Topics in Macroeconomics II (second half) - Winter 2010

Thijs van Rens

Barcelona Graduate School of Economics
UPF Graduate Program in Economics, Finance and Management

The first half of this course was taught by Jaume Ventura.

 

Syllabus for the second half

Since this is an advanced topics course, the goal is for you to learn how to read and critically evaluate papers. Therefore, I will teach only the background: the basic models and the most uncontroversial insights. No more than half of the class will consist of lectures of this type. In addition, and instead of problem sets, I will assign readings each week (see below). You need to prepare those before coming to class each week. I will randomly pick a student to explain each paper. The only thing you need to explain is the main contribution of the paper and the mechanism behind that, e.g. pointing out one or two equations or a graph. Then, we will discuss the paper together, trying to evaluate the importance and credibility of the contribution. Your presentation and participation in the discussion will count towards your grade, in addition to a take-home exam.

 

Readings

Week 6

Lectures: Labor Market Frictions and the Unemployment Volatility Puzzle

Pissarides (2000). Equilibrium Unemployment Theory
*Rogerson, Shimer and Wright (2005)
*Shimer (2005)
*Hagedorn and Manovskii (2008)

Week 7

Homework (February 24): Solutions to the Unemployment Volatility Puzzle

*Mortensen and Nagypal (2007)
*Petrosky-Nadeau (2009)
*Menzio and Shi (2008)
*Brown, Merkl and Snower (2009)
Reiter (2007)
Quadrini and Trigari (2007)
Faccini and de Pace (2009)
Guerrieri (2007)

Other lectures: RBC, Complete Markets, Search Frictions and the Labor Wedge

*King and Rebelo (1999)
*Shimer (2009). Labor Markets and Business Cycles (slides), chapters 1-3

Week 8

Homework (March 2): Empirical Evidence on Wage Rigidity

*Pissarides (2009)
Haefke, Sonntag and van Rens (2008)
Kudlyak (2009)
*Gertler, Huckfelt and Trigari (in progress), see Gertler and Trigari (2009, section 5.3.1)
Carneiro, Guimaraes and Portugal (2009)
Martins, Solon and Thomas (2009)
Hall and Krueger (2008)
*Hagedorn and Manovskii (2009)
*Gnocchi and Pappa (2009)

Other lecture: Theories of Wage Rigidity and Cyclical Unemployment

*Romer (2006). Advanced Macroeconomics (third edition), chapter 9
Blanchard and Fisher (1989).
Lectures on Macroeconomics, sections 9.1-9.4
Bewley (1999).
Why Wages Don’t Fall During a Recession
*Barro (1977)
*Hall (2005)
Shimer (2009). Labor Markets and Business Cycles (slides, more slides), chapters 4 and 5
Christoffel, Costain, de Walque, Kuester, Linzert, Millard and Pierrard (2009)
*Michaillat (2010)

Week 9

Homework (March 9): Endogenous Job Destruction and Cyclicality of Separations

*Shimer (2005)
*Fujita and Ramey (2008)
Hall (2005)
Davis (2005)
Yashiv (2007)
Elsby, Hobijn and Sahin (2009)
Davis, Faberman and Haltiwanger (2009)
Mortensen and Pissarides (1994)
*Ramey (2008)

Other lecture: Changes in Labor Market Dynamics

Hall (2007)
Gali and Van Rens (2010)
Champagne and Kurmann (2010)
Nucci and Riggi (2009)
Gordon (in progress)
Stiroh (2009)

Exam

The (take-home) exam will be posted on Sunday March 21 at 10:00 and will be due in my email by 20:00 that day. The readings below were posted at 18:00 on Monday March 15. You may choose your topic of interest and only need to read the two papers associated to that topic.

The public sector and the labor market

Quadrini and Trigari (2007)
Gomes (2009)

Wage rigidity and unemployment volatility: empirical evidence

Haefke, Sonntag and van Rens (2008)
Kudlyak (
2009)

The Great Moderation and the labor market

Gali and Van Rens (2010)
Champagne and Kurmann (2010)

 

Readings by topic

Please suggest any topics or papers that you think should be added to this list of potential readings!

