Economics 8344 - Macroeconomic Theory III
Fall 2016



MIDTERM DATE: Monday October 17th.


FINAL: Nov 30th in class. 


Postponed classes: August 22 and 24.


Make-up classes: Tuesday October 4, 3.30-5.00pm



We start with the material in Obstfeld-Rogoff, chapter 6 and move on to


Holmstrom-Tirole QJE 1997 (a paper that underlies a ton of work in corporate finance)


Credit and Leverage in the Great Recession:


Brunnermeier, Markus, 2009. Deciphering the 2007/8 Liquidity and Credit Crunch. Journal of Economic Perspectives 23.

Kalemli-Ozcan, Sebnem, Bent E. Sorensen, and Sevcan Yesiltas. Leverage Across Firms, Banks, and Countries.  Journal of International Economics 88, 2012, 284--298. 


The Buffer Stock Model and Extensions:

Carroll 2001, Buffer Stock Model


Luengo-Prado and Sorensen Restat 2008 (in particular, includes housing which has large adjustment costs)


Chetty and Seidl QJE 2007 draw out a lot of implications of commitments, such as housing (a much cited paper)


Mian and Sufi has a body of very influential work on consumer credit and consumption in the Great Recession,

we will look at this 2016 survey paper (many references to recent work, some of which we may go over)


Kaplan, Mitman, and Violante 2016 shows that some of the results that Mian and Sufi obtains using proprietary data can be

replicated using easily available data. Esp. “Nielsen scanner data.’’ (I just got a tentative promise from the library, that they

will subscribe to the Nielsen data. I hope in time for us to use the data.)


Scanner data are used in many ways. I have myself and unfinished draft using an alternative scanner dataset, that I will go over briefly (also see the references, if this recent source of data is of interest)


My own paper with Demyanyk, Hryshko, and Luengo-Prado


Consumption Inequality and Partial Insurance, AER 2008, by Richard Blundell, Luigi Pistaferri, and Ian Preston


Spillovers (and more generally network effects) has been a hot topic for a while. I will talk about


Aitken and Harrison AER 1999 on Productivity Effects of FDI


Javorcik AER 2004 on Spillovers to Domestic Firms from FDI


Bloom, Schankerman, and Van Reenen ECA 2013 on Technology Spillovers from R&D


Draft of my Spillover paper


Uncertainty in Macro: Bloom ECA (2009): The Impact of Uncertainty Shocks

(we will focus on the ``big picture’’)


Granularity (or rather: Fat Tails) in Economics:\


Gabaix JEP 2016


Gabaix ECA 2011


An Application of mine: “Deep Financial Integration and Volatility” JEEA 2014



Tentative Requirements for Class (20 percent each):




Student Presentations:


Mon Nov 7: Yewande Hsieh-Klenow paper Presentation slides


Wed Nov 9: Heesuk Coeurdacier, Guibaud, Jin AER 2015 Presentation slides


Mon Nov 14: Chi-hung Townsend ECA 1994 Kinnan and Townsend AER PP 2012  slides


Wed Nov 16: Xavier 11.30-1 Berger Vavra ECA 2015 (appendix) slides

              and Eirini 2.30-4 Attanasio, Goldberg, Kyriazidou IER 2008  slides


Fri Nov 18: Lalita 3-4.30 Devereux and Yetman JIMF 2014 slides


Mon Nov 21: Dhanuska 11.3-1 Forbes, Fratzscher, Kostka, and Straub JIE 2016 slides

            and Michael 3-4.30 Guajaro, Leigh, and Pescatori JEEA 2014 slides


Mon Nov 28: Emeka Liu JDE 2008    slides


(Wed Nov 30: Exam)


Fri Dec 2: Daniel Linnainma,Torous, and Yae JFE 2016   slides








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Homework 1                                   Wednesday Sep 14


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