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lse-2-m-15-978190989069503011597819098906950610.31389/lsepress.ame01internal-reference200EBE10710Creative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/0101Advanced MacroeconomicsAn Easy Guide1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng004180323User DefinedMacroeconomics23User DefinedEconomic Theory23User DefinedEconomic Policy23User DefinedEconomics12Advanced macroeconomics12Economic Growth12Economic Fluctuations12Business Cycles12Fiscal and Monetary Policy12Macroeconomic Policy Discussions10BUS03900093KCB010110300Note: Since the many formula in the EPUB and Mobi versions of the book are displayed as images, we recommend using a medium-sized font for reading. Formulae font may not match well with the main text font if very small or very large text font sizes are chosenRead online or download for freeScroll down to open individual chaptersSupplementary material for this textbook, including slides and DSGE and VAR estimation tutorials, can be found <a target="_blank" href="https://zenodo.org/communities/advanced_macroeconomics?page=1&size=20">here</a>Supported by the LSE Knowledge Exchange and Impact FundMacroeconomic policy is one of the most important policy domains, and the tools of macroeconomics are among the most valuable for policy makers. Yet there has been, up to now, a wide gulf between the level at which macroeconomics is taught at the undergraduate level and the level at which it is practiced. At the same time, doctoral-level textbooks are usually not targeted at a policy audience, making advanced macroeconomics less accessible to current and aspiring practitioners. This book, born out of the Masters course the authors taught for many years at the Harvard Kennedy School, fills this gap. It introduces the tools of dynamic optimization in the context of economic growth, and then applies them to a wide range of policy questions – ranging from pensions, consumption, investment and finance, to the most recent developments in fiscal and monetary policy. It does so with the requisite rigor, but also with a light touch, and an unyielding focus on their application to policy-making, as befits the authors’ own practical experience. Advanced Macroeconomics: An Easy Guide is bound to become a great resource for graduate and advanced undergraduate students, and practitioners alike. <details><summary>Click here to read praise for Advanced Macroeconomics</summary> “A tour de force. Presenting modern macro theory rigorously but simply, and showing why it helps understand complex macroeconomic events and macroeconomic policies.” — Olivier Blanchard (Peterson Institute, Professor Emeritus at MIT, and former Chief Economist and Director of Research at the IMF)“This terrifically useful text fills the considerable gap between standard intermediate macroeconomics texts and the more technical text aimed at PhD economics courses. The authors cover the core models of modern macroeconomics with clarity and elegance, filling in details that PhD texts too often leave out. At the same time, the authors draw on their own extensive policy experience to provide thoughtful policy motivation and historical context throughout. Advanced undergraduates, public policy students and indeed many economics PhD students will find it a pleasure to read, and a valuable long-term resource.” — Kenneth Rogoff (Thomas D. Cabot Professor of Public Policy and Professor of Economics at Harvard University, former Chief Economist and Director of Research at the IMF)“This is an excellent and highly rigorous yet accessible guide to fundamental macroeconomic frameworks that underpin research and policy making in the world. The content reflects the unique perspective of authors who have worked at the highest levels of both government and academia. This makes the book essential reading for serious practitioners, students, and researchers.” — Gita Gopinath (John Zwaanstra Professor of International Studies and of Economics at Harvard University, Chief Economist and Director of Research at the IMF)“The words Advanced and Easy rarely belong together, but this book gets as close as possible. It covers macroeconomics from the classic fundamentals to the fancy and creative innovations necessary to anyone interested in keeping up with both the policy and the academic worlds.” — Arminio Fraga (former president, Central Bank of Brazil)</details>20200Supplementary material for this textbook, including slides and DSGE and VAR estimation tutorials, can be found <a target="_blank" href="https://zenodo.org/communities/advanced_macroeconomics?page=1&size=20">here</a>Supported by the LSE Knowledge Exchange and Impact FundMacroeconomic policy is one of the most important policy domains, and the tools of macroeconomics are among the most valuable for policy makers. Yet there has been, up to now, a wide gulf between the level at which macroeconomics is taught at the undergraduate level and the level at which it is practiced. At the same time, doctoral-level textbooks are usually not targeted at a policy audience, making advanced macroeconomics less accessible to current and aspiring practitioners. This book, born out of the Masters course the authors taught for many years at the Harvard Kennedy School, fills this gap. It introduces the tools of dynamic optimization in the context of economic growth, and then applies them to a wide range of policy questions – ranging from pensions, consumption, investment and finance, to the most recent developments in fiscal and monetary policy. It does so with the requisite rigor, but also with a light touch, and an unyielding focus on their application to policy-making, as befits the authors’ own practical experience. Advanced Macroeconomics: An Easy Guide is bound to become a great resource for graduate and advanced undergraduate students, and practitioners alike.30400Introduction Part 1: Growth Theory Growth theory preliminaries The neoclassical growth model An application: The small open economy Endogenous growth models I: Escaping diminishing returns Endogenous growth models II: Technological change Proximate and fundamental causes of growth Part 2: Overlapping Generations Models Overlapping generations models An application: Pension systems and transitions Unified growth theory Part 3: Consumption and Investment Consumption Consumption under uncertainty and macro finance Investment Part 4: Short Term Fluctuations Real business cycles (New) Keynesian theories of fluctuations: A primer Unemployment Part 5: Monetary and Fiscal Policy Fiscal policy I: Public debt and the effectiveness of fiscal policy Fiscal policy II: The long-run determinants of fiscal policy Monetary policy: An introduction Rules vs Discretion Recent debates in monetary policy New developments in monetary and fiscal policy Appendix A: Very brief mathematical appendix Appendix B: Simulating an RBC model Appendix C: Simulating a DSGE model43000Note: Since the many formula in the EPUB and Mobi versions of the book are displayed as images, we recommend using a medium-sized font for reading. Formulae font may not match well with the main text font if very small or very large text font sizes are chosenRead online or download for freeScroll down to open individual chaptersSupplementary material for this textbook, including slides and DSGE and VAR estimation tutorials, can be found <a target="_blank" href="https://zenodo.org/communities/advanced_macroeconomics?page=1&size=20">here</a>Supported by the LSE Knowledge Exchange and Impact FundMacroeconomic policy is one of the most important policy domains, and the tools of macroeconomics are among the most valuable for policy makers. Yet there has been, up to now, a wide gulf between the level at which macroeconomics is taught at the undergraduate level and the level at which it is practiced. At the same time, doctoral-level textbooks are usually not targeted at a policy audience, making advanced macroeconomics less accessible to current and aspiring practitioners. This book, born out of the Masters course the authors taught for many years at the Harvard Kennedy School, fills this gap. It introduces the tools of dynamic optimization in the context of economic growth, and then applies them to a wide range of policy questions – ranging from pensions, consumption, investment and finance, to the most recent developments in fiscal and monetary policy. It does so with the requisite rigor, but also with a light touch, and an unyielding focus on their application to policy-making, as befits the authors’ own practical