What should a macroeconomic practitioner study?
I was talking to a friend about if we could go back in time and structure what we studied, what would our course structure look like. Here is what I came up with.
Microeconomics: partial equilibrium, general equilibrium in perfect competition, externalities – using graphs, no algebra.
Statistics: probability theory, samples, hypothesis testing.
Maths: matrix algebra, calculus.
Echonomic history: global economic history from the 19th century – narrative, not analytical.
Macroeconomics: macro concepts, difference between short and long run, policy issues.
Econometrics: OLS, its problems, IV estimates.
History of thought: classical, neoclassical, Keynesian, and modern ideas.
Ethics: moral philosophy, applications such as corporate social responsibility, discrimination, affirmative action.
Microeconomics: producer and consumer problems, partial equilibrium, market structure, general equilibrium, welfare theorems – using algebra.
Maths: differential calculus, set theory etc.
Finance: CAPM, term structure etc – using algebra.
Public policy: public goods, externalities, competion, tax.
Macroeconomics: Mundell-Fleming model, exchange rate regimes, theories of unemployment, inflation targetting.
Macroeconometrics: time series, lags, ECM, VAR, VECM, S-VARS.
Growth: Solow, Ramsey, Romer, Schumpetarian models – focus on the intuition than algebra.
Economic history: global history since the beginning of the 20th century – analytical.
Industrial organisation: game theory, oligopoly, monopoly, principal-agent problems, auction theory, information economics.
Development: missing markets, institution designs, empirics.
Trade: Ricardian, Heckscher-Ohlin, Krugman-Dixit, policy.
Labour market: unemployment, participation, education, inequality.
Business cycle: RBC, New Keynesian models, political business cycle, fiscal policy.
International finance: open economy Solow model, current account, Arrow-Debreu.
Monetary: inflation, exchange rate, monetary policy.
Forecasting: univariate and multivariate forecasting techniques.
International Finance: complete Obstfeld-Rogoff.
Growth theory: Mankiw-Romer-Veil, Romer, Schumpetarian models.
Economic history: regional economic history since World War II.
Essay: on a major policy issue.
Macroeconomics: recursive methods.
Growth policy: empirics, policy, institutions, reforms.
Macro modelling: primarily DSGE models.
How long will this take? At least 4 years if you study nothing else. And of course you should study other things: liberal humanities – anthropology, sociology, history, politics - would be my pick. All added up, we’re looking at 6 years or so. That’s long enough to get a Master degree anywhere in the world.
What could you do with the above? You could work as a macroeconomist in central banks, finance ministries, investment banks or multilateral institutions. If you are lucky, someday you can be a technocratic prime minister.
Of course you could join the army and train yourself to be a coupmaker someday.