: Oh, yes, another outbreak of Goldfeld’s Syndrome. How well I remember the first case I ever saw, back at old Fort Sam Brookings in the old days. Why, boy, they had real cash balances in the Regular Army.

(Enter Hawkeye Hall [Robert Hall] and Trapper Jerry [Jerry Hausman].)

PAD: Hi Hawk, Hi Trapper. What’s up?

HH: Up, down, what difference does it make. It’s all a random walk anyway. I’ve got kids out there dying of underconsumption and all I can tell them is that their consumption is way below trend, but there’s no reason to expect it ever to get back to trend. Properly discounted, they’re already dead.

BROWN: Couldn’t you just amputate a bit of the life cycle—maybe they’re just suffering from Modigliani’s Disease—you know the symptoms, compulsive talking, recurrent forecasting errors, complete absence of bequests—why I remember back at old Fort Sam Brookings…

HH: Modigliani’s Disease? There’s no such thing. That stuff all went out with, with, with econometrics. Nowadays it’s all up down up down. Well, maybe a totally unexpected amputation might work. But only once. No, it’s hard telling those innocent soldiers that everything they were taught up until yesterday, even by me, is all wrong.

TJ: I think the smart ones realize that tomorrow it will appear that what we’re telling them today is wrong too. That’s rational expectations for you. Once you get on it’s hard to get off. I hear that over at the Illinois Economics Graduates Hospital or IEGH the surgeons have stopped doing econometric operations altogether. They’d rather let everybody die at the natural rate. One of our enlisted men, Olivier Lawrence [Olivier Blanchard?], is supposed to have suggested that at least time was an exogenous variable, so maybe you could do a few econometric operations. But Major Lucas [Robert Lucas], the executive surgeon at IECH, told him that only the deviations of time from trend can possibly matter and that’s…

PAD: Up down up down….

TJ: Thanks, Radar. According to Lucas’s method of surgery, all coefficients are either zero or one—dealer’s choice.

(Enter HotLips [Anne Friedlander] and Major Frank [Frank Fisher])

HL: Colonel, I’d like to have this crumb courtmartialed. He almost killed one of our students by disconnecting the MPS transfusion from the main computer. He said that if anyone ever put the peripheral equipment and the main-frame in the same market, he’d never be able to go near Yorktown Heights again. Hark! Do I hear a chopper?

PAD: No, Major HotLips it’s just one of the students with Modigliani’s disease.

HL: Radar, just stay in the supply room and out of the women’s shower.

HH and TJ: Up down up down.

HL: Colonel you’ve got to do something about these clods. And as for Frank here, when I think…what did I ever see in him?

F: Well, I’m a little hard not to see. But I’ll get even with you all. I got out of econometric surgery while there were still exogenous variables. Anti-anti-trust is where the money is now. You’ll regret your temper, HotLips. When these creeps are starving and broke, unemployed econometric surgeons, doing illegal surprise amputations for peanuts, I will be dancing in Yorktown Heights, testifying in the fifty-third year of the IBM case, on one side or the other. Colonel, if you can’t have some discipline in this MESH, I’m going to file a complaint with Judge Edelstein.

BROWN: I think I’ll apply for reassignment to old Fort Sam Brookings.

(Enter Corporal Klingenbusch, dressed in his usual.)

TJ: Gorgeous outfit you’ve got there Klingenbusch [Rudiger Dornbusch?].

K: Victory at last. I’ll be in old Fort Sam Brookings before you. It worked. At last I get to leave this nut house. I’ve been discharged. I’m going home to Japan.

HH: How did you work it Klingenbusch?

K: Easy. I didn’t satisfy the transvestality condition.

ANNOUNCER: And so we leave the dedicated Doctors of MESH. Perhaps you are wondering why none of the beloved students, for whom MESH lives and breathes, actually appeared in this story. The reason is simple and typical, not to say rationally expected. There was no space.

[Handwritten note at the end of the typed text:]

J. Harris (appears): My name is Jeff Harris. I am a chest-cutter by profession. This is the most ridiculous hospital I have ever seen. It makes the University of Pennsylvania look like heaven. I wouldn’t trust these people to do veterinary surgery although, in fact, I think some of them may be veterinarians, at best.

Source: Duke University. David M. Rubenstein Rare Book and Manuscript Library, Economists’ Papers Archive. Papers of Robert M. Solow, Box 83.

Image Source: Robert Solow in his office, MIT Museum Website.

Tags Abel, BrownEC, Diamond, Hall, Hartman, Hausman, Solow, Startz

M.I.T. Suggested Reading Syllabus

M.I.T. Open Economy Macroeconomics. Syllabus and bibliography. Dornbusch, 2000.

Post author By Irwin Collier
Post date 2018-11-25

A genuine regret from my graduate school education was that I had not taken a course with Rudiger Dornbusch. Ex post it became clear that I would have been personally better served not having taken economic history at M.I.T. (all told, I had four semesters of solid economic history courses as an undergraduate at Yale), but unfortunately nobody shared with me the tip to take a trip on this rising star of open economy macroeconomics who began teaching at M.I.T. in 1975.

Rudi Dornbusch inspired many a classmate of mine at M.I.T. and I am sure many an economist beyond. (c.v. at M.I.T.)

