Macroeconomic Theory II [ECO-2202]

Course Instructor: Mukta Jain

Email: mukta.jain@ashoka.edu.in

Course Overview:
Macroeconomics is not just a discipline, but a thought process that shapes
our ability to think big. ECO-2202 is designed to initiate your journey to
develop, formalize and defend this mindset. I will use the basics of modern
growth theory to teach the way of addressing macroeconomic problems. It
starts by studying one of the most widely asked questions in macroeconomics
- how countries grow around the world. We will analyze various sources of
growth through theoretical models and explore ways to empirically support
the theoretical findings. Once the foundation for macroeconomic analysis is
established, we will discuss current patterns of growth and newly emerging
global challenges.

Course Prerequisites:
Macroeconomic Theory I (ECO 2201)
Mathematics for Economics (ECO 2101)
Students must be comfortable with functions, derivatives and optimization,
integrals, and simple differential equations. Basic knowledge of regression
analysis is also required.

Lectures & Drop-by Sessions:

Lectures: Mondays & Wednesdays (10:10 am to 11:40 am)
Drop-by Sessions: Mondays (12:30 pm to 3:00 pm)

Learning Outcomes:
After successfully completing the course, students should be able to attain
the following.
• Ability to formulate questions through macroeconomic lens.
• Understand key concepts in growth theory.
• Awareness of growth experiences in various countries.
• Get acquainted with empirical methods in macroeconomic research.
Course Outline: Macroeconomic Theory II ECO-2202

Reading Material:
Introduction to Economic Growth, by Charles I. Jones and Dietrich Vollrath,
Third Edition
(Abbreviation - J&V)
Economic Growth, by David N Weil. Third Edition
(Abbreviation - W)
Advanced Macroeconomics, by David Romer, Fourth Edition
(Abbreviation - R)
Macroeconomics, by Mankiw, Fifth Edition
(Abbreviation - M)
If needed, additional sources may be consulted as supplementary material for
specific segments of the course. This will be notified as the course progresses.

Topics Covered:
Below is an outline of the subjects I plan to cover in my lectures. Please note
that this list serves as a guide to the areas we’ll explore during the course. I
reserve the option to introduce new topics or omit certain ones based on our
pace and progress.
Expected
S.No. Content Reference
Time
Introduction: Chapter 1 (J&V)
1 2 Lectures
Evidences & Issues in Economic Growth Chapter 1 & 2 (W)
Solow Model, its Extensions &
2 Chapter 2 & 3 (J&V) 6 Lectures
Empirical Applications
Economics of Ideas & Technology:
3 Chapter 4 & 5 (J&V) 2 Lectures
Romer Model & Schumpeterian Model
4 Technology Transfer, Globalisation & Trade Chapter 6 (J&V) 1 Lecture
5 Endogeneous Growth Models Chapter 9 (J&V) 1 Lecture
MIDTERM 1 &
6 1 Lecture
GROUP TERM PAPER DISCLOSURE
7 Culture Chapter 14 (W) 1 Lecture
8 Geography Chapter 15 (W) 1 Lecture
9 Government Chapter 12 (W) 1 Lecture
10 Income Inequality Chapter 13 (W) 1 Lecture
11 Globalisation Chapter 11 (W) 1 Lecture
12 MIDTERM 2 1 Lecture
Two Period Consumption-Savings Problem Section 16.2 Page 437 - 447 (M)
13 6 Lectures
Overlapping Generations Model Chapter 2 Part B (R)
14 WRAP UP 1 Lecture

2
Course Outline: Macroeconomic Theory II ECO-2202

Evaluation:
End-Term Examination (30%), 2 Mid-Term Examinations (15% each), Group
Term Paper (30%), Attendance (5%) and Class Participation (5%)
The two mid-terms and final exam will be based on your knowledge of the
concepts taught in class (both theoretical and problem solving).
For the term paper, you will be asked to think creatively. You have to
critically evaluate the growth experiences of any country and argue why/why
not they line with the theories taught in the course. Additionally, you have to
suggest ways in which a specific theoretical model (taught in class) should be
tweaked to explain the empirics. I don’t expect you to create a mathematical
model, but suggest and explain intuitively the changes you would like to make
in existing model specifications. Here, the grades will be given for originality
in the thought process and the accuracy with which you identify and explain
the proposed solution.
If student misses any assessment/deadline, its weight will be added to the
final exam.

Course Organisation:
All communications (announcements, queries, lecture slides, readings, term
paper submissions, and result display) will be made through Google Class-
room (GC). Students will be required to download the application before the
course starts.

Attendance Policy:
Above 75% - Full Attendance
For each 5% less, one mark will be deducted.