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Instructors: Dr. Thanh Son Pham
Event type:
Lecture + practical course
Displayed in timetable as:
Hours per week:
3
Credits:
6,0
Language of instruction:
English
Min. | Max. participants:
- | 75
Comments/contents:
The real consequences of the Business Cycles (economic fluctuations) are often devastating. Not only do recessions and depressions reduce standards of living and increase poverty, but they undermine the public’s confidence in the benefits of capitalism and often democracy. As we saw during the global financial crisis that began in 2007 or the Euro-zone debt crisis that began in 2009, economic downturns and their lingering slow-growth aftermaths have the potential to spread fear, encourage xenophobia, and undermine international political and economic systems that have taken decades to develop. Understanding the nature and causes of business cycles in an effort to develop policies to eliminate them is a noble, but difficult, endeavor with potentially enormous implications for human welfare.
This course will provide in-depth empirical and theoretical analyses of the following three questions:
1. Why are economies subject to periods of negative output growth (recessions)?
2. How do you explain severe economic contractions (depressions)?
3. What government policies can be used to moderate and prevent business cycles, or is government policy the cause of, not the solution to, business cycles?
Especially, the course focus on the theories are presented based on a micro-founded intertemporal model of the economy that provides understanding on how different types of shocks cause macroeconomic fluctuations.
Contents
1 Facts of Business Cycles
2 Macroeconomic theories of Business Cycles
- Early Business cycle Theories: Keynesian, Australian, Monetarist, and rational expectations .
- Real Business cycle models
3. New Keynesian Models
4 Modern International Recession and Depressions
- Sovereign debt crises and the Euro-zone
- The Global financial Crisis of 2008
5 Business cycle in the United state
Learning objectives:
1. Understand facts about business cycles, why studying business cycles is important?, especially to macroeconomic stabilization policies?
2. Understand the theories behind these booms and recessions of a business cycle?
?3. How government can intervene through the macroeconomic policies to soften the severe economic fluctuations caused by business cycles.
Literature:
1. Knoop, Todd A. Business cycle economics : understanding recessions and depressions from boom to bust (2015), Empirical readings
2. Lutz G. Arnold. Business Cycle Theory (2002), OXFORD University press
3. Beaudry, P., and Portier, F., (2006): Stock Prices, News and Economic Fluctuations, American Economic Review, Vol. 96, pp. 1293-1307
4. Blanchard, O., and Quah, D., (1989): The Dynamic Effects of Aggregate Demand and Aggregate Supply Disturbances, American Economic Review 79, pp. 655-673.
5. Campbell, J. Y., and Mankiw, N. G., (1990): Permanent Income, Current Income, and Consumption, Journal of Business and Economic Statistics 8, pp. 265-279.
6. Additional references to be added during the semester.
Additional examination information:
There will be lecture and exercise sessions. During the exercise sessions, the problem sets given to students in advance will be solved. The written exams will be similar to the exercises in the problem sets.
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