Archive for April, 2009

Further Study (335/402): Barro vs. Krugman

April 30, 2009

In case you want to revisit the Barro vs. Krugman debate as a study break, here is a debate between them on the Charlie Rose show.  It is old — 2004 — but they cover the same issues — growth vs. fairness, etc.   The clip is about 20 minutes long: Krugman vs. Barro.

HT to Kiro Yovkov.

Posted at 9:23 am, Eastern

Class News (402): Problem-Set Answers

April 29, 2009

Answers to the first 6 questions on the extra-credit problem set (Barro questions) are now in the 402 Exam Locker.  Answers to SGM questions will be posted tomorrow.  Note: The answer key includes additional study notes that will be useful in final-exam prep.

Posted at 7:15 Eastern

Class News (402): FAQs

April 29, 2009

I have written answers to several questions on the problem set that repeatedly showed up in my inbox.  I added the sticky-price (menu cost) analysis from yesterday to this list of questions/answers.  You can find these FAQs in the 402 Exam Locker.

Posted at 10:13 am Eastern

Class News (402): Study Tips

April 28, 2009

I will not post study tips for the final exam.  All you need is the extra-credit problem set and F&S questions over chapters 11-13.

Posted at 2:48 Eastern

Class Notes (402): NK Model and Prices

April 28, 2009

I have received a number of emails from students confused because I said in class the New Keynesian model predicted a procyclical price level while Barro said it predicted a countercyclical price level.  You may stick with my explanation — which was intended to simplify things.   For a deeper understanding of the difference (as well as a more detailed discussion of my version), click here: sticky-price-model-and-the-price-level see the FAQs in the 402 Exam Locker.

Posted at 11:35 am Eastern Updated 4/29 at 10:15 am

Class News (402): Barro Slides Available

April 28, 2009

Slides for Barro chapters 12-16 are now in the 402 Exam Locker.  (Note: These are just the slides that came with the book.  I don’t think they anything to the book, but I have had several requests for them.)

Posted at 9:07 am CST

Further Study (335): Fed Independence

April 28, 2009

The Becker-Posner blog has an interesting back-and-forth on Fed Independence that might be useful in thinking about the related question on your final-exam study sheet.  Immediately prior to these posts is a back-and-forth on stock-market efficiency.  You can get to the blog by clicking on the link under “Favorite Econ Blogs.”

Posted at 9:40 am Eastern

Admin Alert (402): Turning in Extra Credit

April 27, 2009

Extra credit assignments are due Wednesday, April 29th by 5pm. Please, turn them in to Luiggi (Seigle 376) in one of these windows:

9 am to 11.30 am
2 pm to 5 pm

Posted at 10.19 a.m. CST

Class News (402): Final Exam FAQs

April 27, 2009

I  have received several similar questions about the final, so I thought it might be helpful to post them along with answers.

Question: The 402 End-of-Term post says the final exam for section 1 is on Monday, May 1st.  Did you mean Monday, May 4th?
Answer: Yes, it was a typo that has been corrected.  Sorry.

Question: There is material in Barro, chapters 12-16, we did not cover in class.  Is that fair game?
Answer: Anything in those chapters is fair game, but the probability of a question not addressed in the extra-credit problem set is low.

Question: The problem set contains two questions on the Solow Growth Model (SGM).  That material is not in Barro, chapters 12-16.  Will SGM questions be on the final?
Answer: I could ask something about the specific SGM questions on the problem set.  But apart from that, there will be no questions that do not come from Barro, chapters 12-16, and Friedman and Schwartz, chapters 11-13.

Posted at 9:28 am EDT

Class News (335): More Final Exam Info

April 24, 2009

Study Tips
A study guide for the final exam is now in the 335 Exam Locker.

Causes of the Financial Crisis
On the last day of class, I spent about 20 minutes trying to tie what we learned this semester into a coherent list of causes of the financial crisis.  I  have gotten emails from a number of students (who missed class or lost me in class) asking for references.  A few are linked below to get you started.  I will add to the list over the next week.

  1. Housing Policy: THE ECONOMIST – Home Ownership: Shelter or Burden?
  2. Politics/U.S. Housing Policy: WSJ – Roberts: How Government Stoked the Mania.
  3. Monetary Policy: WSJ-Taylor: How Government Created the Financial Crisis.
  4. Bank Supervision: THE ECONOMIST – Rajan: Cycle-Proof Regulation

Here is a PowerPoint slideshow (cartoon) explaining the subprime meltdown.  Warning: It is funny but very vulgar.  For example, if the “f” word bothers you, please don’t look at it.  I link it because it accurately captures what happened:  subprime-meltdown.

Financial Crisis and Recession

  1. Here is a New York Times graphic tracing the crisis in terms analagous to Figure 2, p. 209 (Miskhin): NYT – Primer on the Financial Crisis.
  2. The presentation I gave at the examiner conference on April 14th also includes discussion of the causes of the current recession.  Here it is: vaughan_ffiec-presentation_april-2009.
  3. Op-Ed by Steven Gjerstad and Vernon Smith, tracing the role of household leverage in bringing on the recession: WSJ – Gjerstad-Smith: From Bubble to Depression

Updated at 12:02 pm EDT