Macroeconomic Theory and Policy
Macroeconomics studies the dynamics of an economy as a whole, looking at the forces that lead to economic growth or recession, the overall distribution of income, and the causes of unemployment and inflation. Different schools of economic thought offer varying and often contradictory explanations of these dynamic trends. Public policy debates play a central role in this discussion, as the different macroeconomic models have implications for the roles of fiscal and monetary policy, the desirable level of governmental intervention into and regulation of the private economy, and even what constitutes a good macroeconomic outcome. In this course, we will build and examine the competing macro models beginning with Keynes and moving up to the present theoretical debates—including the monetarist, new classical, neo-Keynesian, post-Keynesian, and political economic schools of thought—with attention to their differing policy implications. We will then focus on the 2008 financial crisis and its aftermath as a case study, examining the debates about its causes and appropriate policy responses. This course requires a background in economics.