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Module Reading List

Macroeconomics, 2019/20, Semester 1
Marco Veronese Passarella
Tutor information is taken from the Module Catalogue

LUBS5100M Reading List

Basic bibliography

There is no single textbook for this module but the following book cover most topics in one way or another:

1.  B. Snowdon, H.R. Vane, Modern macroeconomics : its origins, development and current state (2005)

2.  B. Hillier, The macroeconomic debate : models of the closed and open economy (1991)

3. G. Fontana and M. Setterfield (eds. 2010), Macroeconomic theory and macroeconomic pedagogy

4. W. Carlin and D. Soskice (2006), Macroeconomics : imperfections, institutions, and policies.

Further reading, specific to each session either in the form of book sections or Journal articles, will be provided in each session.

The following is a list of references that might be of interest for the seminars and as a complement to each session. It is not intended that you read everything listed below (though you are welcome to do so!) but rather to provide a range of alternative readings. I will be giving some guidance on relative importance of the readings during the course of the lectures, but speak to me after a lecture if you would like further guidance.

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Reading suggestions by topic

Classical model (General equilibrium analysis) and new classical macroeconomics

R. Layard and A. Walters, Microeconomic Theory, chapter 2

E.R. Weintraub, General Equilibrium Analysis, especially chapters 1 and 2

B. Hillier, The Macroeconomic Debate, chapters 7 and 8

W. Carlin and D. Soskice, Macroeconomics and the Wage Bargain chapter 4

 Symposium on rational expectations and classical macroeconomics in Journal of money, credit and banking., November 1980 (especially papers by Lucas, McCallum, Tobin and Okun)

W. Buiter, ‘The macro-economics of Dr. Pangloss: a critical survey of the new classical macroeconomics’, Economic journal., March 1980

R. Lucas, Models of business cycles

C. Plosser, ‘Understanding real business cycles’, The journal of economic perspectives., vol. 3

Re-appraisal of Keynesian economics

B. Hillier, The Macroeconomic Debate, chapter 4

R. Clower, ‘The Keynesian counter-revolution: a theoretical appraisal’ in R. Clower (ed.), Monetary Theory (Penguin)

A. Leijonhufvud, ‘Keynes and the Keynesians: a suggested interpretation’, American Economic Review, vol. 57 (1967), reprinted in R. Clower (ed.), Monetary Theory (Penguin)

A. Leijonhufvud, (1968) On Keynesian Economics and the Economics of Keynes: A Study in Monetary Theory

J. Brothwell, ‘A simple Keynesian response to Leijonhufvud’, Bulletin of Economic Research, vol. 27 (1975)

A. Drazen, ‘Recent developments in macro-economic disequilibrium theory’, Econometrica, vol. 48 (1980)

J. Muellbauer and R. Portes, ‘Macroeconomic models with quantity rationing’, Economic Journal, vol. 88 (1978)

J-P Benassy, ‘Nonclearing markets: microeconomic concepts and macroeconomic applications’, Journal of Economic Literature, vol. 31 (June 1993)

New Keynesian macroeconomics: efficiency wage, implicit contracts, credit rationing.

Symposium on Keynesian Economics Today in Journal of Economic Perspectives, vol. 7 no. 1 (Winter 1993)

S. P. Hargreaves Heap, The New Keynesian Macroeconomics, Part 2

C. Shapiro and J.E. Stiglitz, ‘Equilibrium unemployment as a worker discipline device’, American Economic Review, vol. 74 (1984)

G. Akerloff and J. Yellen (eds.), Efficiency wage models of the labor market especially editorial introduction

J. Stiglitz and A. Weiss, ‘Credit rationing with markets with imperfect information’, American Economic Review, vol. 71, pp. 393-410

J. Stiglitz, ‘Capital markets and economic fluctuations in capitalist economies’, European Economic Review, vol. 36, pp. 269-306

J. Stiglitz, and M. Weiss, ‘Asymmetric Information in Credit Markets and its Implications for Macro-Economics,’ Oxford economic papers. vol. 44, pp. 694-724.

J. Stiglitz, and B. Greenwald, Towards a new paradigm in monetary economics, Cambridge: Cambridge University Press.

O. J. Blanchard, and S. Fischer, Lectures on macroeconomics, Cambridge, Mass., USA and London: The MIT Press pp. 455-63 (efficiency wages) and pp. 478-89 (credit rationing)

Roy Rotheim, ‘Credit rationing’ in A handbook of alternative monetary economics, edited by Philip Arestis and Malcolm Sawyer, Cheltenham: Edward Elgar

R. Solow, ‘Alternative approaches to macroeconomic theory: a partial view’, Canadian Journal of Economics, vol. 12 (1979)

*M. Sawyer, ‘New Keynesian macroeconomics and the determination of employment and wages’ and ‘Menu costs and the nature of money’ in R. Rotheim (ed) New Keynesian Economics: Post Keynesian Alternatives, Routledge

S. Rosen, ‘Implicit contracts: a survey’, Journal of Economic Literature, vol. 23 (1985)

M.P. Taylor, ‘The simple analytics of implicit labour contracts’, Bulletin of Economic Research, vol. 39 (1987)


C. L. F. Attfield, D. Demery and N. W. Duck, Rational expectations in macroeconomics : an introduction to theory and evidence Second edition especially chapters 1,2 and 9

George W. Evans and Seppo Honkapohja, Learning and expectations in macroeconomics especially Chapter 1

Thomas J. Sargent, Bounded rationality in macroeconomics especially Chapter 1

Patrick Minford, Rational expectations macroeconomics : an introductory handbook, especially Chapters 1,2,3 and 6

