ECON BC3063 Senior Seminar: Will Macroeconomists Ever Agree? The Phillips Curve & NAIRU and Business Cycle Theory

Professor Sharon Harrison, Fall 2002

1. Description: By its nature, macroeconomics is controversial. There are no universally accepted theories of how an economy works. The goal of this course is to gain a deeper understanding of the disagreements that exist among economists regarding some of these theories. In an attempt to resolve these disagreements in our own way, we will supplement the theoretical analysis with our own empirical work. First we will examine the idea that a short run trade-off between inflation and unemployment exists; and that there is a level of unemployment below which inflation starts to accelerate. Given recent changes in our economy, this is an especially fitting topic to consider. Next, we will study several different theories of short run fluctuations, or business cycles, focussing on one in particular: real business cycle theory. While in the past, these theories stood in sharp contrast to one another, recent research in macroeconomics has integrated ideas from each. You will finish this course with an appreciation for some of the questions that macroeconomists today are struggling to answer.

2. Requirements: Class participation, Class presentations, weekly short papers, research paper.

3. Prerequisite: Everything except senior requirement.