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Before you come to SGZ for 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", PDF, which you are encouraged to read before starting the class. 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. For those studying macroeconomics for their own research purposes, there are an optional set of MACROLAB materials that can be accessed from the course webpage. 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 of the class. These study problems are PDF documents (pdfs will be our standard way of distributing course materials). Please report any problems accessing or printing these PDF documents to me at the email address below. 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 at Gerzensee. Robert King Department of Economics, Boston University |