Introducing advanced macroeconomics: growth and business cycles

Aimed at the advanced undergraduate student, Introducing Advanced Macroeconomics: Growth and Business Cycles bridges the gap between intermediate macroeconomics texts and more advanced macroeconomics texts, something not currently available in the market. The text seeks to give students a thorough understanding of some fundamental workhorse models in macroeconomics and to introduce them to methods of formal macroeconomics analysis, without requiring too many technical skills. The first half of the book focuses on macroeconomics for the long run, introducing and developing the basic Solow model, while the second half of the book deals with the economy in the short run, focusing on the explanation of business fluctuations. Key features: • Focus on elementary and fundamental models: Rather than offering superficial coverage of a number of topics and different model types, this book provides a focused in-depth treatment of a limited number of basic macroeconomic models. • Empirical motivation and policy orientation: This book reviews the stylised empirical facts to be explained by the models and systematically confronts the model predictions with empirical data for several countries. The book also highlights the implications of the various models for economics policy. • Respect for rigour, but avoidance of unnecessary technicalities: This book offers an introduction to the methods of formal macroeconomics analysis. The combination of text and exercises teaches students how to set up and analyse simple macroeconomic models. However, unnecessary technicalities are avoided, and a balance between mathematical and graphical analysis is maintained. Students are only required to have some training in basic calculus and some familiarity with first-order difference equations. An appendix provides an accessible explanation of the OLS method of regression analysis to help students understand the empirical parts of the book. • A modernised exposition of growth theory: While carefully covering the conventional Solow model of economic growth and its extension allowing for human capital accumulation, the book offers two further novel extensions. First, it presents a Solow growth model of an open economy, providing a basis for a discussion of the effects of international capital mobility. Second, the book develops a simple Solow model with scarce natural resources, highlighting some of the issues in the debate on the environmental limits to growth. • Coherence and Internal Consistence: The Short Run and Long Run sections of this book can be used independently by the reader. It is, however, clear throughout how different models from different chapters and parts of this book can be linked to one another, providing the reader with greater flexibility when using this book. • Writing Style: The clear and lucid writing style of this text succeeds in clearly illustrating key points to the readers.