Teaching Materials
Spring 2008:
The Macroeconomics of Imperfect Capital Markets (2nd year Ph.D. course)
Capital market imperfections play a major role in macroeconomic
fluctuations such as business cycles, bubbles and financial crises. This
course will first analyze the micro-foundations of capital market
imperfections and theories about firms' capital structure. Next we
will focus on how these elements can be incorporated into a range of
macroeconomic models. The second half of the course will focus on
applications including the financial accelerator, credit crunches,
bubbles and emerging market crises as well as the macroeconomic
instability caused by imperfections in insurance and debt markets. The
course is designed with a view to help students make the transition
from coursework to individual research. Therefore the core requirement
will be the development of research proposals and a course paper.
- Syllabus
- Lecture 1: Introduction, Jan 29th
- Lecture 2: Perfect Capital Markets, Jan 31st
- Lecture 3: Credit Rationing (1), Feb 5th
- Lecture 4: Credit Rationing (2), Feb 7th
- Lecture 5: Equity Rationing, Feb 12th
- Lecture 6: Imperfections in Risk Markets, Feb 14th
- Lecture 7: Capital Structure and Firm Behavior, Feb 19th
- Lecture 8: Firm Behavior, Feb 21st
- Lecture 9: Limited Commitment in International Borrowing, Feb 26th
- Lecture 10: Limited Commitment in International Borrowing (2), Feb 28th
- Lecture 11: Liquidity: Diamond and Dybvig, Chang and Velasco, Mar 4th
- Lecture 12: Liquidity, Mar 6th
- Lecture 13: Financial Accelerator (1), Mar 11th
- Lecture 14: Financial Accelerator (2), Mar 13th
- Lectures 15 and 16: Discussion of Research Proposals, Mar 25th and 27th
- Lecture 17: Imperfect Capital Markets in Monetary Economics, Apr. 1st
- Lecture 18: Financial Accelerator in Monetary Economics, Apr. 8th
- Lecture 19: Introduction to Bubbles, Apr. 10th
- Lecture 20: Bubbles II, Apr. 11th
- Lecture 21: Bubbles III, Apr. 15th
- Lecture 22: Monetary Policy and Bubbles, Apr. 22nd
- Lecture 23: International Capital Flows and Risk-Taking, Apr. 24th
- Lecture 24: International Capital Flows and Risk-Taking II, Apr. 25th and 29th
- Lecture 25: International Capital Flows and Real Exchange Rates, May 1st
- Problem Set 1
- Problem Set 2
[Solution]
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