_______________

14. 582 — OPEN ECONOMY MACROECONOMICS

R. Dornbusch
Spring 2000

COURSE OUTLINE:

I. Some Monetary History

II. The Basic Open Economy Model

Gold Standard and the Classical Open Economy
The Dependent Economy Model

III. Nominal Rigidities and Policy.

Money, Wages, and Employment.
PPP and Real Exchange Rates
Pricing in the Open Economy

IV. Intertemporal Trade.

V. Finance, Exchange Rates, and Macro Implications

Capital Mobility, Exchange Rates, and Employment.
Portfolio Diversification and Risk Premia

VI. Policy Issues

Target Zones
Currency Boards
Stabilization and Exchange Rate Management
Global Capital Markets
Feldstein-Horioka and Capital Mobility
Balance of Payments Crises
Vulnerability, Crises, and Contagion
EMU and New International Financial Architecture

TEXTS AND SOURCES:

Required readings are denoted with two asterisks (**), recommended readings with one asterisk (*).

** Grossman, G. and K. Rogoff (eds.). Handbook of International Economics. Vol. III, North Holland, 1995.
** Obstfeld, M. and K. Rogoff. Foundations of International Macroeconomics, MIT Press, 1996
Obstfeld, M. and K. Rogoff. Foundations of International Macroeconomics Workbook, MIT Press, 1998.
* Dornbusch, R. Open Economy Macroeconomics, Basic Books, 1980.
* Dornbusch, R. Exchange Rates and Inflation, MIT Press, 1988.
** See also the IMF website (http://www.imf.org) or recent IMF research reports.

Several journals are available online through JSTOR, including The Journal of Money, Credit, and Banking, The Journal of Economic Perspectives, The Journal of Political Economy, The Quarterly Journal of Economics, and The American Economic Review. Please visit JSTOR’s main page if you experience difficulty connecting to any articles from these journals to determine whether you qualify to use their site.

I. Some Monetary History.

Bordo, M. and Capie. Monetary Regimes in Transition. Cambridge University Press, 1994.
Bordo, M. and A.Schwartz (eds.). A Retrospective on the Classical Gold Standard 1821- 1931. University of Chicago Press and NBER, 1984.
Cassel, G. Money and Foreign Exchange After 1914, Constable, 1922.
Eichengreen, B. (ed) The Gold Standard in Theory and History, Methenu, 1985, Chapter 1.
DeGrauwe, P. International Money Post War Trends and Theories. Clarendon Press 198x.
Friedman, M. Money Mischief. Harcourt Brace Hovanovich, 1992.
Kindleberger C. Manias, Panics and Crashes : A History of Financial Crises. Basic Books 1989.
Kindleberger C. A. Financial History of Western Europe. Allen & Unwin 1984.
Obstfeld, M. and A.M. Taylor. Global Capital Markets: Integration, Crises and Growth, unpublished manuscript.
Taussig, F. International Trade, Macmillan,1928. Parts II and III.
Yeager, L. International Monetary Relations, Harper & Row, 1966 Part II.

II. The Basic Open Economy Model.

Gold Standard and The Classical Open Economy

** Calvo, G. “Devaluation: Level versus Rates” Journal of International Economics, Vol ll, No. 2, Pages 165-172, May 1981.
* Dornbusch, R. and Mussa, M. “Consumption, Real Balances and the Hoarding Function”, International Economic Review, June 1975. Also in Exchange Rates and Inflation, Chapter 18.
** Dornbusch, R., S. Fischer and P. Samuelson.“Comparative Advantage, Trade and Payments in a Ricardian Model with a Continuum of Goods” American Economic Review Dec 1977. Also in Exchange Rates and Inflation, Chapter 14.
Dornbusch, R. Open Economy Macroeconomics. Chapter 7.

The Dependent Economy Model

Calvo, G. and Rodriguez, C. “A Model of Exchange Rate Determination Under Currency Substitution and Rational Expectations”, Journal of Political Economy, No. 3, 1977, pgs 617-625.
* Dornbusch, R. “Real and Monetary Aspects of the Effects of Exchange Rate Changes” in Exchange Rates and Inflation, MIT Press 1988, Chapter 3.
* Dornbusch, R. Open Economy Macroeconomics. Chapter 6.
** Mundell, R. A. Monetary Theory, chapt. 10.
Salter,W. “Internal and External Balance” Economic Record, 1960.
Swan, T. “Economic Control in a Dependent Economy” Economic Record, 1960.

III. Nominal Rigidities and Policy.

Money, Wages and Employment

Brock, P. “Investment, the Current Account and the Relative price of Nontraded Goods in a Small Open Economy.” Journal of International Economics, May 1988.
** Calvo, G. “Staggered Contracts and Exchange Rate Policy” in J.Frenkel (ed.) Exchange Rates and International Macroeconomics. University of Chicago Press and NBER, 1983.
** Dornbusch, R. Open Economy Macroeconomics, chapter 9.
* Dornbusch, R. “PPP Exchange Rate Rules and Macroeconomic Stability” In Exchange Rates and Inflation, Chapter 11.
Dornbusch, R. “Real Exchange Rates and Macroeconomics: A Selective Survey” Scandinavian Journal of Economics 91: (2), 1989.
Kouri, P. “Profitability and Growth in a Small Open Economy” in A. Lindbeck(ed.) Inflation and Employment in Open Economies, North Holland 1979.
* Krugman, P. and Taylor,L. “The Contractionary Effects of Devaluation”, Journal of International Economics, August 1978 pp. 445-456.
Lizondo, S. and P. Montiel. “Contractionary Devaluation in Developing Countries. An Analytical Survey.” International Monetary Fund Staff Papers, March 1989.
** Obstfeld, M. and Rogoff, K. “Sticky-Price Models of Output, the Exchange Rate, and the Current Account” In Foundations of International Macroeconomics, Ch.9.
Rodriguez, C. “A Stylized Model of the Devaluation-Inflation Spiral.” International Monetary Fund Staff Papers, March 1978.
Dornbusch, R. The Effectiveness of Exchange-Rate Changes, Oxford Review of Economic Policy, Vol. 12, No. 3. Pgs. 26-38.
** Dornbusch, R. “The Latin Triangle“

PPP and Real Exchange Rates.