experience. Advanced Macroeconomics: An Easy Guide is bound to become a great resource for graduate and advanced undergraduate students, and practitioners alike. <details><summary>Click here to read praise for Advanced Macroeconomics</summary> “A tour de force. Presenting modern macro theory rigorously but simply, and showing why it helps understand complex macroeconomic events and macroeconomic policies.” — Olivier Blanchard (Peterson Institute, Professor Emeritus at MIT, and former Chief Economist and Director of Research at the IMF)“This terrifically useful text fills the considerable gap between standard intermediate macroeconomics texts and the more technical text aimed at PhD economics courses. The authors cover the core models of modern macroeconomics with clarity and elegance, filling in details that PhD texts too often leave out. At the same time, the authors draw on their own extensive policy experience to provide thoughtful policy motivation and historical context throughout. Advanced undergraduates, public policy students and indeed many economics PhD students will find it a pleasure to read, and a valuable long-term resource.” — Kenneth Rogoff (Thomas D. Cabot Professor of Public Policy and Professor of Economics at Harvard University, former Chief Economist and Director of Research at the IMF)“This is an excellent and highly rigorous yet accessible guide to fundamental macroeconomic frameworks that underpin research and policy making in the world. The content reflects the unique perspective of authors who have worked at the highest levels of both government and academia. This makes the book essential reading for serious practitioners, students, and researchers.” — Gita Gopinath (John Zwaanstra Professor of International Studies and of Economics at Harvard University, Chief Economist and Director of Research at the IMF)“The words Advanced and Easy rarely belong together, but this book gets as close as possible. It covers macroeconomics from the classic fundamentals to the fancy and creative innovations necessary to anyone interested in keeping up with both the policy and the academic worlds.” — Arminio Fraga (former president, Central Bank of Brazil)</details>52000Open Access01000302https://storage.googleapis.com/rua-lse/files/media/cover_images/71a731aa-e563-46cc-ab9a-38877107db5f.png1030610.31389/lsepress.ame.aCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Introduction1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access2030610.31389/lsepress.ame.1Creative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Part 1: Growth Theory1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access3030610.31389/lsepress.ame.bCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Growth theory preliminaries1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access4030610.31389/lsepress.ame.cCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101The neoclassical growth model1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access5030610.31389/lsepress.ame.dCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101An application: The small open economy1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access6030610.31389/lsepress.ame.eCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Endogenous growth models I: Escaping diminishing returns1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access7030610.31389/lsepress.ame.fCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Endogenous growth models II: Technological change1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access8030610.31389/lsepress.ame.gCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Proximate and fundamental causes of growth1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access9030610.31389/lsepress.ame.2Creative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Part 2: Overlapping Generations Models1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access10030610.31389/lsepress.ame.hCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Overlapping generations models1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access11030610.31389/lsepress.ame.iCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101An application: Pension systems and transitions1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access12030610.31389/lsepress.ame.jCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Unified growth theory1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access13030610.31389/lsepress.ame.3Creative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Part 3: Consumption and Investment1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access14030610.31389/lsepress.ame.kCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Consumption1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access15030610.31389/lsepress.ame.lCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Consumption under uncertainty and macro finance1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access16030610.31389/lsepress.ame.mCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Investment1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access17030610.31389/lsepress.ame.4Creative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Part 4: Short Term Fluctuations1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access18030610.31389/lsepress.ame.nCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Real business cycles1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access19030610.31389/lsepress.ame.oCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101(New) Keynesian theories of fluctuations: A primer1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access20030610.31389/lsepress.ame.pCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Unemployment1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access21030610.31389/lsepress.ame.5Creative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Part 5: Monetary and Fiscal Policy1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access22030610.31389/lsepress.ame.qCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Fiscal policy I: Public debt and the effectiveness of fiscal policy1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access23030610.31389/lsepress.ame.rCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Fiscal policy II: The long-run determinants of fiscal policy1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access24030610.31389/lsepress.ame.sCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Monetary policy: An introduction1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access25030610.31389/lsepress.ame.tCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Rules vs Discretion1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access26030610.31389/lsepress.ame.uCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Recent debates in monetary policy1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access27030610.31389/lsepress.ame.vCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101New developments in monetary and fiscal policy1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access28030610.31389/lsepress.ame.wCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Appendix A: Very brief mathematical appendix1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access29030610.31389/lsepress.ame.xCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Appendix B: Simulating an RBC model1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access30030610.31389/lsepress.ame.yCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Appendix C: Simulating a DSGE model1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access01URLhttps://press.lse.ac.ukLSE Press01LSE Press01Publisher’s corporate websitehttps://press.lse.ac.uk02Publisher’s website for a specified workhttps://press.lse.ac.uk/books/m/10.31389/lsepress.ameLondon040120211011The Author(s)02WORLD061597819098906880615978190989071806159781909890701WORLD11Unknown36Supplier’s website for a specified workhttps://press.lse.ac.uk29Supplier’s website: download the titlehttps://press.lse.ac.uk/books/2/files/1c02f042-52d8-49f6-8986-a97aa90d6a73.pdf20082021101101lse-2-m-15-978190989068803011597819098906880610.31389/lsepress.ame01internal-reference200BCB20210027.5in030.86in081.58lb019.25inCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/0101Advanced MacroeconomicsAn Easy Guide1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng004180323User DefinedMacroeconomics23User DefinedEconomic Theory23User DefinedEconomic Policy23User DefinedEconomics12Advanced macroeconomics12Economic