Checking date: 04/06/2021

Course: 2021/2022

Macroeconomics I
Study: Master in Economic Analysis (68)

Coordinating teacher: EROSA ETCHEBEHERE, ANDRES

Department assigned to the subject: Department of Economics

Type: Compulsory
ECTS Credits: 9.0 ECTS


Requirements (Subjects that are assumed to be known)
Intro to Statistics and Mathematics
Basic Skills Develop knowledge that is the basis for developing new knowledge, often in a research context. Students should be able to apply the concepts learn to new problems and to new areas of knowledge that are related to area of study of the student. Students should be able to integrate diverse concepts and confront new realities and be able to judge ethical aspects when applying the concepts learned. Students should be able to communicate results and knowledge to the general public and to specialized audiences in a clear and unambiguous fashion. Students should acquire the ability for independent learning. General Skills To analyze and summarize a scientific text. To interpret and elaborate advanced studies in economics. To apply advance knowledge in economics, mathematics, and econometrics. To evaluate scientific articles. To prepare and present scientific documents. To identify key conventions in sciences and, in particular, economics. To identify the value added by a scientific contribution. Specific Skills To apply and understand dynamic general equilibrium theory To apply and understand the neoclassical growth model To apply and understand overlapping generations models To describe and analyze consumption decisions under uncertainty To apply and understand asset pricing models To understand and analyze the role of money and inflation in general equilibrium models To understand the basic real business cycle model To understand and evaluate alternative public polices and their macroeconomic consequences. Learning results 1. Understand and solve dynamic general equilibrium models that are the bases of modern macroeconomic theory. 2. Learn to develop dynamic macroeconomic models. 3. Understand the workhorse models of modern macroeconomic theory: neoclassical growth model, models of consumption-savings, overlapping generations models. 4. Develop the ability to use dynamic general equilibrium models to analyze economic growth, effects of aggregate shocks as well as the consequences of market imperfections for the behavior of the economy. 5. To develop the ability to formulate and solve dynamic models with uncertainty. 6. To understand and apply asset pricing theory in economies with aggregate uncertainty. 7. Estimation-calibration of macroeconomic models. 8. Study counterfactuals using quantitative macro models. 9. Develop the ability to evaluate monetary and fiscal policies.
Skills and learning outcomes
Description of contents: programme
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.
Learning activities and methodology
Learning activities Theory class Recitation Group assignments Individual assignments Reading assignments and class discussions Office hours Methodology Lectures with slides in which the professor teaches basic concepts, distribute assignments, and presents the readings necessary to complement the class activities. Critical readings of the material presented by the professor: newspaper articles, reports, class notes, academic articles. Analysis of practical cases and problem solving of exercises provided in class to be solved individually or in teams. Presentation and discussion in class of topics related to the course as well as discussion of practical cases. Individual or team assignments.
Assessment System
  • % end-of-term-examination 50
  • % of continuous assessment (assigments, laboratory, practicals...) 50
Calendar of Continuous assessment
Basic Bibliography
  • L. Ljungqvist and T.J. Sargent. Recursive Macroeconomic Theory. MIT press. 2004
  • ROMER, DAVID. Advanced Macroeconomics. Mc Graw Hill. 2012
  • T.F. Cooley. Frontiers of Business Cycle Research. Princeton University Press. 1995
Additional Bibliography
  • D. Krueger. Macroeconomic Theory. mimeo University of Pennsylvania. 2011
Detailed subject contents or complementary information about assessment system of B.T.

The course syllabus and the academic weekly planning may change due academic events or other reasons.