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14.02 | Spring 2014 | Undergraduate

# Principles of Macroeconomics

For the first seven lectures, the students used the professor’s lecture notes as their text. Please also see the additional readings below the table.

[Macro] = Blanchard, Olivier, and David R. Johnson. Macroeconomics. 6th ed. Pearson, 2012. ISBN: 9780133061635.

L = Lecture session

R = Recitation session

SES # | TOPICS | READINGS | KEY DATES
--- | --- | --- | ---
L1 | Models of the financial crisis: Leverage | No readings |
R1 | Balance sheets and leverage | No readings |
L2 | Models of the financial crisis: Holmstrom-Tirole I | No readings |
L3 | Models of the financial crisis: Holmstrom-Tirole II | No readings |
R2 | Holmstrom-Tirole model | No readings | Pset 1 posted (leverage, Holstrom-Tirole, Diamond-Dybvig)
L4 | Models of the financial crisis: Diamond-Dybvig I | No readings |
L5 | Models of the financial crisis: Diamond-Dybvig II | No readings |
R3 | Diamond-Dybvig model | No readings | Pset 1 due
L6 | Models of the financial crisis: Tirole | No readings |
L7 | Models of the financial crisis: Kiyotaki-Moore | No readings |
R4 | Kiyotaki-Moore model | No readings | Pset 2 posted (Kiyotaki-Moore and IS-LM)
L8 | Core: National accounts | [Macro] Chapters 1 and 2. |
L9 | Core: The IS-LM model | [Macro] Chapters 3–5. |
R5 | IS-LM | No readings | Pset 2 due
L10 | Core: The IS-LM model (cont.) | [Macro] Chapters 3–5. |
L11 | Core: The IS-LM model (cont.) | [Macro] Liquidity trap section, pp. 473–6. |
| Quiz 1 on lectures 1–11 | No readings |
L12–13 | Core: The medium run | [Macro] Chapters 6–9. |
R6 | Medium run | No readings | Pset 3 posted (Medium run)
L14 | Core: The medium run (cont.) | [Macro] Chapters 6–9. |
L15 | Core: The open economy | [Macro] Chapters 18–21. |
R7 | Open economy | No readings | Pset 3 due
L16–17 | Core: The open economy (cont.) | [Macro] Chapters 18–21. |
| Quiz 2 on lectures 12–17 | No readings |
L18 | The Mundell-Fleming model | [Macro] Chapter 20. | Pset 4 posted (Open economy)
L19 | Fixed and flex exchange rates | [Macro] Chapter 21. |
R8 | Fiscal policy | [Macro] Chapter 21. |
L20 | Fiscal policy (cont.) | [Macro] Chapter 23. | Pset 4 due
R9 | Fiscal policy exercise | No readings | Pset 5 posted (Fiscal and monetary policy)
L21–22 | Monetary policy and the crisis | [Macro] Chapters 9 and 24. |
R10 | Monetary policy and the crisis exercises | No readings |
L23 | The state of the U.S. economy after the crisis—Bob Hall | No readings | Pset 5 due
L24 | Review for the quiz | No readings |
| Quiz 3 on lectures 18 to 24 | No readings |

### Additional Readings

Gapper, John. “Promises that Proved Ultimately Empty,” Financial Times, January 9, 2012.

“Playing with Fire,” The Economist, February 25, 2012.

“The Origins of the Financial Crisis: Crash Course,” The Economist, September 7, 2013.

“The Dangers of Debt: Lending Weight,” The Economist, September 14, 2013.

“Monetary Policy after the Crash: Controlling Interest,” The Economist, September 21, 2013.

“Stimulus v Austerity: Sovereign Doubts,” The Economist, September 28, 2013.

“Making Banks Safe: Calling to Accounts,” The Economist, October 5, 2013.

## Course Info

##### Instructor

- Prof. Francesco Giavazzi

##### Departments

- Economics

##### As Taught In

Spring 2014

##### Level

Undergraduate

##### Topics

- Social Science
  - Economics
    - Macroeconomics
    - Political Economy
    - Public Economics

##### Learning Resource Types

assignment_turned_in Problem Sets with Solutions
grading Exams with Solutions
notes Lecture Notes

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