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:
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.