Keynes, J.M. A Tract on Monetary Reform, MacMillan, 1923, chapt. 3.
Dornbusch, R. “Purchasing Power Parity” In Exchange Rates and Inflation,Chapter 5.
* Frankel, J. and A. Rose. “A Panel Project on Purchasing Power Parity: Mean Reversion Within and Between Countries”Journal of International Economics,40(1) 209-224, 1996.
Marston, R. “Real Exchange Rates and Productivity Growth in the United States and Japan” in S. Arndt and D. Richardson (eds.) Real-Financial Linkages Among Open Economies, Cambridge: MIT Press.
Obstfeld and Rogoff, K. “Perspectives on PPP and Long-Run Real Exchange Rates” chapter 32 in Grossman G. and K. Rogoff (eds.) Handbook of International Economics, Vol. III., North Holland, 1995.

Pricing in the Open Economy.

Dornbusch, R. “Exchange Rates and Prices” American Economic Review, March 1987. Also in Exchange Rates and Inflation, Chapter 5.
** Frankel, J. and A. Rose “Empirical Research on Nominal Exchange Rates.” chapter 33 in Grossman G. and K. Rogoff (eds.) Handbook of International Economics, Vol. III., North Holland, 1995.
* Goldberg P.K. and M. Knetter “Goods Prices and Exchange Rates: What have we learned?” Journal of Economics Literature, vol. XXXV, September 1997, pp.1243-1272.

IV. Intertemporal Models Of The Open Economy

Obstfeld, M. and Rogoff,K. Foundations of International Macroeconomics, parts 1-4.
* Obstfeld, M. and Rogoff, K. “The Intertemporal Approach to the Current Account” chapter 34 in Grossman G. and K. Rogoff (eds.) Handbook of International Economics, Vol. III., North Holland, 1995.
Fisher, E. O’N and K. Kasa. Generational Accounting in Open Economies in FRBSF Economic Review, 1997, Number 3.
* Dornbusch, R. “Real Interest Rates, Home Goods and Optimal External Borrowing, Journal of Political Economy, Feb 1983 (also in Exchange Rates and Inflation, Chapter 16.)
** Dornbusch, R. “Notes on Intertemporal Trade”.

V. Finance, Exchange Rates and Macro Implications

Capital Mobility, Exchange Rates, and Employment.

* Dornbusch, R. “Expectations and Exchange Rate Dynamics”, Journal of Political Economy, Dec. 1976 (also in Exchange Rates and Inflation, chapter 4)
Frankel, J. and K. Froot. “Using Survey Data to Test Propositions Regarding Exchange Rate Expectations.” American Economic Review Vol. 77, 1987, pp. 133-153.
Frenkel, J. and Mussa, M. “Asset Markets, Exchange Rates and the Balance of Payments” in R. Jones and P. Kenen (eds.) Handbook of International Economics, Vol.2, North-Holland 1985.
* Krugman,P. Exchange Rate Instability, MIT Press, 1988.
Taylor M. “The Economics of Exchange Rate”.Journal of Economic Literature, Vol.XXXIII, March 1995, pp.13-47.
Mundell, R. International Economics, chapts. 14 -18.
De Long, J. Bradford, Shleifer A. , Summers L. , Vishny R. “Noise Trader Risk in Financial Markets” Journal of Political Economy; V98 n.4 August 1990, pp. 703-38.
Frankel, Jeffrey A.; Galli, Giampaolo; Giovannini, Alberto, Editors. “The Microstructure of Foreign Exchange Markets”. National Bureau of Economic Research Conference Report Series. Chicago and London: University of Chicago Press, 1996.

Portfolio Diversification and Risk Premia.

* Dornbusch, R. “Exchange Rate Risk and the Macroeconomics of Exchange Rate Determination, in Exchange Rates and Inflation, Chapter 7.
Frankel, J. and Froot, K. “Forward Discount Bias: Is it an Exchange Risk Premium?”Quarterly Journal of Economics 104:1, 139-162.
** Froot, K. and R. Thaler. “Anomalies: Foreign Exchange”,Journal of Economics Perspectives, vol 4, No. 3, Summer 1990, Pages l79-l92.
Krugman, P. “Consumption Preferences, Asset Demands, and Distribution Effects in International Financial Markets.”NBER Working Paper No. 651, March 1981.
Mussa,M. “Official Intervention and Exchange Rate Dynamics” in J.Bhandari (ed.) Exchange Rate Management Under Uncertainty,MIT Press 1985.
Sachs, J. and Wyplosz, C. “Real Exchange Rate Effects of Fiscal Policy.” NBER Working PaperNo. 1256, Jan. 1984.
Neely, Christopher J. “Technical Analysis and the Profitability of U.S. Foreign Exchange Intervention”. Federal Reserve Bank of St. Louis, July/August 1998.
Solnik, Bruno. “Global Asset Management: Too Hedge or Not to Hedge–a Question That Cannot be Ignored”. The Journal of Portfolio Management, Summer 1998.
Stein, Jerome L. and G. Paladino. Recent Developments in International Finance: A Guide to Research Journal of Banking and Finance,21 (1998) 1685-1720.
Stulz, Rene M. “International Portfolio Choice and Asset Pricing: An Integrative Survey”, in R. Jarrow et al (eds)Handbooks in OR & MS, vol. 9, Elsevier Science B.V., 1995.