Cyclicality of the labor wedge
Parkin (1988)
Rotemberg and Woodford (1999)
*Hall (1997)
Mulligan (2002)
*Chari, Kehoe and McGratten (2007)

Elasticity of labor supply
*Petrongolo and Pissarides (2001)
*Rogerson and Wallenius (2007)
Gourio and Noual (2007)

Alternative formulations of the unemployment volatility puzzle
Costain and Reiter (2008)
*Mortensen and Nagypal (2007)
Farmer and Hollenhorst (2006)
Hornstein, Krusell and Violante (2005)
Yashiv (2006)

*Explanations for the unemployment volatility puzzle
Mortensen and Nagypal (2007)
Reiter (2007)
Quadrini and Trigari (2007)
Menzio and Shi (2008)
Petrosky-Nadeau (2009)
Faccini and de Pace (2009)
Brown, Merkl and Snower (2009)

Heterogeneity
Lilien (1982)
Abraham and Katz (1986)
Shimer (2007)
Pries (2007)
Guerrieri (2007)
Lucas and Prescott (1974)
Alvarez and Shimer (2008)
Guerrieri, Shimer and Wright (2010)
Bachmann and David. The Importance of Two-Sided Heterogeneity for the Cyclicality of Labour Market Dynamics
Helpman, Itskhoki and Redding
Krusell, Mukoyama, Rogerson and Sahin
Bils, Chang and Kim

Inequality
McCall
Lucas and Prescott
Ljungqvist and Sargent (2004).
Recursive Macroeconomic Theory (second edition), chapters 6 and 26
Diamond (1971)
Albrecht and Axel
*Burdett and Mortensen
*Hornstein, Krusell and Violante

*Wage rigidity and cyclical unemployment
Blanchard and Gali (2008)
Gertler and Trigari (forthcoming)
Krause and Lubik (2007)
Rotemberg (2006)
Rudanko
Hall and Milgrom (2008)
Christoffel, Costain, de Walque, Kuester, Linzert, Millard and Pierrard
Michaillat (2010)

*Empirical evidence on wage rigidity
Pissarides (forthcoming)
Haefke, Sonntag and van Rens (2008)
Kudlyak (2009)
Gertler, Huckfelt and Trigari (in progress), see Gertler and Trigari (2009, section 5.3.1)
Gnocchi and Pappa (2009)
Martins, Solon and Thomas (2009)
Hall and Krueger (2008)
Hagedorn and Manovskii (2009)
Carneiro, Guimaraes and Portugal (2009)

Rent sharing
Nickel (1999).
Product Markets and Labour Markets, section 2.3
Blanchflower, Oswald and Sanfey (1996). Wages, Profits, and Rent-Sharing
Carlsson, Messina and Skans

Empirical evidence on job and worker flows
Davis and Haltiwanger (1990). Gross Job Creation and Destruction: Micro Evidence and Macro Implications
Davis and Haltiwanger (1999). On the Driving Forces behind Cyclical Movements in Employment and Job Reallocation
*Shimer (2005).
Reassessing the Ins and Outs of Unemployment
Willis, Cooper and Haltiwanger (2007)

Other evidence and alternative driving forces
Gali and Rabanal (2004)
Gali, Gertler and Lopez-Salido (2007)

Michelacci and Lopez-Salido (2007)
Michelacci, Canova and Lopez-Salido (2007)
Balleer (2008)
Barnichon (2008)
Balleer and Van Rens (2010)
Ravn and Simonelli (2007)

*Endogenous job destruction and the cyclicality of the separation rate
Shimer (2005)
Fujita and Ramey (2008)
Hall (2005)
Davis (2005)
Yashiv (2007)
Elsby, Hobijn and Sahin (2009)
Davis, Faberman and Haltiwanger (2009)
Mortensen and Pissarides (1994)
Ramey (2008)

Propagation
Cole and Rogerson
Fujita and Ramey (2006)

Changes in labor market dynamics
Hall (2007)
Gali and Van Rens (2010)
Champagne and Kurmann (2010)
Nucci and Riggi (2009)
Gordon (in progress)
Stiroh (2009)

Assortative Matching
Abowd and Kramartz
Eeckhout
Lopes de Melo

Money search
Kiyotaki and Wright
Trejos and Wright
Kocherlakota

 


Thijs van Rens  |  IDEAS/RePEc  |  Google Scholar  |  ResearchGate