My Ph.d. Macro reading list

Books: J. Bradford DeLong: Intermediate Macroeconomics, and Paul Blustein, And the Money Kept Rolling in (and Out)

Real Business Cycles

Stadler, George. “Real Business Cycles,” Journal of Economic Literature, December 1994, 1750-1783.

Long, John B. and Plosser, Charles. “Real Business Cycles,” Journal of Political Economy, 1983, 39-69.

Barsky, Robert and Miron, Jeffrey. “The Seasonal Cycle and the Business Cycle,” Journal of Political Economy, 1989, 503-534.

Prescott-Summers debate, Quarterly Review, Minneapolis Fed., “Theory Ahead of Business Cycle Measurement,” “Some Skeptical Observations on Real Business Cycle Theory,” and “Response to a Skeptic.”

Bils, Mark. “The Cyclical Behavior of Marginal Cost and Price,” American Economic Review, 1987, 838-55.

Romer, Christina. “Changes in Business Cycles,” Journal of Economic Perspectives, Spring 1999, 23-45.

Black, Fischer. “Noise,” Journal of Finance, 1986.

Mehrling, Perry. “Understanding Fischer Black,” you can find this paper at:

Finance and interest rates

Ross, Stephen. “Finance,” In The New Palgrave, pp.322-336.

Chapters six and seven, “Objects of Choice,” and “Market Equilibrium”.

Jagannathan, Ravi  and McGrattan, Ellen. “The CAPM Debate.” Federal Reserve Bank of Minneapolis,  Fall 1995, 2-17.

Campbell,  John Y. and Vuolteenaho, Tuomo, “Bad Beta, Good Beta,” American Economic Review, December 2004, 1249-1275.

Campbell, John, “Some Lessons for the Yield Curve,” Journal of Economic Perspectives, Summer 1995, 129-152.

Siegel, Jeremy and Thaler, Richard. “The Equity Premium Puzzle,” Journal of Economic Perspectives, Winter 1997, 191-200.

Kocherlakota, Narayana R. “The Equity Premium: It’s Still a Puzzle,” Journal of Economic Literature, March 1996, 42-71.

Lee, Charles, Shleifer, Andrei, and Thaler, Richard. “Anomalies: Closed End Mutual Funds,” Journal of Economic Perspectives, Fall 1990, 153-164.

Keynesian Economics

Cowen, Tyler. “Why Keynesianism Triumphed Or, Could So Many Keynesians Have Been Wrong?”, Critical Review, Summer/Fall 1989, 518-530.

“Symposium: Keynesian Economics Today,” Journal of Economic Perspectives, Winter 1993, 3-82.

“Is There a Core of Practical Macroeconomics That We Should All Believe?” American Economic Review, symposium, May 1997, 230-246.

Taylor, John. “Reassessing Discretionary Fiscal Policy,” Journal of Economic Perspectives, Summer 2000, 21-36.

Bernheim, B. Douglas. “A Neoclassical Perspective on Budget Deficits,” Journal of Economic Perspectives, Spring 1989, 55-72.

Eisner, Robert. “Budget Deficits: Rhetoric and Reality,” Journal of Economic Perspectives, Spring 1989.

Stiglitz, Joseph E. “The Causes and Consequences of the Dependence of Quality on Price.” Journal of Economic Literature, March 1987, 1-48.

Hall, Robert E. “Employment Fluctuations with Equilibrium Wage Stickiness,” American Economic Review, March 2005, 50-65.

Summers, Lawrence. “The Scientific Illusion in Empirical Macroeconomics,” Scandinavian Journal of Economics, 1991, 129-148.

Monetary Policy

Blinder, Alan. “What Central Bankers Can Learn From Academics – and Vice Versa,” Journal of Economic Perspectives, Spring 1997, 3-20.

Bernanke, Ben and Mishkin, F. “Inflation Targeting,” Journal of Economic Perspectives, Spring 1997, 97-117.

Aiyagari, S. Rao, “Deflating the Case for Zero Inflation,” Federal Reserve Bank of Minneapolis, Quarterly Review, Summer 1990, 2-11.

