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Lecture Notes in Macroeconomics

Lecture Notes in MacroeconomicsJohn C. DriscollBrown University and NBER1 December 21, 20031 Department of Economics, Brown University, Box B, Providence RI 02912. Phone(401) 863-1584, Fax (401) 863-1970, web:http:\\ \ Copyright John C. Driscoll, 1999, 2000, 2001. All rightsreserved. Do not reproduce without permission. Comments welcome. I especiallythank David Weil, on whose Notes substantial parts of the chapters on Money andPrices and Investment are based. Kyung Mook Lim and Wataru Miyanaga provideddetailed corrections to typographical errors. Several classes of Brown students haveprovided suggestions and corrections. All remaining errors are Money and Definitions .. Prices .. Money .. The History of Money .. The Demand for Money .. The Baumol-Tobin Model of Money Demand .. Money in Dynamic General Equilibrium .. Discrete Time.

in the stochastic trend case (a random walk with drift).1 y t = ln(GDP) mea-sured at time t. In the first case, flt is the trend component or GDP and †t is the deviation around the trend. Changes in †t cause temporary variations in GDP, but do not affect the long-run level of yt, which is only determined by fi + flt, trend growth.

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