Growth12Economic Fluctuations12Business Cycles12Fiscal and Monetary Policy12Macroeconomic Policy Discussions10BUS03900093KCB010110300Note: Since the many formula in the EPUB and Mobi versions of the book are displayed as images, we recommend using a medium-sized font for reading. Formulae font may not match well with the main text font if very small or very large text font sizes are chosenRead online or download for freeScroll down to open individual chaptersSupplementary material for this textbook, including slides and DSGE and VAR estimation tutorials, can be found <a target="_blank" href="https://zenodo.org/communities/advanced_macroeconomics?page=1&size=20">here</a>Supported by the LSE Knowledge Exchange and Impact FundMacroeconomic policy is one of the most important policy domains, and the tools of macroeconomics are among the most valuable for policy makers. Yet there has been, up to now, a wide gulf between the level at which macroeconomics is taught at the undergraduate level and the level at which it is practiced. At the same time, doctoral-level textbooks are usually not targeted at a policy audience, making advanced macroeconomics less accessible to current and aspiring practitioners. This book, born out of the Masters course the authors taught for many years at the Harvard Kennedy School, fills this gap. It introduces the tools of dynamic optimization in the context of economic growth, and then applies them to a wide range of policy questions – ranging from pensions, consumption, investment and finance, to the most recent developments in fiscal and monetary policy. It does so with the requisite rigor, but also with a light touch, and an unyielding focus on their application to policy-making, as befits the authors’ own practical experience. Advanced Macroeconomics: An Easy Guide is bound to become a great resource for graduate and advanced undergraduate students, and practitioners alike. <details><summary>Click here to read praise for Advanced Macroeconomics</summary> “A tour de force. Presenting modern macro theory rigorously but simply, and showing why it helps understand complex macroeconomic events and macroeconomic policies.” — Olivier Blanchard (Peterson Institute, Professor Emeritus at MIT, and former Chief Economist and Director of Research at the IMF)“This terrifically useful text fills the considerable gap between standard intermediate macroeconomics texts and the more technical text aimed at PhD economics courses. The authors cover the core models of modern macroeconomics with clarity and elegance, filling in details that PhD texts too often leave out. At the same time, the authors draw on their own extensive policy experience to provide thoughtful policy motivation and historical context throughout. Advanced undergraduates, public policy students and indeed many economics PhD students will find it a pleasure to read, and a valuable long-term resource.” — Kenneth Rogoff (Thomas D. Cabot Professor of Public Policy and Professor of Economics at Harvard University, former Chief Economist and Director of Research at the IMF)“This is an excellent and highly rigorous yet accessible guide to fundamental macroeconomic frameworks that underpin research and policy making in the world. The content reflects the unique perspective of authors who have worked at the highest levels of both government and academia. This makes the book essential reading for serious practitioners, students, and researchers.” — Gita Gopinath (John Zwaanstra Professor of International Studies and of Economics at Harvard University, Chief Economist and Director of Research at the IMF)“The words Advanced and Easy rarely belong together, but this book gets as close as possible. It covers macroeconomics from the classic fundamentals to the fancy and creative innovations necessary to anyone interested in keeping up with both the policy and the academic worlds.” — Arminio Fraga (former president, Central Bank of Brazil)</details>20200Supplementary material for this textbook, including slides and DSGE and VAR estimation tutorials, can be found <a target="_blank" href="https://zenodo.org/communities/advanced_macroeconomics?page=1&size=20">here</a>Supported by the LSE Knowledge Exchange and Impact FundMacroeconomic policy is one of the most important policy domains, and the tools of macroeconomics are among the most valuable for policy makers. Yet there has been, up to now, a wide gulf between the level at which macroeconomics is taught at the undergraduate level and the level at which it is practiced. At the same time, doctoral-level textbooks are usually not targeted at a policy audience, making advanced macroeconomics less accessible to current and aspiring practitioners. This book, born out of the Masters course the authors taught for many years at the Harvard Kennedy School, fills this gap. It introduces the tools of dynamic optimization in the context of economic growth, and then applies them to a wide range of policy questions – ranging from pensions, consumption, investment and finance, to the most recent developments in fiscal and monetary policy. It does so with the requisite rigor, but also with a light touch, and an unyielding focus on their application to policy-making, as befits the authors’ own practical experience. Advanced Macroeconomics: An Easy Guide is bound to become a great resource for graduate and advanced undergraduate students, and practitioners alike.30400Introduction Part 1: Growth Theory Growth theory preliminaries The neoclassical growth model An application: The small open economy Endogenous growth models I: Escaping diminishing returns Endogenous growth models II: Technological change Proximate and fundamental causes of growth Part 2: Overlapping Generations Models Overlapping generations models An application: Pension systems and transitions Unified growth theory Part 3: Consumption and Investment Consumption Consumption under uncertainty and macro finance Investment Part 4: Short Term Fluctuations Real business cycles (New) Keynesian theories of fluctuations: A primer Unemployment Part 5: Monetary and Fiscal Policy Fiscal policy I: Public debt and the effectiveness of fiscal policy Fiscal policy II: The long-run determinants of fiscal policy Monetary policy: An introduction Rules vs Discretion Recent debates in monetary policy New developments in monetary and fiscal policy Appendix A: Very brief mathematical appendix Appendix B: Simulating an RBC model Appendix C: Simulating a DSGE model43000Note: Since the many formula in the EPUB and Mobi versions of the book are displayed as images, we recommend using a medium-sized font for reading. Formulae font may not match well with the main text font if very small or very large text font sizes are chosenRead online or download for freeScroll down to open individual chaptersSupplementary material for this textbook, including slides and DSGE and VAR estimation tutorials, can be found <a target="_blank" href="https://zenodo.org/communities/advanced_macroeconomics?page=1&size=20">here</a>Supported by the LSE Knowledge Exchange and Impact FundMacroeconomic policy is one of the most important policy domains, and the tools of macroeconomics are among the most valuable for policy makers. Yet there has been, up to now, a wide gulf between the level at which macroeconomics is taught at the undergraduate level and the level at which it is practiced. At the same time, doctoral-level textbooks are usually not targeted at a policy audience, making advanced macroeconomics less accessible to current and aspiring practitioners. This book, born out of the Masters course the authors taught for many years at the Harvard Kennedy School, fills this gap. It introduces the tools of dynamic optimization in the context of economic growth, and then applies them to a wide range of policy questions – ranging from pensions, consumption, investment and finance, to the most recent developments in fiscal and monetary policy. It does so with the requisite rigor, but also with a light touch, and an unyielding focus on their application to policy-making, as befits the authors’ own practical experience. Advanced Macroeconomics: An Easy Guide is bound to become a great resource for graduate and advanced undergraduate students, and practitioners alike. <details><summary>Click here to read praise for Advanced Macroeconomics</summary> “A tour de force. Presenting modern macro theory rigorously but simply, and showing why it helps understand complex macroeconomic events and macroeconomic policies.” — Olivier Blanchard (Peterson Institute, Professor Emeritus