Tydings Hall 4118F
Department of Economics
University of Maryland
Email: or contact form
Lecture: Tue and Thu 11am - 12:15pm in KEY 0117
Office Hours: Thu 3:30 - 4:30pm and by appointment
Course Fields: Macroeconomics, International Finance
The goal of this course is to get you started on doing cutting-edge research in macroeconomics and/or international finance, with special emphasis on imperfections in capital markets. We will follow a two-pronged approach towards this goal.
First, there is the regular lecture part, in which we will cover models of capital market imperfections and their implications for macroeconomic dynamics. We will develop a set of rigorous microeconomic foundations of different forms of capital market imperfections, including theories of credit rationing, incomplete risk markets, imperfect pledgeability and limited commitment. Then the course discusses the implications of these imperfections for macroeconomic dynamics, such as the financial accelerator, bubbles, as well as liquidity and solvency crises, with special emphasis on the ongoing financial crisis and policy responses.
The second and parallel part of the course consists of regular class assignments that aim to guide you along the process of formulating a cutting-edge research question in a proposal and carrying out your proposed research.
Participation: You are expected to prepare for each lecture by studying the required readings as indicated in the syllabus by (*) and as announced over time. This will enable you to actively and effectively participate in classroom discussions.
There will be four mandatory homework assignments throughout the semester.
One of the first course assignments is to write a Wikipedia entry of at least 1500 words that explains one of the economic concepts or terms that fall under the topic of our class to a general audience. The essay should then be publicly posted on Wikipedia (see e.g. this posting for an example from a previous year). An important part of this exercise is to perform a thorough literature review on a topic of your interest. I will require you to coordinate with me to pick a term (to avoid multiple entries on the same topic), to submit a draft which we will discuss in office hours, and later on to submit your final entry to Wikipedia. You can create the draft directly in Wikipedia on a "private" page - click here for a description on how to do so and how to make it public later on.
The course will also require you to summarize, evaluate and critique two recent papers from our reading list or on a related topic that you propose and to write a referee report. We will discuss in class which papers qualify. You will be asked to give a presentation on the paper and on your critique either in the week in which we cover a given topic or before spring break/at the end of the semester (see schedule below), and you should submit a paper version of your referee report before your presentation.
The referee report should (i) summarize the main economic insights of the paper without repeating the technicalities, (ii) evaluate what the marginal contribution is and whether you buy the results, and (iii) provide a constructive critique of what could/should be improved, e.g. what assumptions are questionable, what methodologies should be reassessed etc. Detailed instructions on how to write referee reports in our field are given at here (for our course, the purpose is naturally a bit different than for real referee reports: for example, points B.3, C.3, D.3, E.3 are irrelevant and can be left out). For examples see e.g. the “Discussions” in the NBER Macroeconomics Annual.
Occasionally I will ask each class participant to post a short essay (600 – 1000 words) to our class blog on a general, often non-technical, topic. I do not require a specific format for this, but I want you to try to be creative and thoughtful in these assignments and, to the extent possible, avoid group-think. The deadline for your posting is 8pm the day before the class meeting in which we will discuss your essays. Prepare to give us a three minute summary of your theses in class and read your colleagues’ posts between 8pm and our class meeting to prepare for a general discussion.
Research Proposal and Course Paper:
The ultimate goal of the course is to help you make the
transition from coursework to individual research. Therefore the core requirement will be the development
a feasible research question. I strongly recommend that you start working
on this right at the beginning of the semester. Please discuss your
thoughts on potential topics with me in the first or second week of class. You should have narrowed down a topic and
hand in a five page proposal in the week after spring break, which we will
discuss in detail in my office hours. An updated 10 page version of your extended research
proposal is due towards the end of the semester. By the end of the summer you are expected to hand in a research paper that is at least 20 pages long.
The proposals should include (i) an abstract that does not exceed 100 words and that captures the central idea of your proposal, (ii) a detailed introduction that explains why your research question is important and relevant and what precisely is your marginal contribution to the existing literature.
Furthermore, the proposal should cover the following: If it is for an empirical paper, include what data you will need, where you will get it from, and what regressions you will run (with a few sample equations). If it is for a theoretical paper, include a detailed model setup, describe what solution methods you will use and what results you expect.
Note: You are welcome to submit the same research proposal to my course and to another course, as long as (i) you notify both instructors of your plans and (ii) we determine that the paper topic falls under an area relevant to both courses.
Due dates (by 11am EST in our lecture):
If you hand in an assignment late, I will drop 33.3% of the points if handed in within 24 hrs of the deadline, and 66.6% if handed in by the following Monday, 1pm. I will not give credit for any assignments handed in later than this.