VI. Policy Issues

Target Zones

Bertola, G. “Continuos-Time Models of Exchange Rates and Intervention ” In F. van der Ploeg, ed.Handbook of International Macroeconomics, Blackwell, 1994.
Bertola, G. and Caballero, R.“Target Zones and Realignments”, American Economic Review, 1992.
** Krugman, P. and M. Miller. (eds.) Exchange Rate Targets and Currency Bands. Cambridge University Press, 1992.
** Svensson, L. “An Interpretation of Recent Research on Exchange Rate Target Zones.”Journal of Economics Perspectives, Vol 6, No. 4, pp. 119-144, Fall 1992.
Werner, A. “Exchange Rates and Target Zone Width”. Economic Letters. Dec 1992.

Exchange Rate Regimes and Currency Boards

Calvo, G. “On Dollarization”,1999 (www.bsos.umd.edu.econ.calvo.htm)
Dornbusch R. and F. Giavazzi,“Hard Currency and Sound Credit: A Financial Agenda for Central Europe” May 1998.
Eichengreen, B.“The Choice of Exchanage Rate Regime” (incomplete).
Eichengreen, B. Golden Fetters, Oxford University Press, 1992.
Friedman, M. “The Case for Flexible Exchange Rates” in his Essays in Positive Economics. U. of Chicago Press, 1953.
**Goldstein, M. Exchange Rate System and the IMF. Institute for International Economics, 1995
Hanke, S. and K. Schuler Currency Boards for Developing Countries. ICS Press, 1994.
List of References to Currency Boards by C. Broda.
Mihalke D. “Currency Board Arrangements: Issues and Experiences”.International Monetary Fund Occasional Paper No. 151, 1997.
Mundell, R. “A Theory of Optimum Currency Areas”, American Economic Review 51, September 1961.
Obstfeld, M. and K. Rogoff, “The Mirage of Fixed Exchange Rates” Journal of Economic Perspectives 9, Fall 1995
Perry G. E. “Currency Boards and External Shocks: How Much Pain, How Much Gain?”, World Bank Latin American and Caribbean Studies, February 1997.
Taussig, F. International Trade, Macmillan, 1928. Parts II and III.
Tornell, A. and A. Velasco, “Fixed vs. Flexible Exchange Rates: Which Provides More Fiscal Discipline?”NBER WP. No. 5108, 1995.
* Williamson, J. What Role for Currency Boards? Institute for International Economics, Washington D.C., Sep. 1995.
Ghosh, A., A. Gulde and H. Wolf. “Currency Boards: The Ultimate Fix?” IMF, wp. 98/8
** Williamson, J. The Crawling Band as an Exchange Rate Regime: Lessons from Chile, Colombia and Israel, Institute of International Economics, 1996.

Stabilization and Exchange Rate Management

Alesina, A. and A. Drazen. “Why are Stabilizations Delayed?” American Economic Review, December 1991.
Bruno, M. et. al. Lessons of Economic Stabilization and its Aftermath.MIT Press, 1991.
Calvo, G. “Incredible Reforms” in G.Calvo (ed.) Debt, Stabilization and Development. Oxford: Basil Blackwell, 1989.
Caballero, R. Structural Volatility In Modern Latin America, April, 2000
Calvo, G. and C. Vegh. “Credibility and the Dynamics of Stabilization Policy: A Basic Framework.” IMF, Staff Papers, November 1990.
* Dornbusch, R. “Credibility and Stabilization”, Quarterly Journal of Economics, August 1991, pp. 837-850. Also in R.Dornbusch Stabilization, Debt, and Reform, Prentice Hall 1993.
* “The New Classical Macroeconomics and Stabilization Policy.”American Economic Review, May 1990. Also in R. Dornbusch Stabilization, Debt, and Reform, Prentice Hall 1993.
Dornbusch, R., and S. Edwards, S (eds)The Macroeconomics of Populism in Latin America. University of Chicago Press, 1991.
Dornbusch, R. and Fischer, S. “Stopping Moderate Inflations.” World Bank Review, 1992.
Dornbusch, R., Goldfajn, I. and Valdes, R. “Currency Crisis and Collapses”, Brookings Papers, 2, 1995.
Drazen, A. and Helpman, E. “Stabilization With Exchange Rate Management” Quarterly Journal of Economics, 1987.
Fernandez, R. and D. Rodrik. “Resistance to Reform. Status Quo Bias in the Presence of Individual Specific Uncertainty” American Economic Review, December 1991.
Goldfajn I. and R. O. Valdes“The Aftermath of Appreciations”. NBER WP#5650, July 1996.
** Vegh, C. “Stopping High Inflation: An Analytical Overview,” International Monetary Fund, Staff Papers, September 1992.
* Williamson, J. “The Crawling Band as an Exchange Rate Regime: Lessons from Chile, Colombia and Israel”, Institute of International Economics,1996.

Feldstein-Horioka and Long Term Capital Mobility.