at MIT, and former Chief Economist and Director of Research at the IMF)“This terrifically useful text fills the considerable gap between standard intermediate macroeconomics texts and the more technical text aimed at PhD economics courses. The authors cover the core models of modern macroeconomics with clarity and elegance, filling in details that PhD texts too often leave out. At the same time, the authors draw on their own extensive policy experience to provide thoughtful policy motivation and historical context throughout. Advanced undergraduates, public policy students and indeed many economics PhD students will find it a pleasure to read, and a valuable long-term resource.” — Kenneth Rogoff (Thomas D. Cabot Professor of Public Policy and Professor of Economics at Harvard University, former Chief Economist and Director of Research at the IMF)“This is an excellent and highly rigorous yet accessible guide to fundamental macroeconomic frameworks that underpin research and policy making in the world. The content reflects the unique perspective of authors who have worked at the highest levels of both government and academia. This makes the book essential reading for serious practitioners, students, and researchers.” — Gita Gopinath (John Zwaanstra Professor of International Studies and of Economics at Harvard University, Chief Economist and Director of Research at the IMF)“The words Advanced and Easy rarely belong together, but this book gets as close as possible. It covers macroeconomics from the classic fundamentals to the fancy and creative innovations necessary to anyone interested in keeping up with both the policy and the academic worlds.” — Arminio Fraga (former president, Central Bank of Brazil)</details>52000Open Access01000302https://storage.googleapis.com/rua-lse/files/media/cover_images/71a731aa-e563-46cc-ab9a-38877107db5f.png1030610.31389/lsepress.ame.aCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Introduction1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access2030610.31389/lsepress.ame.1Creative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Part 1: Growth Theory1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access3030610.31389/lsepress.ame.bCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Growth theory preliminaries1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access4030610.31389/lsepress.ame.cCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101The neoclassical growth model1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access5030610.31389/lsepress.ame.dCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101An application: The small open economy1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access6030610.31389/lsepress.ame.eCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Endogenous growth models I: Escaping diminishing returns1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access7030610.31389/lsepress.ame.fCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Endogenous growth models II: Technological change1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access8030610.31389/lsepress.ame.gCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Proximate and fundamental causes of growth1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access9030610.31389/lsepress.ame.2Creative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Part 2: Overlapping Generations Models1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access10030610.31389/lsepress.ame.hCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Overlapping generations models1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access11030610.31389/lsepress.ame.iCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101An application: Pension systems and transitions1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access12030610.31389/lsepress.ame.jCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Unified growth theory1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access13030610.31389/lsepress.ame.3Creative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Part 3: Consumption and Investment1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access14030610.31389/lsepress.ame.kCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Consumption1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access15030610.31389/lsepress.ame.lCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Consumption under uncertainty and macro finance1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access16030610.31389/lsepress.ame.mCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Investment1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access17030610.31389/lsepress.ame.4Creative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Part 4: Short Term Fluctuations1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access18030610.31389/lsepress.ame.nCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Real business cycles1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access19030610.31389/lsepress.ame.oCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101(New) Keynesian theories of fluctuations: A primer1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access20030610.31389/lsepress.ame.pCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Unemployment1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access21030610.31389/lsepress.ame.5Creative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Part 5: Monetary and Fiscal Policy1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access22030610.31389/lsepress.ame.qCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Fiscal policy I: Public debt and the effectiveness of fiscal policy1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access23030610.31389/lsepress.ame.rCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Fiscal policy II: The long-run determinants of fiscal policy1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access24030610.31389/lsepress.ame.sCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Monetary policy: An introduction1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access25030610.31389/lsepress.ame.tCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Rules vs Discretion1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access26030610.31389/lsepress.ame.uCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Recent debates in monetary policy1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access27030610.31389/lsepress.ame.vCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101New developments in monetary and fiscal policy1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access28030610.31389/lsepress.ame.wCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Appendix A: Very brief mathematical appendix1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access29030610.31389/lsepress.ame.xCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Appendix B: Simulating an RBC model1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access30030610.31389/lsepress.ame.yCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Appendix C: Simulating a DSGE model1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access01URLhttps://press.lse.ac.ukLSE Press01LSE Press01Publisher’s corporate websitehttps://press.lse.ac.uk02Publisher’s website for a specified workhttps://press.lse.ac.uk/books/m/10.31389/lsepress.ameLondon040120211011The Author(s)02WORLD061597819098906950615978190989071806159781909890701WORLD11Unknown20082021101108lse-2-m-15-978190989071803011597819098907180610.31389/lsepress.ame01internal-reference200EDE12110Creative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/0101Advanced MacroeconomicsAn Easy Guide1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng004180323User DefinedMacroeconomics23User DefinedEconomic Theory23User DefinedEconomic Policy23User DefinedEconomics12Advanced macroeconomics12Economic Growth12Economic Fluctuations12Business Cycles12Fiscal and Monetary Policy12Macroeconomic Policy Discussions10BUS03900093KCB010110300Note: Since the many formula in the EPUB and Mobi versions of the book are displayed as images, we recommend using a medium-sized font for reading. Formulae font may not match well with the main text font if very small or very large text font sizes are chosenRead online or download for freeScroll down to open individual chaptersSupplementary material for this textbook, including slides and DSGE and VAR estimation tutorials, can be found <a target="_blank" href="https://zenodo.org/communities/advanced_macroeconomics?page=1&size=20">here</a>Supported