The course teaches dynamic general equilibrium theory, which is the framework used in modern macroeconomic analysis. The course introduce concepts, tools and results of modern macroeconomic theory.
1. Dynamic General Equilibrium Theory: introduction to dynamic optimization, competitive equilibrium, Arrow-Debreu market structure, competitive equilibrium with sequential markets, welfare theorems.
2. The neoclassical growth theory: competitive equilibrium, stationary equilibrium, calibration, dynamics, effects of taxes and public expenditures, debt, Ricardian Equivalence, the neoclassical model in continuous time.
3. Overlapping generation models: multiplicity of equilibrium, efficiency, money, capital accumulation and the possibility of dynamic inefficiency, social security, government debt, Ricardian Equivalence.
4. Uncertainty: complete markets, consumption and risk, asset pricing, Arrow Securities, risk premium, pricing of options.
5. Money: introduction to monetary models, monetary policy and inflation, Fridman rule.
6. Ramsey Taxation: implementation, optimal taxation, time consistent policies, taxation over time.