Students are expected to have completed: Microeconomics, Mathematics for Economics II, Microeconomic Theory (Since all models studied in this course are "micro-founded", i.e. based on agents solving explicit maximization problems, it is essential that students are familiar with solving consumers'/firms' problems and solving for general equilibrium.)

To acquire knowledge and comprehension for: - the dynamic nature of economic decisions. - Solving dynamic consumption-savings problems. - Solving a general-equilibrium model and comparing it to the efficient allocation (planner's problem). - Solving a model numerically on the computer. - Solving an overlapping-generations model with a pay-as-you-go pension system. - Solving a simple model of search and matching. Transferable aims: - To increase the capacity to deal with abstract concepts. - To improve the ability to formalize theoretically an economic problem. - To acquire agility in solving practical problems. - To foster teamwork ability. - To be able to perform critical analysis of arguments and theories. - To improve oral and written communication.

1. Stylized facts on macroeconomic variables over the business cycle 2. Consumption-leisure decision 3. Credit markets: Inter-temporal consumption-savings decision 4. Real business cycles: Investment in overlapping-generations models 5. Government policy in the OLG model: Fiscal policy and pension systems 6. Unemployment: Search-and-matching model

Theory classes: In the theory classes (clases magistrales) students will be taught the theory and tools that are necessary to solve the problem sets. Exercise classes: In the exercise classes (clases reducidas) students will solve the problem sets that were assigned to you in the week previous to the exercise class. The problem sets have to be handed in to the professor of the exercise class. Students are expected to participate actively en class, which will be reflected in the class-participation grade. There will be three quizzes during the semester with questions about the problems that have been solved in the previous exercise classes.