by the LSE Knowledge Exchange and Impact FundMacroeconomic policy is one of the most important policy domains, and the tools of macroeconomics are among the most valuable for policy makers. Yet there has been, up to now, a wide gulf between the level at which macroeconomics is taught at the undergraduate level and the level at which it is practiced. At the same time, doctoral-level textbooks are usually not targeted at a policy audience, making advanced macroeconomics less accessible to current and aspiring practitioners. This book, born out of the Masters course the authors taught for many years at the Harvard Kennedy School, fills this gap. It introduces the tools of dynamic optimization in the context of economic growth, and then applies them to a wide range of policy questions – ranging from pensions, consumption, investment and finance, to the most recent developments in fiscal and monetary policy. It does so with the requisite rigor, but also with a light touch, and an unyielding focus on their application to policy-making, as befits the authors’ own practical experience. Advanced Macroeconomics: An Easy Guide is bound to become a great resource for graduate and advanced undergraduate students, and practitioners alike. <details><summary>Click here to read praise for Advanced Macroeconomics</summary> “A tour de force. Presenting modern macro theory rigorously but simply, and showing why it helps understand complex macroeconomic events and macroeconomic policies.” — Olivier Blanchard (Peterson Institute, Professor Emeritus at MIT, and former Chief Economist and Director of Research at the IMF)“This terrifically useful text fills the considerable gap between standard intermediate macroeconomics texts and the more technical text aimed at PhD economics courses. The authors cover the core models of modern macroeconomics with clarity and elegance, filling in details that PhD texts too often leave out. At the same time, the authors draw on their own extensive policy experience to provide thoughtful policy motivation and historical context throughout. Advanced undergraduates, public policy students and indeed many economics PhD students will find it a pleasure to read, and a valuable long-term resource.” — Kenneth Rogoff (Thomas D. Cabot Professor of Public Policy and Professor of Economics at Harvard University, former Chief Economist and Director of Research at the IMF)“This is an excellent and highly rigorous yet accessible guide to fundamental macroeconomic frameworks that underpin research and policy making in the world. The content reflects the unique perspective of authors who have worked at the highest levels of both government and academia. This makes the book essential reading for serious practitioners, students, and researchers.” — Gita Gopinath (John Zwaanstra Professor of International Studies and of Economics at Harvard University, Chief Economist and Director of Research at the IMF)“The words Advanced and Easy rarely belong together, but this book gets as close as possible. It covers macroeconomics from the classic fundamentals to the fancy and creative innovations necessary to anyone interested in keeping up with both the policy and the academic worlds.” — Arminio Fraga (former president, Central Bank of Brazil)</details>20200Supplementary material for this textbook, including slides and DSGE and VAR estimation tutorials, can be found <a target="_blank" href="https://zenodo.org/communities/advanced_macroeconomics?page=1&size=20">here</a>Supported by the LSE Knowledge Exchange and Impact FundMacroeconomic policy is one of the most important policy domains, and the tools of macroeconomics are among the most valuable for policy makers. Yet there has been, up to now, a wide gulf between the level at which macroeconomics is taught at the undergraduate level and the level at which it is practiced. At the same time, doctoral-level textbooks are usually not targeted at a policy audience, making advanced macroeconomics less accessible to current and aspiring practitioners. This book, born out of the Masters course the authors taught for many years at the Harvard Kennedy School, fills this gap. It introduces the tools of dynamic optimization in the context of economic growth, and then applies them to a wide range of policy questions – ranging from pensions, consumption, investment and finance, to the most recent developments in fiscal and monetary policy. It does so with the requisite rigor, but also with a light touch, and an unyielding focus on their application to policy-making, as befits the authors’ own practical experience. Advanced Macroeconomics: An Easy Guide is bound to become a great resource for graduate and advanced undergraduate students, and practitioners alike.30400Introduction Part 1: Growth Theory Growth theory preliminaries The neoclassical growth model An application: The small open economy Endogenous growth models I: Escaping diminishing returns Endogenous growth models II: Technological change Proximate and fundamental causes of growth Part 2: Overlapping Generations Models Overlapping generations models An application: Pension systems and transitions Unified growth theory Part 3: Consumption and Investment Consumption Consumption under uncertainty and macro finance Investment Part 4: Short Term Fluctuations Real business cycles (New) Keynesian theories of fluctuations: A primer Unemployment Part 5: Monetary and Fiscal Policy Fiscal policy I: Public debt and the effectiveness of fiscal policy Fiscal policy II: The long-run determinants of fiscal policy Monetary policy: An introduction Rules vs Discretion Recent debates in monetary policy New developments in monetary and fiscal policy Appendix A: Very brief mathematical appendix Appendix B: Simulating an RBC model Appendix C: Simulating a DSGE model43000Note: Since the many formula in the EPUB and Mobi versions of the book are displayed as images, we recommend using a medium-sized font for reading. Formulae font may not match well with the main text font if very small or very large text font sizes are chosenRead online or download for freeScroll down to open individual chaptersSupplementary material for this textbook, including slides and DSGE and VAR estimation tutorials, can be found <a target="_blank" href="https://zenodo.org/communities/advanced_macroeconomics?page=1&size=20">here</a>Supported by the LSE Knowledge Exchange and Impact FundMacroeconomic policy is one of the most important policy domains, and the tools of macroeconomics are among the most valuable for policy makers. Yet there has been, up to now, a wide gulf between the level at which macroeconomics is taught at the undergraduate level and the level at which it is practiced. At the same time, doctoral-level textbooks are usually not targeted at a policy audience, making advanced macroeconomics less accessible to current and aspiring practitioners. This book, born out of the Masters course the authors taught for many years at the Harvard Kennedy School, fills this gap. It introduces the tools of dynamic optimization in the context of economic growth, and then applies them to a wide range of policy questions – ranging from pensions, consumption, investment and finance, to the most recent developments in fiscal and monetary policy. It does so with the requisite rigor, but also with a light touch, and an unyielding focus on their application to policy-making, as befits the authors’ own practical experience. Advanced Macroeconomics: An Easy Guide is bound to become a great resource for graduate and advanced undergraduate students, and practitioners alike. <details><summary>Click here to read praise for Advanced Macroeconomics</summary> “A tour de force. Presenting modern macro theory rigorously but simply, and showing why it helps understand complex macroeconomic events and macroeconomic policies.” — Olivier Blanchard (Peterson Institute, Professor Emeritus at MIT, and former Chief Economist and Director of Research at the IMF)“This terrifically useful text fills the considerable gap between standard intermediate macroeconomics texts and the more technical text aimed at PhD economics courses. The authors cover the core models of modern macroeconomics with clarity and elegance, filling in details that PhD texts too often leave out. At the same time, the authors draw on their own extensive policy experience to provide thoughtful policy motivation and historical context throughout. Advanced undergraduates, public policy students and indeed many economics PhD students will find it a pleasure to read, and a valuable