Core Macroeconomics, Hilary Term 2015

Week 8: Free to choose

The opinion poll failed to reveal many strong opinions, much less a consensus. This week's essay can be chosen from two topics, each of which was requested by two students. Both are further developments of subjects we studied earlier in the term. (Free to Choose, just to explain the possibly-obvious and probably-unamusing allusion, was a popular book and television series by Milton Friedman from about 1981.)

Readings

For the growth topic, the readings are those for Week 1. For monetary policy with panicky asset markets, Carlin & Soskice (new ed.) Chs. 5-7 will be a good start.

Assignment

Please write an essay on one of the following.

"Endogenous growth models are useless for explaining either the level or growth rate of GDP per capita around the world. Exogenous growth models augmented to include factors of production such as human give us a much better account." Discuss.

Should central banks consider housing prices when setting interest rates? If so, should house prices be part of their objective function or just another economic indicator they monitor? (If you wish you can consider other asset categories. I thought housing was the most straightforward and kept the topic a little more focussed.)