Checking date: 15/07/2020

Course: 2020/2021

Macroeconomics II
Study: Master in Economic Analysis (68)

Coordinating teacher: KREDLER , MATTHIAS

Department assigned to the subject: Department of Economics

Type: Compulsory
ECTS Credits: 9.0 ECTS


Students are expected to have completed
Macroeconomics I Microeconomics I Mathematics I
Competences and skills that will be acquired and learning results.
This course equips students with the necessary tools to understand and write scientific articles in modern macroeconomics. Specifically, the students gets acquainted with 1. the non-stochastic and stochastic versions of the neoclassical growth model and the consumption-savings problem, two of the main workhorses of modern macroeconomics, 2. dynamic programming, a powerful tool for solving dynamic optimization problems, 3. a set of models that are important in modern macroeconomic theory (cyclical fluctuations; the New-Keynesian model, and the search-and-matching model).
Description of contents: programme
Content common to all courses: Dynamic general equilibrium models. Growth models. Business-cycle models. Uncertainty. Complete and incomplete markets. Market imperfections. Credit constraints. Search-and-matching models. Price rigidities. Heterogeneous agents. Income and wealth inequality. Computation, simulation, calibration and estimation of models. Fiscal policy. Monetary policy. Public debt. Open-economy models. International trade. Financial crises. Sovereign risk. We will closely follow the recent progress in macroeconomic theory and evidence. Content specific to this course: MACROECONOMICS II 1. Dynamic programming: finite and infinite horizon, application to the growth model, comparison to the Lagrangian approach of solving the infinite-horizon problem. 2. Dynamic programming under uncertainty: the stochastic growth model, Markov chains, recursive competitive equilibrium, continuous-time dynamic programming. 3. Cyclical fluctuations: real-business-cycle model, solving the model by linearization, connection to vector-autoregressive (VAR) models, computation by Dynare. 4. Monetary policy: nominal rigidities, the New-Keynesian model, monetary policy. 5. Search-and-matching models for labor markets: the Mortensen-Pissarides model, efficiency, the Hosios condition.
Learning activities and methodology
Learning activities: Theory class Practical class Teamwork Individual study by student Office hours Methodology: In the theory class, the professor develops the theory for the subject. Bibliography is given to students to complement the learning process. Reading texts given by the professor. Solving problems given by the professor (on paper or programming on the computer), in groups or individually.
Assessment System
  • % end-of-term-examination 50
  • % of continuous assessment (assigments, laboratory, practicals...) 50
Basic Bibliography
  • L. Ljunqvist & T. Sargent. Recursive Macroeconomic Theory. MIT Press. 2004
  • Stokey & Lucas (with Prescott). Recursive Methods in Economic Dynamics. Harvard University Press. 1989
Recursos electrónicosElectronic Resources *
Additional Bibliography
  • Christopher Pissarides. Equilibrium Unemployment Theory. MIT Press. 2000
  • Jordi Gali. Monetary Policy, Inflation, and the Business Cycle. Princeton University Press. 2008
  • R. Sundaram. A First Course in Optimization Theory. Cambridge University Press. 1996
Detailed subject contents or complementary information about assessment system of B.T.
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The course syllabus and the academic weekly planning may change due academic events or other reasons.

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