long-term resource.” — Kenneth Rogoff (Thomas D. Cabot Professor of Public Policy and Professor of Economics at Harvard University, former Chief Economist and Director of Research at the IMF)“This is an excellent and highly rigorous yet accessible guide to fundamental macroeconomic frameworks that underpin research and policy making in the world. The content reflects the unique perspective of authors who have worked at the highest levels of both government and academia. This makes the book essential reading for serious practitioners, students, and researchers.” — Gita Gopinath (John Zwaanstra Professor of International Studies and of Economics at Harvard University, Chief Economist and Director of Research at the IMF)“The words Advanced and Easy rarely belong together, but this book gets as close as possible. It covers macroeconomics from the classic fundamentals to the fancy and creative innovations necessary to anyone interested in keeping up with both the policy and the academic worlds.” — Arminio Fraga (former president, Central Bank of Brazil)</details>52000Open Access01000302https://storage.googleapis.com/rua-lse/files/media/cover_images/71a731aa-e563-46cc-ab9a-38877107db5f.png1030610.31389/lsepress.ame.aCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Introduction1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access2030610.31389/lsepress.ame.1Creative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Part 1: Growth Theory1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access3030610.31389/lsepress.ame.bCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Growth theory preliminaries1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access4030610.31389/lsepress.ame.cCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101The neoclassical growth model1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access5030610.31389/lsepress.ame.dCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101An application: The small open economy1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access6030610.31389/lsepress.ame.eCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Endogenous growth models I: Escaping diminishing returns1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access7030610.31389/lsepress.ame.fCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Endogenous growth models II: Technological change1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access8030610.31389/lsepress.ame.gCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Proximate and fundamental causes of growth1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access9030610.31389/lsepress.ame.2Creative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Part 2: Overlapping Generations Models1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access10030610.31389/lsepress.ame.hCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Overlapping generations models1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access11030610.31389/lsepress.ame.iCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101An application: Pension systems and transitions1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access12030610.31389/lsepress.ame.jCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Unified growth theory1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access13030610.31389/lsepress.ame.3Creative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Part 3: Consumption and Investment1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access14030610.31389/lsepress.ame.kCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Consumption1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access15030610.31389/lsepress.ame.lCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Consumption under uncertainty and macro finance1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access16030610.31389/lsepress.ame.mCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Investment1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access17030610.31389/lsepress.ame.4Creative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Part 4: Short Term Fluctuations1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access18030610.31389/lsepress.ame.nCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Real business cycles1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access19030610.31389/lsepress.ame.oCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101(New) Keynesian theories of fluctuations: A primer1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access20030610.31389/lsepress.ame.pCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Unemployment1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access21030610.31389/lsepress.ame.5Creative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Part 5: Monetary and Fiscal Policy1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access22030610.31389/lsepress.ame.qCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Fiscal policy I: Public debt and the effectiveness of fiscal policy1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access23030610.31389/lsepress.ame.rCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Fiscal policy II: The long-run determinants of fiscal policy1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access24030610.31389/lsepress.ame.sCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Monetary policy: An introduction1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access25030610.31389/lsepress.ame.tCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Rules vs Discretion1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access26030610.31389/lsepress.ame.uCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Recent debates in monetary policy1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access27030610.31389/lsepress.ame.vCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101New developments in monetary and fiscal policy1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access28030610.31389/lsepress.ame.wCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Appendix A: Very brief mathematical appendix1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access29030610.31389/lsepress.ame.xCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Appendix B: Simulating an RBC model1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access30030610.31389/lsepress.ame.yCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Appendix C: Simulating a DSGE model1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access01URLhttps://press.lse.ac.ukLSE Press01LSE Press01Publisher’s corporate websitehttps://press.lse.ac.uk02Publisher’s website for a specified workhttps://press.lse.ac.uk/books/m/10.31389/lsepress.ameLondon040120211011The Author(s)02WORLD061597819098906950615978190989068806159781909890701WORLD11Unknown36Supplier’s website for a specified workhttps://press.lse.ac.uk29Supplier’s website: download the titlehttps://press.lse.ac.uk/books/2/files/aab19bc1-be95-4c3a-8fc3-61b8d30b4394.mobi20082021101101lse-2-m-15-978190989070103011597819098907010610.31389/lsepress.ame01internal-reference200EBE10110Creative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/0101Advanced MacroeconomicsAn Easy Guide1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng004180323User DefinedMacroeconomics23User DefinedEconomic Theory23User DefinedEconomic Policy23User DefinedEconomics12Advanced macroeconomics12Economic Growth12Economic Fluctuations12Business Cycles12Fiscal and Monetary Policy12Macroeconomic Policy Discussions10BUS03900093KCB010110300Note: Since the many formula in the EPUB and Mobi versions of the book are displayed as images, we recommend using a medium-sized font for reading. Formulae font may not match well with the main text font if very small or very large text font sizes are chosenRead online or download for freeScroll down to open individual chaptersSupplementary material for this textbook, including slides and DSGE and VAR estimation tutorials, can be found <a target="_blank" href="https://zenodo.org/communities/advanced_macroeconomics?page=1&size=20">here</a>Supported by the LSE Knowledge Exchange and Impact FundMacroeconomic policy is one of the most important policy domains, and the tools of macroeconomics are among the most valuable for policy makers. Yet there has been, up to now, a wide gulf between the level at which macroeconomics is taught at the undergraduate level and the level at which it is practiced. At the same time, doctoral-level textbooks are usually not targeted at a policy audience, making advanced macroeconomics