Cardoso, E. and R. Dornbusch. “Foreign Private Capital Flows” Handbook of Development Economics, Vol II, North Holland, 1989.
**Dooley, M., J. Frankel and D. Mathieson “International Capital Mobility: What do Saving-Investment Correlations Tell US?” International Monetary Fund, Staff Papers, September 1987.
** Feldstein, M. and Horioka, C. “Domestic Savings and International Capital Flows”. Economic Journal, June 1980, pages 314-329.
Frankel, J. “Measuring International Capital Mobility: A Review.”American Economic Review. Papers and Proceedings. May 1992.
Harberger, A.“Vignettes on the World Capital Market”, American Economic Review, May 1980.
** Ventura, J. & A. Kraay, “Current Accounts in Debtor and Creditor Countries”, March 1999. ECONOMETRICS SEMINAR (Joint Harvard/MIT)

Balance of Payments Crises.

Calvo, G. “Balance of Payments Crises in a Cash in Advance Economy”, Journal of Money, Credit and Banking,1987.
Dornbusch, R. “Collapsing Exchange Rate Regime”, Journal of Development Economics, Vol 27, No 1-2, Pgs 7l-83, October 1987.
Flood, R. and P.Garber, 1984, “Collapsing Exchange Rate Regimes: Some Linear Examples.” Journal of International Economics,1/2, 1-13.
Froot K and M. Obstfeld, “Exchange Rate Dynamics Under Stochastic Regime Shifts: A Unified Approach”, NBER WPNo. 2835, February 1989.
** Garber, P. and L. Svensson “The Operation and Collapse of Fixed Exchange Rate Regimes” chapter 36, section 3, in Grossman G. and K. Rogoff (eds.) Handbook of International Economics,Vol. III., North Holland, 1995.
** Krugman, P. “A Model of Balance of Payments Crises.”Journal of Money, Credit and Banking, 3, 1979 ,311-325.
** Salant,S. and D. Henderson, 1978,”Market Anticipations of Government Policies and the Price of Gold” Journal of Political Economy, 4, 627-648.

Crises and Contagion

Caballero, R. and Krishnamurthy, “Emerging Markets Crises: An Asset Market Perspective”, MIT mimeo, 1998.
Calvo, Guillermo A.”Capital FLows and Capital-Market Crises: The Simple Economics of Sudden Stops”, unpublished manuscript, U. of Maryland, 1998 (http://www.bsos.umd.edu/econ/ciecalvo.htm)
Calvo, Guillermo A. “Understanding the Russian Virus”, unpublished manuscript, U. of Maryland, 1998 (http://www.bsos.umd.edu/econ/calvo.htm)
Chang and Velasco, “Financial Crises in Emerging Markets: A Canonical Model” NBER WP No. 6469, 1997.
Diaz Alejandro, C. “Good-bye Financial Repression, Hello Financial Crisis” Journal of Development Economics, 19, 1985.
Dornbusch,R. “Asian Themes”, (http://web.mit.eud/rudi/www) Feb. 1998.
Dornbusch,R. “Brazil’s Incomplete Stabilization and Reform”, Brookings Papers on Economic Activity 1:1997, pp.367-404 (http://web.mit.eud/rudi/www.)
Eichengreen B., A. Rose, C. Wyplosz. “Contagious Currency Crises”. Scandinavian Journal of Economics,December 1996.
Goldfajn, I. and Valdes, “Capital Flows and the Twin Crisis: The Role of Liquidity” IMF WP 97/87.
IMF, World Economic Outlook, Fall 1998 (http://www.imf.org)
IMF, International Capital Markets, Fall 1998 (http://www.imf.org)
*Kaminsky G. and C.Reinhart, “On Crises, Contagion and Confusion.” Unpublished manuscript, George Washington University and U. of Maryland, 1998.
Kaminsky, G. “Leading Indicators of Currency Crises” Board of Governors of the Federal Reserve, mimeo. Board of Governors of the Federal Reserve, December, 1997.
Krugman P. “The Myth of Asia’s Miracle”. Foreign Affairs, November/December 1994.
Krugman P. “What happened to Asia?” January 1998 (http://web.mit.edu/krugman/www)
Obstfeld, M., “The Logic of Currency Crises”, Cahiers Economique and Monetaires, 43, 1995.
** Tobin, J. “A Proposal for International Monetary Reform” in his Essays in Economics, MIT Press, 1982, chapt. 20.

EMU and New International Financial Architecture

Dornbusch,R., C.Favero and F. Giavazzi “Challenges for the European Central Bank” Economic Policy, April 1998, pp. 15-64, CEPR (http://web.mit.edu/rudi/www).
Eichengreen, B. “Toward a New International Financial Architecture: A Practical Post-Asia Agende”, IIE Press, 1999.
Eichengreen, B.”European Monetary Unification: Theory, Practice, Analysis”, MIT Press, 1997.
Fischer, S. “Reforming the International Monetary System” David Finch lecture, November, 1998 (http://www.imf.org/external/np/speeches/1998/110998.HTM).
Fischer, S. “On the Need for an International Lender of Last Resort” New York, January 3, 1999.
McCaughley, “The Euro and the Dollar”, Princeton Essays in International Finance, 1997

Source: August 17, 2000 webpage capture by Internet Archive Wayback Machine.

Image Source: Rudiger Dornbusch from the website of the MIT Museum.