H. Simon, ‘Bounded Rationality’ in J. Eatwell, M. Milgate and P. Newman (eds), The New Palgrave : a dictionary of economics, pp. 266-7

S.P. Dunn, ‘Non-ergodicity’, M. Glickman, ‘Uncertainty’, E. Tymoigne, ‘Expectations’ in J.E. King (ed.), The Elgar companion to post Keynesian economics Cheltenham: Edward Elgar


M. Lavoie, Foundations of post-Keynesian economic analysis, Chapters 4 and 7

Marc Lavoie, ‘Endogenous money : accommodationist’; Sheila Dow, ‘Endogenous money : structuralist’ and Peter Howells, ‘The endogeneity of money : empirical evidence’, all in A handbook of alternative monetary economics edited by Philip Arestis and Malcolm Sawyer, Cheltenham: Edward Elgar

*P. Arestis and M. Sawyer ‘The nature and role of monetary policy when money is endogenous’, Cambridge journal of economics. vol. 30, no. 6, pp.847-60

N. Kaldor, and J. Trevithick, ‘A Keynesian perspective on money’, Lloyds Bank Review., no. 139 (reprinted in M. Sawyer (ed. ) Post Keynesian Economics)

B. Moore, Horizontalist and Verticalists, Cambridge: Cambridge University Press (for a shorter summary of this see B. Moore, ‘The endogeneity of credit money’, Review of political economy., vol. 1, pp. 65-93)

M. Friedman, The optimum quantity of money, chapter 1

New Consensus in Macroeconomics

L.H. Meyer, ‘Does money matter? ’, Federal Reserve Bank of St. Louis Review, 83(5), 1-15. web link

P. Arestis, ‘What is the New Consensus in Macroeconomics? ’ in P. Arestis (ed) Is there a new consensus in macroeconomics?? Basingstoke: Palgrave-Macmillan

*M. Sawyer, ‘The foundations of monetary policy in the new consensus framework: a partial critique’ in P. Arestis (ed) Is there a new consensus in macroeconomics?? Basingstoke: Palgrave-Macmillan

J.B. Taylor, ‘Discretion Versus Policy Rules in Practice’, Carnegie-Rochester conference series on public policy. December, pp. 195-214.

K.N. Kuttner,. and P.C. Mosser, ‘The Monetary Transmission Mechanism: Some Answers and Further Questions’, Federal Reserve Bank of New York Economic Policy Review, 8(1), 15-24. (web link : url=%2Fresearch%2Fepr%2Findex%2Ehtml

L.E.O. Svensson, ‘What is Wrong with Taylor Rules? Using Judgement in Monetary Policy through Targeting Rules’, The journal of economic literature., XLI(2), 426-477.

G.A. Calvo, ‘Staggered Prices in a Utility Maximising Framework’, Journal of monetary economics., 12, pp.383-398.

Richard Harrison, Kalin Nikolov, Meghan Quinn, Gareth Ramsay, Alasdair Scott and Ryland Thomas, The Bank of England Quarterly Model (available at / )

M. Woodford, Interest and prices : foundations of a theory of monetary policy, Princeton: Princeton University Press Chapters and 3.

O.J. Blanchard, and S. Fischer, Lectures on macroeconomics, Cambridge, Mass., USA and London: The MIT Press particularly Chapter 6

A. Palacio-Vera, ‘The ‘modern’ view of macroeconomics: some critical reflections’, Cambridge journal of economics., vol. 29(5), pp. 747-768

J. Galí, M. Gertler, and J. David López-Salido, ‘Robustness of the estimates of the hybrid New Keynesian Phillips curve’, Journal of monetary economics. 52, 1107–1118


R. Layard, S. Nickell, and R. Jackman, Unemployment: Macroeconomic Performance and the Labour Market, Oxford: Oxford University Press

W. Carlin and D. Soskice, Macroeconomics and the wage bargain : a modern approach to employment, inflation and the exchange rate chapters 6, 7 and 8

R. Layard, and S. Nickell, ‘Unemployment in Britain’, Economica., vol. 53 (Supplement)

*M. Sawyer, ‘The NAIRU, aggregate demand and investment’, Metroeconomica, vol. 53, no.1, pp.66-94

P. Arestis and M. Sawyer, ‘Aggregate demand, conflict and capacity in the inflationary process’, Cambridge journal of economics., vol. 29, no. 6, pp. 959-974

Mathias Vernengo, ‘Money and inflation’ in A handbook of alternative monetary economics, edited by Philip Arestis and Malcolm Sawyer, Cheltenham: Edward Elgar

BAKER, D., GLYN, A., HOWELL, D. & SCHMITT, J. 2005. Labour market institutions and unemployment: A critical assessment of the cross-country evidence. In: HOWELL, D. (ed.) Fighting unemployment [electronic resource] : the limits of free market orthodoxy. Oxford University Press.

BALL, L. 1999. Aggregate Demand and Long-Run Unemployment. Brookings papers on economic activity., 1999, 189-251.

NICKELL, S., NUNZIATA, L. & OCHEL, W. 2005. Unemployment in the OECD Since the 1960s. What Do We Know? Economic journal., 115, 1-27.

BASSANINI, A. & DUVAL, R. 2009. Unemployment, institutions, and reform complementarities: re-assessing the aggregate evidence for OECD countries. Oxford review of economic policy., 25, 40-59.

Stock-Flow Consistent Models

GODLEY, W. & LAVOIE, M. 2007. Monetary Economics. An Integrated Approach to Credit, Money, Income, Production and Wealth, chapters 1, 2, 3, 7.

This list was last updated on 19/09/2019