less accessible to current and aspiring practitioners. This book, born out of the Masters course the authors taught for many years at the Harvard Kennedy School, fills this gap. It introduces the tools of dynamic optimization in the context of economic growth, and then applies them to a wide range of policy questions – ranging from pensions, consumption, investment and finance, to the most recent developments in fiscal and monetary policy. It does so with the requisite rigor, but also with a light touch, and an unyielding focus on their application to policy-making, as befits the authors’ own practical experience. Advanced Macroeconomics: An Easy Guide is bound to become a great resource for graduate and advanced undergraduate students, and practitioners alike. <details><summary>Click here to read praise for Advanced Macroeconomics</summary> “A tour de force. Presenting modern macro theory rigorously but simply, and showing why it helps understand complex macroeconomic events and macroeconomic policies.” — Olivier Blanchard (Peterson Institute, Professor Emeritus at MIT, and former Chief Economist and Director of Research at the IMF)“This terrifically useful text fills the considerable gap between standard intermediate macroeconomics texts and the more technical text aimed at PhD economics courses. The authors cover the core models of modern macroeconomics with clarity and elegance, filling in details that PhD texts too often leave out. At the same time, the authors draw on their own extensive policy experience to provide thoughtful policy motivation and historical context throughout. Advanced undergraduates, public policy students and indeed many economics PhD students will find it a pleasure to read, and a valuable long-term resource.” — Kenneth Rogoff (Thomas D. Cabot Professor of Public Policy and Professor of Economics at Harvard University, former Chief Economist and Director of Research at the IMF)“This is an excellent and highly rigorous yet accessible guide to fundamental macroeconomic frameworks that underpin research and policy making in the world. The content reflects the unique perspective of authors who have worked at the highest levels of both government and academia. This makes the book essential reading for serious practitioners, students, and researchers.” — Gita Gopinath (John Zwaanstra Professor of International Studies and of Economics at Harvard University, Chief Economist and Director of Research at the IMF)“The words Advanced and Easy rarely belong together, but this book gets as close as possible. It covers macroeconomics from the classic fundamentals to the fancy and creative innovations necessary to anyone interested in keeping up with both the policy and the academic worlds.” — Arminio Fraga (former president, Central Bank of Brazil)</details>20200Supplementary material for this textbook, including slides and DSGE and VAR estimation tutorials, can be found <a target="_blank" href="https://zenodo.org/communities/advanced_macroeconomics?page=1&size=20">here</a>Supported by the LSE Knowledge Exchange and Impact FundMacroeconomic policy is one of the most important policy domains, and the tools of macroeconomics are among the most valuable for policy makers. Yet there has been, up to now, a wide gulf between the level at which macroeconomics is taught at the undergraduate level and the level at which it is practiced. At the same time, doctoral-level textbooks are usually not targeted at a policy audience, making advanced macroeconomics less accessible to current and aspiring practitioners. This book, born out of the Masters course the authors taught for many years at the Harvard Kennedy School, fills this gap. It introduces the tools of dynamic optimization in the context of economic growth, and then applies them to a wide range of policy questions – ranging from pensions, consumption, investment and finance, to the most recent developments in fiscal and monetary policy. It does so with the requisite rigor, but also with a light touch, and an unyielding focus on their application to policy-making, as befits the authors’ own practical experience. Advanced Macroeconomics: An Easy Guide is bound to become a great resource for graduate and advanced undergraduate students, and practitioners alike.30400Introduction Part 1: Growth Theory Growth theory preliminaries The neoclassical growth model An application: The small open economy Endogenous growth models I: Escaping diminishing returns Endogenous growth models II: Technological change Proximate and fundamental causes of growth Part 2: Overlapping Generations Models Overlapping generations models An application: Pension systems and transitions Unified growth theory Part 3: Consumption and Investment Consumption Consumption under uncertainty and macro finance Investment Part 4: Short Term Fluctuations Real business cycles (New) Keynesian theories of fluctuations: A primer Unemployment Part 5: Monetary and Fiscal Policy Fiscal policy I: Public debt and the effectiveness of fiscal policy Fiscal policy II: The long-run determinants of fiscal policy Monetary policy: An introduction Rules vs Discretion Recent debates in monetary policy New developments in monetary and fiscal policy Appendix A: Very brief mathematical appendix Appendix B: Simulating an RBC model Appendix C: Simulating a DSGE model43000Note: Since the many formula in the EPUB and Mobi versions of the book are displayed as images, we recommend using a medium-sized font for reading. Formulae font may not match well with the main text font if very small or very large text font sizes are chosenRead online or download for freeScroll down to open individual chaptersSupplementary material for this textbook, including slides and DSGE and VAR estimation tutorials, can be found <a target="_blank" href="https://zenodo.org/communities/advanced_macroeconomics?page=1&size=20">here</a>Supported by the LSE Knowledge Exchange and Impact FundMacroeconomic policy is one of the most important policy domains, and the tools of macroeconomics are among the most valuable for policy makers. Yet there has been, up to now, a wide gulf between the level at which macroeconomics is taught at the undergraduate level and the level at which it is practiced. At the same time, doctoral-level textbooks are usually not targeted at a policy audience, making advanced macroeconomics less accessible to current and aspiring practitioners. This book, born out of the Masters course the authors taught for many years at the Harvard Kennedy School, fills this gap. It introduces the tools of dynamic optimization in the context of economic growth, and then applies them to a wide range of policy questions – ranging from pensions, consumption, investment and finance, to the most recent developments in fiscal and monetary policy. It does so with the requisite rigor, but also with a light touch, and an unyielding focus on their application to policy-making, as befits the authors’ own practical experience. Advanced Macroeconomics: An Easy Guide is bound to become a great resource for graduate and advanced undergraduate students, and practitioners alike. <details><summary>Click here to read praise for Advanced Macroeconomics</summary> “A tour de force. Presenting modern macro theory rigorously but simply, and showing why it helps understand complex macroeconomic events and macroeconomic policies.” — Olivier Blanchard (Peterson Institute, Professor Emeritus at MIT, and former Chief Economist and Director of Research at the IMF)“This terrifically useful text fills the considerable gap between standard intermediate macroeconomics texts and the more technical text aimed at PhD economics courses. The authors cover the core models of modern macroeconomics with clarity and elegance, filling in details that PhD texts too often leave out. At the same time, the authors draw on their own extensive policy experience to provide thoughtful policy motivation and historical context throughout. Advanced undergraduates, public policy students and indeed many economics PhD students will find it a pleasure to read, and a valuable long-term resource.” — Kenneth Rogoff (Thomas D. Cabot Professor of Public Policy and Professor of Economics at Harvard University, former Chief Economist and Director of Research at the IMF)“This is an excellent and highly rigorous yet accessible guide to fundamental macroeconomic frameworks that underpin research and policy making in the world. The content reflects the unique perspective of authors who have worked at the highest levels of both government and academia. This makes