Before you come to the first week of macroeconomics...
The
perspective of modern macroeconomics is well outlined in -- well forecast by --
Robert Lucas's "Methods and Problems in Business Cycle Theory" which
you should read before starting the class. Link to Lucas
paper.
There are many
aspects of this paper that are interesting and provocative. But there are
several dimensions on which Lucas's essay provides a very clear statement of
views that are now commonly shared by macroeconomists.
First, many aspects
of macroeconomics require that we think about how some decision-maker (a household, a firm, a government) makes
choices over time.
Second,
macroeconomics is sometimes described as "the intersection of all fields."
In his essay, Lucas traces linkages between problems of interest and work in
wide variety of fields -- including monetary theory, labor economics, general
equilibrium analysis -- in describing intellectual trends and making forecasts
about future developments.
In arguing that
macroeconomics needs to produce "artificial economies" for positive
and normative purposes, Lucas also indicates that there is a substantial
empirical, quantitative and computational dimension to aggregate modeling. Our
lectures will contain a some emphasis on these topics, but the main focus will
be on ideas and methods.
Before coming to
this class, you are asked to work four "Day 0" study problems that
outline basic problems of choice over time, using the tools developed during
the mathematics review week. These study problems are PDF documents (pdfs will be our standard way of distributing course
materials). Please report any problems accessing or printing these documents to
me at the email address below. Link to study problems
The study problems
are background to our analysis of two major problems in dynamic macroeconomics,
the nature of optimal choice consumption choice over time and the nature of the
choice between consumption and work.
I look forward to
seeing all of you next week.
Robert
King
Department
of Economics, Boston University