This is a course in economic theory. The purpose of this course is for you to learn to manipulate economic models to analyze macroeconomic issues and problems. This involves several steps:
- Identifying the initial equilibrium
- Changing some parameter to model what’s happening in the issue or problem of interest
- Finding the new equilibrium
- Identifying how the equilibrium has changed
We will use economic models to explore three questions this semester:
- What caused the current recession?
- How is the recession likely to play out from this point?
- What are the optimal policy responses given where we find ourselves?
