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Lecture Information and Reading List This is an advanced course and the main reading is provided by articles; some of the topics are not covered well in text-books. You should not expect to read everything listed for each topic and you should not expect to understand the mathematical exposition in many of the articles, but you should focus on understanding and being able to explain the main points. * indicates particularly important reading and ** indicates articles that have had a major influence on economic thought Mankiw and Taylor Macroeconomics: European Edition. 2014 Edition nevertheless provides helpful background. The 2007 edition can be used. Note that chapter 11 in the second edition is chapter 10 in the first edition. Romp Game Theory is useful particularly for lecture 3

1. Revision: the IS-MP-PC model (KK) Gordon, R.J. (2011). “The History of the Phillips Curve- Consensus and Bifurcation”. Economica, Pp 10-50 Layard, R. S, Nickell and R. Jackmann. (2005). Unemployment: Macroeconomic Performance and the Labour Market. Especially chapter 9 Phelps, E, (1967). Phillips Curves, Expectations of Inflation and Optimal Unemployment over Time. Economica. Pp. 254-281. **Phillips, A.W. “The Relation between Unemployment and the Rate of Change of Money Wage Rates in the United Kingdom, 1861-1957” Economica November 1958 Sleeman, A.G. (2011). "Retrospectives: The Phillips Curve: A Rushed Job?" Journal of Economic Perspectives, 25(1): 223-38. Atkeson, A. and L.E. Ohanian. (2001). “Are Phillips Curves useful for Forecasting Inflation”. Federal Reserve Bank of Minneapolis Quarterly Review. Vol 25. No 1. Pp 211. **Friedman, Milton (1968). "The role of monetary policy". American Economic Review. 68 (1): 1–17. JSTOR 1831652 *Blanchard, O. (2018). “Should we reject the Natural Rate Hypothesis”. Journal of Economic Perspectives. Vol 32 no 1 . pp 97-120

2. The Open Economy and the Exchange Rate (MW) *Mankiw and Taylor. Chapter 13 https://policonomics.com/is-lm-bp/ gives a general account of the IS-LM-BP model of the open economy. *Boughton, J.M. (2003). “On the Origins of the Fleming-Mundell Model”. IMF Staff Papers. Vol 50. No 1. Frenkel, J.A. and A. Razin. (1987). “The Mundell-Fleming Model a Quarter Century Later: a Unified Exposition”. IMF Staff Papers. Vol. 34. pp 567-620. *Rogof (2001) Dornbusch’s Overshooting Model after Twenty-five Years

3. Rules, Discretion and Monetary Independence and the Auto-pilot of the Euro Area (MW) On Sticky Prices *Mankiw and Taylor. Macroeconomics 2nd European Edition. Chapter 14 section 14-1. Calvo, G.A. (1983). Staggered Prices in a Utility-maximising Framework. Journal of Monetary Economics. Vol 12 .. 393-393. On Monetary Independence **Barro, R and R.J. Gordon. (1983). “Rules, Discretion and Reputation in a Model of Monetary Policy”. Journal of Monetary Economics. Vol 12. pp 101-121. Crowe, C. and E.F. Meade. (2007). “The Evolution of Central Bank Independence around the World”. Journal of Economic Perspectives. Vol 21. No 4. Pp. 69-90. Cukierman, A. (1992). Central Bank Strategy, Credibility and Independence. MIT Press. **Kydland, F. and E. Prescott. (1977). “Rules rather than Discretion: the Inconsistency of Optimal Plans”. Journal of Political Economy. Vol 85. pp 473-492. A classic but rather abstract and not as easy to follow as Barro and Gordon. Taylor, J. (1983). Comment on Barro and Gordon. Journal of Monetary Economics, Vol. 12. pp. 123-125. On the euro area Eichengreen, B. and P. Temin (2010). “Fetters of Gold and Paper”. Berkley. Lane, P. (2012). “The European Sovereign Debt Crisis”. Journal of Economic Perspectives. Vol 26. No 3. Pp 49-68. Mankiw and Taylor Chapter 17 Mundell, R. (1961). “A Theory of Optimum Currency Areas”. One Money One Market. European Commission, 1990 Romp Chapter 6 *Tirole, J. (2017). Economics for the Common Good. Princeton University Press. Chapter 10. This gives a good non-technical account of the euro area crisis. Interview with Mario Draghi. Financial Times 30th September 2019 https://www.ft.com/content/b59a4a04-9b26-11e9-9c06-a4640c9feebb 4. Taylor principle, the zero lower bound and the liquidity trap (KK) Richard Clarida, Jordi Gali and Mark Gertler (2000): Monetary Policy Rules and Macroeconomic Stability: Evidence and Some Theory Ben Bernanke (2003): Some Thoughts on Monetary Policy in Japan **John Taylor (1993): Discretion Versus Policy Rules in Practice Paul Krugman (2012): Earth to Ben Bernanke. Chairman Bernanke Should Listen to Professor Bernanke

5. Rational Expectations and Household Consumption (KK) Robert Hall (1978). Stochastic Implications of the Life Cycle-Permanent Income Hypothesis: Theory and Evidence. **Robert Lucas (1976). Econometric Policy Evaluation: A Critique. **Barro (1974), “Are Government Bonds Net Wealth?” Journal of Political Economy 82(6): 1095-1117. John Campbell and Gregory Mankiw (1990). Permanent Income, Current Income, and Consumption Jonathan Parker, Nicholas Souleles, David Johnson and Robert McClelland (2011).Consumer Spending and the Economic Stimulus Payments of 2008. Jonathan Parker (1999). The Reaction of Household Consumption to Predictable Changes in Social Security Taxes. *Chang-Tai Hsieh (2003). Do Consumers React to Anticipated Income Changes? Evidence from the Alaska Permanent Fund