“Symposium on the Monetary Transmission Mechanism,” Journal of Economic Perspectives, Fall 1995, 3-96.

Roberds, William. “What Hath the Fed Wrought? Interest Rate Smoothing in Theory and Practice,” Federal Reserve Bank of Atlanta, Economic Review, January/February 1992.

Shafir, Eldar, Diamond, Peter, and Tversky, Amos. “Money Illusion,” Quarterly Journal of Economics, May 1997, 341-374.

Caplin, Andrew and Spulber, Daniel. “Menu Costs and the Neutrality of Money,” Quarterly Journal of Economics, November 1987, 703-725.

Sargent, Thomas and Wallace, Neil. “Some Unpleasant Monetarist Arithmetic,” Federal Reserve Bank of Minneapolis, Quarterly Review, 1985, 1-17.

Wallace, Neil. “A Legal Restrictions Theory of the Demand for “Money” and the Role of Monetary Policy,” Federal Reserve Bank of Minneapolis Quarterly Review, Winter 1983.

Posen, Adam. “Why Central Bank

Independence Does Not Cause Low Inflation: There is No Institutional Fix for Politics,” in Finance and the International Economy, edited by Richard O’Brien, 1993.

Garrison, Roger, “The Austrian Theory of the Business Cycle,” At  href=""

Krugman, Paul. “The Hangover Theory,” at

Cowen, Tyler. Risk and Business Cycles, chapter three.

Savings and social security

Hubbard, R. Glenn and Skinner, Jonathan. “Assessing the Effectiveness of Savings Incentives.” Journal of Economic Perspectives, Fall 1996, 73-90.

Choi, Laibson, Madrian, and Metrick, “Optimal Defaults,” American Economic Review, May 2003, also at ttp://

Samwick, Andrew. Voxbaby weblog, read the entries on social security.

International Economics

Current issues:

“If I Believed in Austrian Business Cycle Theory,” by

Tyler  Cowen, on

Brad Setser’s WebLog.

Dornbusch, Rudiger. “Purchasing Power Parity,” in The New Palgrave.

Friedman, Milton. “The Case for Flexible Exchange Rates.” In Essays in Positive Economics, 1953, University Chicago Press.

Mundell-Fleming model, see Brad’s book.

The World


Krugman, Paul R. “It’s Baaack:

Japan’s Slump and the Return of the Liquidity Trap,” Brookings Papers on Economic Activity, 1998, 29, 2, 137-87.

Kashyap, Anil K. “Sorting out Japan’s Financial Crisis,” Federal Reserve Bank of Chicago Economic Perspectives, 2002, 26, 4, 42-55.





Developing Nations



Bordo, Michael D. “Essays in Exploration: A Survey of the Literature,” Explorations in Economic History, 1986, 339-415.

“Symposium: The Great Depression,” Journal of Economic Perspectives, Spring 1993, 3-102.

Romer, Christina H “What Ended the Great Depression?” Journal of Economic History, 1992, 52, 4, 757-84.

Here is a searchable link to Brad DeLong’s website:


"Overall I am struck by how much the field is boiling down to common sense and a few key policy issues..."


All we did in grad school was read Romer, Farmer and Sargent textbooks until we were blue in the face. Neither I nor most of my colleagues had (or presently have) a clue what macroeconomics is really all about. I suspect many other graduates of similar programs would say the same thing. It looks like the GMU students are in for a good course. Unfortunately it's too late for me to learn.


A fine idea.

Don't people love free lunch?

disclaimer: I have not put much thought into this.
Barro's undergrad textbook is good on RBC view of the world.
finance: Diamond-Dybvig (sp?); local interactions models
open economy stuff (6 puzzles paper; Obstfeld/Rogoff text);
home bias papers
Richmond Fed review article on price stickiness models
Hall 77 consumption; then Carroll's buffer-stock paper
Basu etc. on measuring productivity shocks and effects
at least one serious effects-of-aggregation paper

I just took Phd macro this past spring. We had a long reading list, but the course grade depended solely on cranking through analytical problems. Will your incentive scheme be different Tyler?

p.s. How many of my readings did I actually read?