Tags Dornbusch

Courses Curator's Favorites Exam Questions Lecture Notes M.I.T. Problem Sets Suggested Reading Syllabus Uncategorized Undergraduate

M.I.T. Principles of Macroeconomics. Slides, problems sets, exams. Krugman, 1998

Post author By Irwin Collier
Post date 2018-11-12

One might think that putting together robust links to economics course materials found in the internet archive, Wayback Machine, would be relatively straightforward, and sometimes it is. But most of us are inconsistent with the use of folders and sometimes pages get updated by other people so that traditional archival persistence is generally required to find missing pieces to the historical puzzle. In any event, today’s post manages to pack links to course content for a principles of macroeconomics course taught at M.I.T. exactly two decades ago by Paul Krugman.

I remember that semester well, because immediately after Paul Krugman finished his teaching obligations at M.I.T. for that fall term, he came to Berlin to receive an honorary doctorate from Freie Universität Berlin. The audio recording to his lecture “The return of demand-side economics” can still be heard (beginning around minute 2:00) at a webpage maintained by the John-F.-Kennedy Institute for North American Studies of Freie Universität.

_________________

14.02 Principles of Macroeconomics
Fall 1998
Professor Paul Krugman

Course Syllabus

Text: Olivier Blanchard, Macroeconomics.

Schedule (with links to lecture slides and exams)

Note: the lecture slides may differ slightly from those presented in class.

September 14 — Chapter 2: Preliminary Concepts

Slides: Tracking the Macroeconomy: Five Key Aggregates

September 16 — Chapter 3 & 4: The Goods Market (lecture by Roberto Rigobón)

September 21 — Chapter 5: Financial Markets

Slides: Review. Multiplier Analysis

Handout by Adam B. Ashcroft on bond yields about here

September 23 — Chapter 5: More on Financial Markets

Slides: The Federal Reserve and the Money Supply

September 28 — Chapter 6: IS-LM

Slides: The IS-LM Model

September 30 — Chapter 7: Expectations

Slides: Expectations and Macroeconomics

October 5 — Chapter 8: Expectations, Consumption, and Investment

Slides: Consumer Behavior–Not that simple

October 7 — Banks and the Banking System

Slides: Banking and the Financial System

October 8
Exam 1

Exam #1 Questions
Solutions

October 13 — Chapter 9: Expectations and Financial Markets

Slides: (missing)

October 14 — Chapter 10: Expectations and Policy

Slides: Expectations and Macroeconomic Policy

October 19 — Chapter 11: Introduction to the Open Economy

Slides: The Open Economy

October 21 — Chapter 12: The Open Economy Goods Market

Slides: Macroeconomics in the Open Economy

October 26 — Chapter 13: Interest Rates and Exchange Rates

Slides: What Determines Exchange Rates

Handout on exchange rates about here.

October 28 — Chapter 13: Exchange Rate Regimes

Slides: Fixed Exchange Rates

November 2 — Chapter 14: Expectations, Crises, and General Mayheim

Slides: (missing)

November 4 — Chapter 15: The Labor Market

Slides: Why Study the Labor Market?

November 5
Exam 2

Exam #2 review
Exam #2 questions
Solutions

November 9 — Chapter 16: General Equilibrium

Slides: Putting It All Together–AS-AD

November 16 — Chapter 17: The Phillips Curve

Slides: From Aggregate Supply to the Phillips Curve

November 18 — Chapter 18: Disinflation

Slides: Long-run Unemployment-Inflation Dynamics [note: “?” for the greek letter pi, i.e. rate of inflation]

November 23 — Chapter 19 & 21: Seigniorage and Devaluation

Slides: Inflation, Interest Rates, and Hyperinflation

November 25 — Chapter 22 & 23: Long-run Growth

Slides: Economic Growth

November 30 — Chapter 24: Technical Progress

Slides: Savings, Investment, and Growth

Handout on growth about here.

December 2 — Chapter 20: Great Depression and European Unemployment

Slides: High Unemployment and Growth Slowdowns

December 7 — Zuckerman & Krugman Foreign Affairs articles (lecture by Roberto Rigobón)

[Paul Krugman, Debate: America the Boastful, and Mortimer B. Zuckerman, Debate: A Second American Century, Foreign Affairs (May/June 1998)]

December 9 — Course Review

Slide: Overview Graphic [Note: graphic cut-off on right hand side]

Final Examination (December, 2018)

Final Exam Review
Pablo Garcia’s Review
Final Exam Questions

Problem Sets

Set Number	Assigned	Due	Returned
1	9-11	9-18	9-21
2	9-18	9-25	9-28
3	9-25	10-2	10-5
4	10-9	10-16	10-19
5	10-16	10-23	10-26
6	10-23	10-30	11-2
7	11-6	11-13	11-16
8	11-13	11-20	11-23
9	11-20	12-4	12-7

Problem Set 1
Solutions

Problem Set 2
Solutions

Problem Set 3
Solutions (missing)

Optional Problem Set 1
Solutions

Problem Set 4
Solutions

Problem Set 5
Solutions

Problem Set 6
Solutions

Problem Set 7
Solutions

Optional Set 2
Solutions

Problem Set 8
Solutions

Problem Set 9
Solutions

Optional Set 3
Solutions

Image: Photograph taken in December 1998 at Cecilienhof, Potsdam (Germany). Irwin Collier and Paul Krugman.

Tags Krugman

M.I.T. Suggested Reading Syllabus

M.I.T. Undergraduate intermediate macroeconomics. Blanchard, 1984

Post author By Irwin Collier
Post date 2018-11-07

Since relatively few people can be expected to stumble upon an M.I.T. course syllabus of Olivier Blanchard in Evsey Domar’s papers, I figure it is part of the value-added of Economics in the Rear-view Mirror to provide a transcription of such hidden treasure. Earlier Blanchard’s graduate M.I.T. course syllabus for 1997 was posted.