6. Fiscal Policy (MW) **Barro (1974) , “Are Government Bonds Net Wealth?” Journal of Political Economy 82(6): 1095-1117. Blanchard (1985) “Debt, Deficits and Finite Horizons”. Journal of Political Economy. Vol 93. Pp 223-247. Braun, Boneva and Waki (2016), What are the Effects of Fiscal Policy at the Zero Lower Bound. Bank Underground. Christiano, Eichenbaum and Rebello (2011) . “When is the Government Spending Multiplier Large?”. Journal of Political Economy. Vol 119. Pp 78-121. *Cloyne, J. (2013). “Discretionary Tax Changes and the Macroeconomy: New Narrative Evidence from the United Kingdom”. American Economic Review. Vol 103. Pp. 1507-1528. Parker (2011). On Measuring the Effects of Fiscal Policy in Recessions. Journal of Economic Literature. Vol 49. Pp 703-718. **Ricardo (1820) . Essay on the Funding System. Chapter 16 Mankiw and Taylor Blanchard (2019) Public Debt and Low interest Rates American Economic Review. 7. The Declining Real Rate of Interest and Secular Stagnation (MW) *Borio, C.E, P. Disyatat, M. Juselius and P. Rungcharoenkitkul (2017). Why so Low for so Long? A Long-term View of Real Interest Rates. BIS Working Paper 685. Diamond, P. (1965). “National Debt in a Neoclassical Growth Model”. American Economic Review. Vol 55. pp 1126-1150 (especially sections 1-7 and section 10). You are likely to find this difficult but it lies behind the material covered up to slide 18. Eichengreen, B. (2015). “Secular Stagnation: the Long View”. NBER Working Paper 20836 *Rachel L. and L. Summers (2019). “On Secular Stagnation in the Industrialised World”. NBER Working Paper 26198. See especially sections 1-4 and the conclusion. Summers , L. (2016). “The Age of Secular Stagnation” Foreign Affairs. March/April 2016. The paper by Blanchard in the fiscal policy lecture is also relevant

8 The Financial Accelerator and Macroprudential Regulation (MW) *Tucker, P. (2013). “Macroprudential Policy at the Bank of England” Bank of England Quarterly Bulletin. Q3. Pp192-201. Shakir, T. (2014). “The Interaction of the FPC and MPC”. Bank of England Quarterly Bulletin. Pp 396-408 Bank of England (2011). Instruments of Macroeconomic Policy Hanson, S.G, A.K. Kashyap and J.C. Stein. (2011). “A Macroprudential Approach to Financial Regulation”. Journal of Economic Perspectives. Vol. 25. No. 1. Pp3-28 Galati, G. and R. Moessner. (2011). Macroprudential Regulation. A Review of the Literature. BIS Working Paper No 337 *Bernanke, B. , M. Gertler and S. Gilchrist. (1996). “The Financial Accelerator and the Flight to Quality.” Review of Economics and Statistics. Vol LXXVIII. Pp 1-14. Financial Stability Review. November 2016

9 Quantitative Easing and Interest Rate Policy (MW) Joyce, M. M. Tong and R. Woods (2011) The United Kingdom’s Quantitative Easing Policy. Bank of England Quarterly Bulletin. Q3. pp 200-2011 *Weale, M and Wieladek, T. (2016). What are the macroeconomic efects of asset purchases. Journal of Monetary Economics. Vol 79. pp 81-93 Weale, M. (2016). “Unconventional Monetary Policy”. Bank of England Speech Martin, C. and C. Milas (2012) ‘Quantitative Easing: A Sceptical Survey’, Oxford Review of Economic Policy 28(4): 750–764. *Inflation Report November 2019 MPC Minutes November 2019 Carney, M. (2017). “Lambda”. LSE 16th January 2017

10 Growth Accounting and the Productivity Puzzle (KK) Fernald, J. , R. Hall, J. Stock and M. Watson (2017). The Disappointing Recovery after 2009. Brookings Papers on Economic Activity I. Pp1-81. Also read comments at the end of the paper. Caballero, R, T. Hoshi and A. Kayshap. (2008). Zombie Lending and Depressed Restructuring in Japan. American Economic Review.Vol 98. pp 1943-1977 Tenreyro, S. (2018). “The Fall in Productivity Growth: Causes and Implications”. Peston Lecture Goodridge, P., J. Haskel and G. Wallis. (2018). “Accounting for the UK Producitivity Puzzle: a Decomposition and Predictions”. Economica, Vol. 85. pp. 581-605. Solow, R. (1957). “Technical Change and the Aggregate Production Function”. Review of Economics and Statistics. Vol 39. pp. 312-320

McGowan, M.A., D. Andrews and V. Millot. (2017). “The Walking Dead. Zombie Firms and Productivity Performance in OECD Countries.” OECD Working Paper. No 1372. Haldane, A. (2017). “Productivity Puzzles”. Speech at London School of Economics. Syverson, C. (2017). “Challenges to Mismeasurement Explanations for the US Productivity Slowdown”. Journal of Economic Perspectives. Vol 31. pp 165-186 Gordon, R. (2012). “Is the US Economic Growth Over?”. NBER Working Paper No 18315 *Gordon, R. (2016). “Perspectives on the Rise and Fall of American Growth.” American Economic Review. Papers and proceedings Vol 106, pp. 72-76. Alwyn Young: A Tale of Two Cities: Factor Accumulation and Technical Change in Hong Kong and Singapore Bureau of Labor Statistics MFP Trends up to 2013...