In addition to Chapter 4 in Romer's book the articles by Kydland and Prescott, Cole and Ohanian, Cooley, Li and Harltley et al will be relevant for the lecture on Friday. A good place to start may be the article by Cole and Ohanian, perhaps followed by Li (don't get stuck in technicalities in the last part). (The lecture should be possible to follow even if you havn't read any of these articles yet). The lecture on Monday will draw on the same material and on a basic knowledge of standard keynesian models, either from undergraduate macro or from ch. 5 in Romer.