Course ObjectiveAcademic and Research Skills:
The students will be able to actively read current literature and
embark on their own research projects using the knowledge gained about
the analytical, mathematical, and statistical tools of modern dynamic
macroeconomics. The tools include dynamic optimization, Nash bargaining,
and the basic building blocks of DSGE
Bridging theory and practice -Knowledge:
models. We will discuss the current big issues like: How can
small shocks lead to a large crisis? What can we do to prevent a big
recession (bank regulation, capital requirments). What drives income
Bridging theory and practice -Application:
Learning how to tweak and combine toy-models to real-life events. For
example, use Akerlof's lemon model to explain why during a crisis, banks
stop providing loans to each other.
Broadening your horizon:
Learn the limitations of macro. One of the key questions is how much the
government should stimulate the economy in recessions. Students should
learn to be modest when answering this question because of lack of
exogenous variation in government expenditure
Course ContentThis course provides coverage at an advanced level of the building
blocks of macroeconomics. Models of economic growth will be built up
from intertemporal optimization decisions of firms and households.
Special attention is given to the distribution of income. Next,
the course will present the basic tools of Real Business Cycle and New
models. We also consider modern theories of financial crises and pay a
lot of attention to the recent financial and euro crisis. Then, we will
consider equilibrium search models which form the core of macro labor.
Finally, we discuss budget deficits and Ricardian equivalence plus new
political economy models where the behavior of policy makers are part of
Teaching Methodslectures and tutorials
Method of Assessmentwritten interim examination
plus problem sets.
Entry RequirementsKnowledge of calculus and intermediary macro.
LiteratureHobijn B. Reader NYU.
Romer, David Advanced Macro Economics. 3rd edition, McGraw Hill.
Target AudienceMsc students
Recommended background knowledgeBasic knowledge of calculus and undergraduate macro
|Language of Tuition||English|
|Faculty||School of Business and Economics|
|Course Coordinator||prof. dr. P.A. Gautier|
|Examiner||prof. dr. P.A. Gautier|
dr. W. Zant
prof. dr. P.A. Gautier
You need to register for this course yourself
Last-minute registration is available for this course.
|Teaching Methods||Lecture, Study Group|
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