This is a graduate course in macroeconomic theory. It introduces to the key building blocks of modern macroeconomic theory using recursive methods. The course looks at both real economies and monetary economies and at economic policy as well as positive aspects of macroeconomics. Students will be solving problem sets in the tutorial classes.
At the end of the course, students should be familiar with the following topics: Determination of income in the long run; the Ramsey model; intertemporal optimization and general equilibrium; welfare theorems; dynamic programming; Euler equations; consumption theory and labor supply in general equilibrium; business cycle fluctuations; Dynamic stochastic general equilibrium models; temporary equilibrium and price level determination; Overlapping generations; macroeconomic models of asset pricing; inflation and nominal rigidities; basic models of monetary policy.
Three hours of lectures per week, one practical demonstration lecture, and one weekly tutorial class throughout Term 1. Three hours closed-book exam at the end of Term 3. Assessment is made solely on the basis of the exam but problem sets are essential in gaining a good understanding of the material.
Economics Department Approval