__________________

Intermediate Macro Theory
14.06
O.J. Blanchard
Fall 1984

This course is a continuation and extension of 14.02. It is divided in two parts of approximately equal length The first builds on the aggregate demand and aggregate supply apparatus developed in 14.02. The second examines three topics of current interest.

There will be a midterm exam, covering the first part of the course, and counting for half of the course grade. Students will then have the option of taking a final exam or writing a course paper on one of the three topics covered in the second part of the course.

Background Readings

Dornbusch and Fischer, Macroeconomics, 3^rded. (D.F.)

Economic Report of the President, February 1984.

R.J. Gordon, “Postwar Macroeconomics: The Evolution of Events and Ideas”, Chap. 2, in the American Economy in Transition, Feldstein, ed.

As the course starts, you may want to review Chapters 1 to 5 in D.F.

Part I. Aggregate demand and aggregate supply

The ISLM in the closed economy

D.F. Chapters 6 to 9

F. Modigliani, “Monetary Policy and Consumption”, (in xerox packet at Graphic Arts). pp. 12-46.

L. Summers, “Taxation and Corporate Investment: A q-theory approach”, Brookings Papers (BPEA), 1981, 68-119.

J. Tobin, “Monetary Policies and the Economy: The Transmission Mechanism”, Southern Economic Journal, January 1978.

The ISLM in the open economy

D.F. Chapters 18, 19-1.

Economic Report of the President, 1984, chapter 2.

R. Dornbusch and S. Fischer, “The Open Economy, Implications for Monetary and Fiscal Policies”, mimeo, MIT 1984.

R. Dornbusch, Open Economy Macroeconomics, chap. 3 (optional)

Aggregate demand aggregate supply

D.F. Chapters 11, 12, 13, 14, 19-2.

R. Lucas, “Understanding Business Cycles”, in “Studies in the Business Cycle Theory”, 215-239.

J. Tobin, “How Dead is Keynes?”, Economic Inquiry, Oct. 1977.

J. Tobin, “The Wage-Price Mechanism”, in The Econometrics of Price Determination”, Eckstein ed., 1972, 5-15.

Part 2. Three topics

Real wages and unemployment in Europe

E. Malinvaud, “The Theory of Unemployment Reconsidered”, Wiley 1977.

R. Dornbusch et al., “Macroeconomic Prospects and Policies for the European Community”, CEPS Paper 1, 1983.

J. Sachs, “Wages, Profits and Macroeconomic Adjustment: A Comparative Study”, BPEA 1979-2, 269-332.

J. Sachs, “Real Wages and Unemployment in the OECD Countries”, BPEA 1983-1, 255-289.

The Volcker disinflation

W. Poole, “The Theory of Monetary Policy under Uncertainty”, in Readings, W.L Smith and R. L. Teigen, 1974, 360-369.

O. Eckstein, “Disinflation”, DRI Economic Studies 114, October 1983.

W. Buiter and M. Miller, “Changing the Rules: Economic Consequences of the Thatcher Regime; BPEA 1983, 305-365 (optional).

T. Sargent, “the Ends of Four Big Inflations”, on Reserve (optional).

B. Friedman, “Lessons from the 1979-82 Monetary Policy Experiment”, American Economic Review P&P, May 1984, 382-87.

M. Friedman, “Lessons from the 1979-82 Monetary Policy Experiment”, American Economic Review P&P, May 1984, 397-400 (Authors not related).

R. Gordon, “The Conduct of Domestic Monetary Policy”, on Reserve, pp. 1-33 only (optional)

U. S. fiscal deficits and the world economy

D.F. Chapter 15

“Setting National Priorities: The 1984 Budget”, J. Pechman ed., Chapters 2, 8.

M. Feldstein, “Budget Deficits, Economic Activity and Net Capital Formation”, Testimony to Congress, 1983.

R. Dornbusch, “The Overvalued Dollar”, mimeo, MIT 1984.

O. Blanchard and R. Dornbusch, “U.S. Deficits, Europe and the Dollar”, mimeo MIT 1983 (optional).

O. Blanchard and L. Summers, “High Real Interest Rates”, on Reserve (optional).

Source: Duke University. David M. Rubenstein Rare Book and Manuscript Library. Economists’ Papers Archive. Evsey D. Domar Papers, Box 15, Folder “Macroeconomics. Lecture Notes, Exams, Paper: ‘Stability Without Planning? The American Experience’”.

Image Source:Olivier Blanchard’s MIT homepage, captured June 2, 2001 by Wayback Machine.

Tags Blanchard

Exam Questions M.I.T. Problem Sets Syllabus Undergraduate

M.I.T. Principles of Microeconomics, course materials. 1994-2005

Post author By Irwin Collier
Post date 2018-11-02

Today’s post takes Economics in the Rear-view Mirror on a short journey to the very recent past. Instead of transcribing archival material and publications from the period 1870-1970, I thought I would see what trawling the 341 billion web pages in the internet archive, Wayback Machine, might yield us.

On Christmas eve of 1996 Wayback Machine first captured webpages for the principles of microeconomics course taught to undergraduates at M.I.T. (14.01). Below you will find links to the archived lecture plans, problem sets and questions/answers for midterm and final examinations that I have been able to find. Spoiler alert: there are gaps in this archival record, but still one finds plenty of useful items, now more conveniently ordered.

