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Advanced Macroeconomics for Undergraduates

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  • Chu, Angus C.

Abstract

This manuscript covers selected topics in advanced macroeconomics at the undergraduate level. It builds on materials in intermediate macroeconomics textbooks (e.g., Barro et al., 2017) by covering the mathematics of some basic dynamic general-equilibrium models, which are designed to give undergraduate students a firm appreciation of modern developments in macroeconomics. Chapter 1 begins with a simple static model to demonstrate the concept of general equilibrium. Then, Chapter 2 to 4 cover the neoclassical growth model to explore the effects of exogenous changes in the level of technology. Chapter 5 to 7 use the neoclassical growth model to explore the effects of fiscal policy instruments, such as government spending, labour income tax and capital income tax. Chapter 8 develops a simple new Keynesian model to analyze the effects of monetary policy. Chapter 9 begins the analysis of economic growth by reviewing the Solow growth model. Chapter 10 to 12 present the Ramsey model and introduce different market structures to the model to lay down the foundation of the Romer model. Chapter 13 incorporates an R&D sector into the Ramsey model with a monopolistically competitive market structure to develop the Romer model of endogenous technological change. Chapter 14 to 15 examine the implications of the Romer model. Chapter 16 concludes this manuscript by presenting the Schumpeterian growth model and examining its different implications from the Romer model.

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  • Chu, Angus C., 2020. "Advanced Macroeconomics for Undergraduates," MPRA Paper 98249, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:98249
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    References listed on IDEAS

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    1. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 70(1), pages 65-94.
    2. T. W. Swan, 1956. "ECONOMIC GROWTH and CAPITAL ACCUMULATION," The Economic Record, The Economic Society of Australia, vol. 32(2), pages 334-361, November.
    3. Gene M. Grossman & Elhanan Helpman, 1991. "Quality Ladders in the Theory of Growth," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(1), pages 43-61.
    4. Aghion, Philippe & Howitt, Peter, 1992. "A Model of Growth through Creative Destruction," Econometrica, Econometric Society, vol. 60(2), pages 323-351, March.
    5. Chu, Angus C., 2018. "From Solow to Romer: Teaching endogenous technological change in undergraduate economics," International Review of Economics Education, Elsevier, vol. 27(C), pages 10-15.
    6. Kydland, Finn E & Prescott, Edward C, 1982. "Time to Build and Aggregate Fluctuations," Econometrica, Econometric Society, vol. 50(6), pages 1345-1370, November.
    7. David Cass, 1965. "Optimum Growth in an Aggregative Model of Capital Accumulation," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 32(3), pages 233-240.
    8. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 71-102, October.
    9. Jones, Charles I, 1995. "R&D-Based Models of Economic Growth," Journal of Political Economy, University of Chicago Press, vol. 103(4), pages 759-784, August.
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    Cited by:

    1. Justice G. Djokoto & Paragon Pomeyie, 2021. "Level of Income and the Investment Development Path Theory: Evidence From Africa," SAGE Open, , vol. 11(4), pages 21582440211, November.

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    More about this item

    Keywords

    Advanced macroeconomics; dynamic general equilibrium; economic growth; technological change;
    All these keywords.

    JEL classification:

    • A2 - General Economics and Teaching - - Economic Education and Teaching of Economics
    • E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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