Macroeconomics I, Macroeconomics II

The objective of the course is to introduce the modeling of heterogeneous agent economies, learn about economies with incomplete markets and uninsurable idiosyncratic and/or aggregate risk. In the first part of the course, the student will familiarize with a few highly influential dynamic stochastic general equilibrium models and their solution methods. This module of the course will introduce students to Dynare and Julia platforms. The second model of the course will have a more structural focus zooming into different forms of incomplete market models with heterogenous agents. The typical agents in the models seen in this module of the course will be households or workers, but we will also see models of heterogeneous firms or countries. Students will learn how to characterize the stationary equilibrium in these economies and review some of the numerical methods used to solve heterogeneous agent economies with incomplete markets.

1. The neoclassical growth model with heterogeneous agents 2. Stylized facts on inequality 3. The importance of uninsurable idiosyncratic shocks and precautionary savings 4. Introduction: basic concepts on numerical solutions 5. Firm Dynamics 6. Models with Default 7. Being smart in Matlab 8. Revisiting the household problem 9. Job search models and law of one price 10. Life-cycle structure 11. Parameterization 12. Heterogeneity and aggregate risk 13. RBC and New-Keynesian

Each week, we have two lectures of 1.5 hours and one exercise session of 1.5 hours. The lectures will introduce the theory and concepts related to each subject. To deepen their understanding of the material, students are expected to do assignments each week, which will be discussed in the exercise sessions. Assignments will be numerical, where the students will use Dynare and Julia.