But first I share a few paragraphs from my paper “Syllabi and Examinations” that suggest the method in my madness.

_________________

On the virtual informational frontier in the history of economics

…historians of recent economics are facing information-engineering challenges of learning to harness the power from the enormous current of weblog postings, tweets, working papers, media transcripts and exploding data bases to study the processes of scientific innovation and diffusion. The pedagogy of walk-talk-and-chalk has almost become relegated to the stuff of legend, and successive waves of duplication technologies have been forced to yield to the “pdf-ing” of lecture notes, syllabi, spreadsheets, and problem sets. Video and audio recordings of lectures, panel discussions, and interviews also contribute to a genuine curse of dimensionality confronting historians of contemporary economics.

Now we can imagine a virtual divide in our informational past that marks a frontier between the methodological problems associated with the relative scarcity of written artifacts relevant for the study of the earlier evolution of the education and training of economists and the current problems of judiciously sampling from an ever expanding big data universe. But whether as historians we are working one side of this frontier or the other, it makes great sense to embed our specific empirical concerns within a common framework, assuming a great arc of continuity (nobody said smooth!) that connects 1918 with, say, 2018 with respect to the scope and methods of economics. Without a common framework, our respective narratives would resemble tunnel building from opposite sides of a mountain with the most likely result being two noncommunicating parallel tunnels in the end. Does anyone really think there is a parallel Harvard, Chicago, Columbia, Wisconsin, Michigan universe? Of course not, we really did get here from there.

Source: Irwin L. Collier. Syllabi and Examinations in History of Political Economy, Vol. 50, No. 3 (September 2018), pp. 587-595.

_________________

MIT 14.01
PRINCIPLES OF MICROCONOMICS

Spring 1994
Professor Jeffrey Harris

Final Exam and Alternate Final Exam (questions)

Fall 1994
Professor Franklin Fisher

Final Exam & Alternate Final Exam (questions)

Spring 1995
Professor Jeffrey Harris

Problem Sets with Solutions

Midterm Exam 2 (questions and answers)

Final and Conflict Final Exams (questions)

Fall 1995
Professor Franklin Fisher

Problem Sets with Solutions

Final and Alternate Final Exams (questions)

Spring 1996
Professor Jeffrey Harris

Problem Sets with Solutions

Midterm Exam 2 (questions and answers)

Final and Conflict Exam (questions)

Fall 1996
Professor Jeffrey Harris

Textbook: Earl L. Grinols, Microeconomics (Boston: Houghton-Mifflin, 1994). “The textbook differs from that assigned in recent past semesters.”

Additional Course Information

Problem sets and Solutions

Midterm 1 (with answers)

Midterm 2 (questions and answers)

Midterm 2, alternate (questions and answers)

Final and Conflict Exams (questions)

Spring 1997

No Wayback Machine captures found…yet!

Fall 1997
Professor Jeffrey Harris

Probable Textbook: Earl L. Grinols, Microeconomics (Boston: Houghton-Mifflin, 1994).

[For some reason all the links go back to Fall 1996]

Spring 1998

No Wayback Machine captures found…yet!

Fall 1998
Professor Jeffrey Harris

Textbook: Earl L. Grinols, Microeconomics (Boston: Houghton-Mifflin, 1994).

Spring 1999
Professor Jonathan Gruber

Textbook: Jeffrey M. Perloff, Microeconomics (Addison Wesley Longman, 1999).

Fall 1999
Professor Jeffrey Harris

Textbook: Jeffrey M. Perloff, Microeconomics (Addison Wesley Longman, 1999).

Spring 2000
Professor Jonathan Gruber

Textbook: Jeffrey M. Perloff, Microeconomics (Addison Wesley Longman, 1999).

Fall 2000
Professor Jonathan Gruber

Textbook: Perloff, Jeffrey M. Microeconomics. 1st Edition. Addison-Wesley.

Spring 2001
Professor Christopher Snyder

Textbook: Pindyck and Rubinfeld, Microeconomics, 5th ed.

Fall 2001
Professor Jeffrey Harris

Textbook: Pindyck & Rubinfeld, Microeconomics, 5th Edition (Prentice Hall, 2001).

Midterm 1 with answers

Spring 2002
Professor Paul Joskow

Textbook: Pindyck & Rubinfeld, Microeconomics, 5th Edition (Prentice Hall, 2001).

Fall 2002
Professor Jonathan Gruber

Textbook: Jeff Perloff, Microeconomics, 2nd Edition (Addison Wesley Longman, 2001).

Midterm 1 with answers

Spring 2003
Professor Paul Joskow

Textbook: Pindyck and Rubinfeld, Microeconomics, 5th Edition.

Fall 2003
Professor Jonathan Gruber

Textbook: Jeffrey M. Perloff, Microeconomics, 3rd Edition.

Midterm 1 (Solutions)

Midterm 2 (Solutions)

Spring 2004
Professor Paul Joskow

Textbook: Pindyck and Rubinfeld, Microeconomics, 5th Edition.

Fall 2004
Professor Jonathan Gruber

Textbook: Jeffrey M. Perloff , Microeconomics, 3rd Edition.

Course home page and syllabus

Midterm 1 (questions)

Spring 2005
Professor Jeffrey Harris

Textbook: Microeconomics, Robert S. Pindyck, Daniel L. Rubinfield, Prentice Hall, June 30, 2004 (6th edition).