Wednesday, January 20, 2010

Econ 539-Public Policy Analysis: The Basics of Macro Policy and Growth

Today's class will have a look at the seminal paper by Mankiw, Romer and Weil as a way of introducing the topic of economic growth (and macroeconomics in general) and the appropriate role (if any) for government in the process. The role question will be largely relegated to a later discussion, while today's class will try and covey the basics about macro and growth and governmental manipulation.

I will start with a basic overview of the aggregate demand curve with a mention of the aggregate supply curve and talk about the natural level of output and deviations from it. I will also talk about the Phillips curve relationship, whether it really exists and what a government can try and do to deal with high unemployment episodes.

Finally we will chat a little about agglomeration externalities, urban redevelopment zones and fixed-route transit.

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