Economics 8346 
Dynamic Macroeconomics II
Spring 2014



Syllabus (updated 1/28/14, it is still tentative, we probably won’t get to all the topics)


Extra class Monday February 10. Mike presents a paper.


Monday February 17, Carolina presents a paper


Wednesday February 19, Pavlo and Sophia present a paper or two (with focus on the first one)


NOTE: Extra class Monday February 24. Edson presents a paper


Wednesday February 26, Celine presents a paper


Monday March 3, Taylor presents a paper or two (with focus on the first one)


Wednesday March 5, Subash presents a paper


Monday March 17, Bocong presents a paper


No classes on March 31st and April 2nd.

The course will cover various topics, mainly on the intersection of economics and finance.

How to write: Cochrane’s writing tips


Overview of Great Recession drivers: Brunnermeier, Markus, 2009. Deciphering the 2007/8 Liquidity and Credit Crunch. Journal of Economic Perspectives 23,

Firm Leverage:

Rajan, R., Zingales, L., 1995. What Do We Know About Capital Structure? Some Evidence From International Data. Journal of Finance 50, 1421--1460.

Lemmon, M.L., Roberts, M.R.,  Zender, J.F., 2008. Back to the Beginning: Persistence and the Cross-Section of Corporate Capital Structure. Journal of Finance 63, 1575--1608.

Adrian, T., Shin H., 2010. Liquidity and Leverage. Journal of Financial Intermediation 19, 418--437.

Adrian, T., Shin H., 2009. Money, Liquidity and Monetary Policy. American Economic Review (papers and proceedings), 99. (This is the paper I referred to in class.)

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

The impact of credit shocks on firms:

Gertler, M. and S. Gilchrist, 1994, Monetary Policy, Business Cycles, and the Behavior of Small Manufacturing Firms, Quarterly Journal of Economics, 109,  309--340.

Peek, J. and E. S. Rosengren, 2000, Collateral Damage: Effects of the Japanese  Bank Crisis on Real Activity in the United States,  American Economic Review, 90, 30--45.

Iyer, R., S. Lopes, J-L Peydro, and Antoinette Schoar, 2014,  Interbank Liquidity Crunch and the Firm Credit Crunch: Evidence From the 2007-2009 Crisis,  Review of Financial Studies, 27 (1): 347-372.

Amiti, Mary  and  David E. Weinstein, 2011, ``Exports and Financial Shocks," Quarterly Journal of Economics, Oxford University Press, vol. 126(4), pages 1841-1877.

Ostergaard, Charlotte, Amir Sasson, and Bent E. Sorensen ``Cash flow sensitivities and bank-finance shocks in nonlisted firms'' (Draft.)

Consumption in the Great Recession:

De Nardi, Mariacristina, Eric French, and David Benson, 2012. "Consumption and the Great Recession," {\it Economic Perspectives}, Federal Reserve Bank of Chicago, q1, pages 1-16. (Also NBER Working Paper 17688.)

Petev, Ivaylo, Luigi Pistaferri, and Itay Saporta Eksten (2013). ``Consumption and the Great Recession: an analysis of trends, perceptions, and distributional  effects.'' Stanford University Working Paper.

Alan, Sule, Thomas Crossley, and Hamish-Low, (2012). Saving on a Rainy Day, Borrowing for a Rainy Day. University of Cambridge, Working Paper.

Richard Blundel, Richard, Hamish Low, and Ian Preston, (2013). ``Decomposing changes in income risk using consumption data," Quantitative Economics, Econometric Society, vol. 4(1), pages 1-37, 03.


Mian, Atif and Amir Sufi (2009): ``Consequences of the Mortgage Credit Expansion: Evidence from the US Mortgage Default Crisis’’ QJE2009

Mian, Atif and  Amir Sufi, (2011).``House Prices, Home Equity-Based Borrowing, and   the US Household Leverage Crisis," American Economic Review, vol. 101(5), pages 2132-56, August.

Saiz: Housing Supply Elasticities

Landier, et al: House Price Correlations

Mian, Atif, Kamalesh Rao, and  Amir Sufi, (2013). ``Household Balance Sheets,   Consumption, and the Economic Slump'' Chicago Booth Working Paper (forthcoming QJE).

Michelozzi, Lorenzo ``Household Expenditures in the Great Recession,'' Job Market    Paper, Northwestern

Misallocation of capital:

Restuccia, D. and Rogerson, R. (2008) Policy Distortions and Aggregate Productivity with Heterogeneous Plants, Review of Economic Dynamics 11, 707-720.

Hsieh, C. and Klenow, P. (2009) Misallocation and Manufacturing TFP in China and India, Quarterly Journal of Economics 124, 1403-1448.

Kalemli-Ozcan, Sebnem and Bent E. Sorensen:   Misallocation, Property Rights, and Access to Finance: Evidence from Within and Across Africa (Forthcoming, NBER Volume)

The Role of Intermediary Goods/Production Chains:

Charles Jones: ``Intermediary Goods and Weak Links in the Theory of Development” AEJ: Macro 2011, 1-28

Bigio and La’O: ``Financial Frictions in Production Networks.’’ Working Paper.

Kim, Se-Jik, Hyun Song Shin, Sebnem Kalemli-Ozcan, Bent E. Sorensen, and Sevcan Yesiltas: “Financial Shocks in Production Chains” draft   (2014)