In part I (methods) we provide a rigorous introduction to dynamic problems in economics that combines the tools of dynamic programming with numerical techniques. The aim is to offer an integrated framework for studying applied problems in macroeconomics. We first review the formal theory of dynamic optimization; we then present the numerical tools necessary to evaluate the theoretical models. We then cover growth, real business cycle models, consumption theory and asset pricing. In tutorial classes, students are introduced to Matlab which is used to solve and simulate the economic models. In part II (topics) we cover a set of major topics in macroeconomics, including the study of stochastic growth, optimal monetary policy, consumption theory with endogenous incomplete markets, and the role of institutional features on dynamic choices.
At the end of the course, students should:
- Understand the formulation of dynamic recursive economic models in a way allowing application to empirical data
- Understand the numerical methods used to solve these models
- Be able to actually implement these models on concrete economic problems
- Master some of the most relevant dynamic models in macroeconomics, such as dynamic general equilibrium models of business cycle, models of consumption and of optimal taxation, and be familiar with the related literature
|Taught by:||Franck Portier, Ralph Luetticke, Morten Ravn, Vincent Sterk|
|Moodle page:||ECON0107 - Macroeconomics|