the book essential reading for serious practitioners, students, and researchers.” — Gita Gopinath (John Zwaanstra Professor of International Studies and of Economics at Harvard University, Chief Economist and Director of Research at the IMF)“The words Advanced and Easy rarely belong together, but this book gets as close as possible. It covers macroeconomics from the classic fundamentals to the fancy and creative innovations necessary to anyone interested in keeping up with both the policy and the academic worlds.” — Arminio Fraga (former president, Central Bank of Brazil)</details>52000Open Access01000302https://storage.googleapis.com/rua-lse/files/media/cover_images/71a731aa-e563-46cc-ab9a-38877107db5f.png1030610.31389/lsepress.ame.aCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Introduction1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access2030610.31389/lsepress.ame.1Creative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Part 1: Growth Theory1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access3030610.31389/lsepress.ame.bCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Growth theory preliminaries1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access4030610.31389/lsepress.ame.cCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101The neoclassical growth model1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access5030610.31389/lsepress.ame.dCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101An application: The small open economy1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access6030610.31389/lsepress.ame.eCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Endogenous growth models I: Escaping diminishing returns1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access7030610.31389/lsepress.ame.fCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Endogenous growth models II: Technological change1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access8030610.31389/lsepress.ame.gCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Proximate and fundamental causes of growth1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access9030610.31389/lsepress.ame.2Creative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Part 2: Overlapping Generations Models1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access10030610.31389/lsepress.ame.hCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Overlapping generations models1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access11030610.31389/lsepress.ame.iCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101An application: Pension systems and transitions1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access12030610.31389/lsepress.ame.jCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Unified growth theory1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access13030610.31389/lsepress.ame.3Creative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Part 3: Consumption and Investment1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access14030610.31389/lsepress.ame.kCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Consumption1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access15030610.31389/lsepress.ame.lCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Consumption under uncertainty and macro finance1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access16030610.31389/lsepress.ame.mCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Investment1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access17030610.31389/lsepress.ame.4Creative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Part 4: Short Term Fluctuations1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access18030610.31389/lsepress.ame.nCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Real business cycles1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access19030610.31389/lsepress.ame.oCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101(New) Keynesian theories of fluctuations: A primer1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access20030610.31389/lsepress.ame.pCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Unemployment1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access21030610.31389/lsepress.ame.5Creative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Part 5: Monetary and Fiscal Policy1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access22030610.31389/lsepress.ame.qCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Fiscal policy I: Public debt and the effectiveness of fiscal policy1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access23030610.31389/lsepress.ame.rCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Fiscal policy II: The long-run determinants of fiscal policy1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access24030610.31389/lsepress.ame.sCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Monetary policy: An introduction1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access25030610.31389/lsepress.ame.tCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Rules vs Discretion1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access26030610.31389/lsepress.ame.uCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Recent debates in monetary policy1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access27030610.31389/lsepress.ame.vCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101New developments in monetary and fiscal policy1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access28030610.31389/lsepress.ame.wCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Appendix A: Very brief mathematical appendix1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access29030610.31389/lsepress.ame.xCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Appendix B: Simulating an RBC model1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access30030610.31389/lsepress.ame.yCreative Commons Attribution-NonCommercial (CC BY-NC)02http://creativecommons.org/licenses/by-nc/4.0/Chapter0101Appendix C: Simulating a DSGE model1A01Filipe CampanteFilipeCampanteJohns Hopkins UniversityFilipe Campante is Bloomberg Distinguished Associate Professor of International Economics at Johns Hopkins University and a Research Associate at the National Bureau of Economic Research (NBER). His work focuses on political economy and economic development, and has been published in leading academic journals such as the American Economic Review and the Quarterly Journal of Economics. He was previously Associate Professor of Public Policy at the Harvard Kennedy School, where he taught macroeconomics for many years. Born and raised in Rio de Janeiro, Brazil, he holds a Ph.D. in Economics from Harvard University.2A01Federico SturzeneggerFedericoSturzeneggerUniversidad de San AndrésFederico Sturzenegger is Full Professor at Universidad de San Andrés, Visiting Professor at Harvard’s Kennedy School, and Honoris Causa Professor at HEC, Paris. His work focuses on macroeconomics and international finance and has been published in leading academic journals such as the American Economic Review and the Journal of Economic Literature. He was previously President of Banco Ciudad, a representative in Argentina’s National Congress, and served as Governor of the Central Bank of Argentina. Born and raised in Argentina, he holds a Ph.D. in Economics from MIT.3A01210000-0003-0441-5062Andrés VelascoAndrésVelascoLondon School of Economics and Political ScienceAndrés Velasco is Professor of Public Policy and Dean of the School of Public Policy at the London School of Economics. He is also a Research Fellow of CEPR and an Associate Fellow at Chatham House, the Royal Institute of International Affairs. Earlier he held professorial roles at the Harvard Kennedy School, Columbia University and New York University. He served as the Minister of Finance of Chile between 2006 and 2010. In 2017-18 he was a member of the G20 Eminent Persons Group on Global Financial Governance. He holds a B.A. and an M.A. from Yale University and a Ph.D. in economics from Columbia University01eng12000Open Access01URLhttps://press.lse.ac.ukLSE Press01LSE Press01Publisher’s corporate websitehttps://press.lse.ac.uk02Publisher’s website for a specified workhttps://press.lse.ac.uk/books/m/10.31389/lsepress.ameLondon040120211011The Author(s)02WORLD061597819098906950615978190989068806159781909890718WORLD11Unknown36Supplier’s website for a specified workhttps://press.lse.ac.uk29Supplier’s website: download the titlehttps://press.lse.ac.uk/books/2/files/6ce0728f-48b6-4a69-88da-f065e2ef0c92.epub20082021101101