Welcome to Econ 204A! Posted here are course information, reading list, and various supplemental materials. Changes will be posted throughout the quarter. Please check before class.

Annoucements:

11/30: Exam-week office hour is moved to Tu. Dec.6, 4:45-5:45pm. (This is to avoid conflict with your other exam and allow for a little break thereafter.)

11/23: Here is an old final exam.

11/16: Please note the following glitches in problem set:
Practice problem 4.1: Gross output was meant to be Cobb-Douglas. So with 100% depreciation, output net of depreciation (Y) should be defined as Y=K^alpha*L^(1-alpha)-K. Looks like I stumbled over my own notation :-(
Practice problem 4.3: Utility should be over 2nd period consumption should be 2t+1 not 2t.
Practice problem 4.6: Same glitch as in 4.1. Also, the problem uses symbol N for population: you may use L instead, as in the notes.

11/07: I have updated the slides for the OG model (slides 4a-4c). I hope the improvements compensate for the inevitable first-time typos. Please alery me if you suspect an error.

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Contact information:
E-mail: bohn@econ.ucsb.edu. Best use "Econ 204A" in the subject line.

Office: NH 3016. I am trying to be available to graduate students at all times. When the door is closed, don't hesitate to knock. Normal official office hours are Mondays and Wednesdays 2-3. See below for schedule changes.

Midterm: in class, Tuesday, October 25.
The final exam is scheduled by the registrar . 
Class grade is based on midterm, final, and problem sets.

Problem Sets:
Problem sets are normally due at the start of class. Assignments & due dates are subject to change: Please listen to class announcements and check this page.

Problem Sets are in part from the book, and in part from the Collection of Practice Problems:
    (1)    Due 9/29. Practice problems 1.1-1.2.            
    (2)    Due 10/6. Romer problems 1.3, 1.4, 1.6.
    (3)    Due 10/13. Practice problems, 2.1-2.3. (with 2.3 optional)
    (4)    Due 10/20. Romer problems 2.1, 2.2, 2.4. Practice problem 3.1. 
    (5)    Due 11/3. Romer problem 2.6. Practice problem 3.2.
    (6)    Due 11/10. Romer problems 2.9-2.10. Practice problems 3.4-3.5.
    (7)    Due 11/17. Practice problems 4.1-4.3.
    (8)    Due 12/1. Romer problem 2.17. Practice problems 4.5-4.8.

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Schedule Changes:

• Section Nov.4 is replaced by a class - we meet in NH 2111.

• Class time Dec.1 will be section.

• Office hours are MW 2-3pm, except the following:
    Mo 11/21 moved to Tu 11/22, 2-3pm.
    Wed 11/23 canceled (Thanksgiving).
• Added office hour: Tu 12/6, 4:45-5:45pm.

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Course Outline:

Some overheads/lecture notes will be provided later, to be updated.
Required readings are exam-relevant even if not covered in class. The class covers more than the required reading, often extracted from a variety of other sources that are listed as recommended, optional, or for-reference (in order of relevance). Items not required are only tested to the extent they are covered in class.
Location: (+) = Graduate office folder; RES = on reserve at the library

Part 1. Introduction


Classes #1-2: Review of undergraduate macroeconomics. 


• Introduction01 .
• Slides01 .
• Recommended: Williamson, Macroeconomics, ch. 4, 5, 8. (RES) [Good undergraduate text for background reading.]

Part 2. Exogenous Growth: The Solow Model

Classes #3-4: Main concepts.

• Introduction02 .
• Slides02a
• Required: Romer, Advanced Macroeconomics (4th edition), ch.1.1-1.5.
• Note on Linear Differential Equations .
  
• Recommended: Barro/Sala-i-Martin, Economic Growth, appendix A.1. (RES) [Good math reference.]
  
• Alternate reading: Barro/Sala-i-Martin, Economic Growth, ch.1.
  
• Alternate reading: Charles Jones, Introduction to Economic Growth, ch.1-3. (RES)
• Solow model - example worksheet.
  

Class #5: Applications.

• Slides02b .
• Required: Romer, Advanced Macroeconomics, ch.1.6-1.8.
  
• Optional: Bohn, Optimal Private Responses to Demographic Trends, pp. 47-79 in G20 conference volume 2006.

Class #6: New Growth.

• Slides02c .
• Recommended: Charles Jones, Introduction to Economic Growth, ch.4-5.
  
• Optional: Romer, Advanced Macroeconomics, ch.3.1-3.4.
• For reference: Paul Romer, Endogenous Technical Change, JPE 1990, S71-102.
• For reference: Charles Jones, R&D-Based Models of Economic Growth, JPE 1995, 759-784.

Part 3. Optimal Growth in Continuous Time

Class #7: Main concepts.

• Introduction03 .
• Slides03a .
  
• Required: Romer, Advanced Macroeconomics, ch.2.1-2.2.
• Optional: Barro/Sala-i-Martin, Economic Growth, ch.2. (RBR)

Classes #8-9: Optimal Control.

• Slides03b .
  
• Recommended: Barro/Sala-i-Martin, Economic Growth, appendix A.3.
  
• Recommended: Dixit, Optimization in Economic Theory, ch.10. (+)

MIDTERM, in class.
Midterm will likely cover Parts 1-3b.
Exams cover the topics discussed in class and in the required readings. That is, required readings are exam-relevant even if not covered in class. Other, not-required readings are not tested except as covered in class.

Classes #10-11: Dynamics of Optimal Growth

• Slides03c .
• Required: Romer, Advanced Macroeconomics, ch.2.3-2.6.
• Note on the log-linearized optimal growth model .
  

Classes #12-13: Dynamics of Optimal Growth and Applications to Fiscal Policy.

• Continue with Dynamics of Optimal Growth. Then:
  
• Slides03d (digression: discrete time).
  
• Slides03e (fiscal policy).
  
• Required: Romer, Advanced Macroeconomics, ch.2.7 and ch.11.1-11.2.

Class #14: Introduction to Money. The Sidrauski model. 

• Slides03f .
• Recommended: Miguel Sidrauski: Rational Choice and Patterns of Growth in a Monetary Economy, American Economic Review 57, 1967, 534-544.
• For reference: Ricardo Lagos and Randall Wright: A Unified Framework for Monetary Theory and Policy Analysis, Journal of Political Economy 113, June 2005, 463-484.

Part 4. Overlapping Generations

Class #15: Main concepts.

• Introduction04 .
• Slides04a
• Required: Romer, Advanced Macroeconomics, ch.2.8-2.12.
• Notes on the OG model .
  

Class #16-17: Applications to Fiscal Policy.

• Slides04b .
  
• Recommended: Diamond, Peter: National Debt in a Neoclassical Growth Model, AER 55, 1965, 1126-1150. [Skim Sec.2-4. Focus on Sec.5ff as supplement to the class.]
  
• For reference: Barro, Robert: Are Government Bonds Net Wealth? JPE 82, 1974, 1095-1117.

Class #18: Dynamic efficiency and Fiat Money

• Slides04c .
  
• For reference: Blanchard/Fischer, Lectures on Macroeconomics, ch.3 (excl. 3.3) and ch.5.2. (RBR) [Older book with more complete exposition than Romer]
• For reference: Abel, Mankiw, Summers, and Zeckhauser: Assessing Dynamic Efficiency: Theory and Evidence, Review of Economic Studies 56, 1989, 1-20.

Class #19: Exam Review.
 

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