Is Anyone Learning Real Macroeconomics?
Robert Lucas has an interesting column in today’s Wall Street Journal on the two biggest advances in macroeconomics over the last half-decade (tax reducations and inflation targeting). I am not asking anyone to debate whether this view is on target, but rather I am curious as to whether any of you have encountered any real macroeconomics in your classes? Or have you all already started with dynamic programming models, difference equations, and the like? I have no recollection of learning anything important in my graduate macro classes and a yearning to actually understand the big picture issues.
Don’t we all want to know things like:
- How does money work?
- What is the role of expectations in inflation?
- What lags are there to central bank policy changes?
- Can a central bank affect the real interest rate (we know they can affect nominal ones)
- What is the current state of understanding on exchange rate determination?
- What did Bretton Woods do, and has the cleaving off of the gold standard in the early 1970s been a good or bad thing?
- What really happened before and during the Great Depression?
- What role, if any, should the IMF and World Bank play today?
And much more! I’d love to hear about any real macro that you guys are exposed to. And if not, what the heck are you learning?
Differential equations. Lots of differential equations.
Actually, the first part of the course is about growth, and the second is about business cycles, so I can’t say much about the latter yet. Personally, I think growth is the more interesting topic. As my favorite new professor points out, most of the world would benefit much more from faster growth than from smoother cycles.