Seems a bit short on the classics.

I always hated macro because the Keynesian stuff just seemed like castles in the air and the new classical stuff had all the things I didn't like about GE theory.

That said, you might want your students to know about sunspot equilibria and coordination theories of the business cycle. And Mortensen's labor search models cast a really different perspective on unemployement and macro policy.

May have to sit in :) - FYI get a fair amount of Mundell-Fleming in Macro II. Have fun with it!

Can someone tell this curious reader how quant-heavy this class appears to be?

Also, Tyler, why not go the MIT Open Course route, and publish your lecture notes on the web?

I am amazed that the General Theory is not part of the reading. Has anybody even heard of Minsky? No wonder macroeconomists have such a dismal record at understanding real-world issues.

BTW, let me say that RBC is a joke EVEN if you accepted the pardigms of neoclassical economics. No serious microeconomist will believe that the aggregation conditions required for representative agents to representative actually hold. And RBC theorists have the gall to demand microfoundations of others?


Surprised not to see Barro-Gordon 1983 on this list. Something to balance Posen. Or find a good survey on CBI. International econ: A fear of floating paper would help. And I'll second Kling's recommendation of Fischer's hyperinflation survey.

Hope you'll blog the course -- I miss teaching this.

RJW - I like specific models because they force the economist to be clear and consistent. For example, consider expectations. You mention that Keynes largely assumed rational expectations. Yet there's also the famous passage about "animal spirits" and the denial that rationality even means anything, for practical purposes, when one is forecasting at long horizons. This is what is invalid, not just about this book, but about "literary" economics in general - too much freedom to contradict oneself.

No, more advanced math is not necessarily progres, but internal consistency is.


Keynes essentially assumes "rational expectations" in the short run - in the sense that he assumes entrepreneurs guess right about the market demand for their product in the current production period. They do not systematically have expectations that are falsified. Keynes does this to explain the mechanics of the model without overcomplicating the discussion of equilibrium.

However - Keynes is at pain to stress that in reality, when it comes to investment spending, forming expectations is very tricky, as the profitability of investment depend on myriad factors. At that points Keynes starts to stress the difficulty of forming reasonable expectations about the long run. And animal spirits come into play.

Keynes is not being inconsistent.

He is simply talking about two different things.

Agree fully d-squared - it an excellent book. And yes, Keynes's exposition of savings in ch 7 caused a lot of trouble. There he was indeed guilty of not using terms consistently. Though Chick does a pretty good job of clearing that one up.

Keynes's technical analysis,as he stated in chapters 2 and 3 of the GT,is contained in chapters 19(appendix to chapter 19),20(plus the elasticity result at the bottom of p.116) and 21.Keynes's results are in the form of elasticities.Any mathematically competent reader of the GT need only simplify the elasticity results and compare those results with the simplified results presented by Pigou in 1933, on pp.86-102,Part II,chapters 8-10 of his The Theory of Unemployment.Pigou's special aggregated,macroscopic result is that Full employment occurs if w/p=mpl,where w = the money wage,p= the price level,w/p is the real wage,and mpl is the macroscopic marginal product of labor derived from an aggregated,neoclassical production function.Keynes's generalized result is that Full employment(defined to exist if there is only frictional/voluntary unemployment) is one possible outcome in a set of stable multiple equilibria given by the optimality condition w/p=mpl/(mpc+mpi),where mpc is the marginal propensity to spend on consumption goods and mpi is the marginal propensity to spend on investment goods.Only in the special case where mpc+mpi=1 will the equilibrium be a full employment equilibrium.If mpc=mpi<1,involuntary unemployment automatically occurs.Labor,AS A WHOLE,will not be able to cut its money wage to reduce this kind of unemployment.The condition that mpc+mpi =1 requires the economy to be operating on the boundaries of both the static(short run) and dynamic(long run) production possibilities frontiers.

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