Advanced Macroeconomics I : Intertemporal Behavior and Business Cycles

Teacher(s)

Pensieroso Luca; Rannenberg Ansgar-Romero (compensates Pensieroso Luca);

Language

English

Prerequisites

LECON2021 Fluctuations économiques et fondements de la politique macro (or similar)

Main themes

The course covers the analysis important areas of macroeconomics through the lens of dynamic theoretical models which form the analytical core of the frameworks used in research and policymaking.

Learning outcomes

At the end of this learning unit, the student is able to :
1	At the end of this learning unit, the student is able to: Understand some key economic mechanisms at work in general equilibrium models, and how the determine their predictions. Derive the behavioral equations of the models covered in the course, and understand the fundamentals of some important model solution techniques. Be able to perform some basic model simulations in Matlab.

Content

The broad areas covered are:

• The neoclassical growth model
• Real business cycle models
• Money, nominal rigidities, demand determined output, the New Keynesian model
• Some aspects of fiscal policy, e.g. non-ricardian households

Teaching methods

Lectures + homeworks + tutorial classes

Evaluation methods

Individual homework (penalties for lack of delivery, maximum penalty -2/20).
Written or oral exam (depending on sanitary conditions).

Bibliography

David Romer (2019), Advanced Macroeconomics, 5th edition (but earlier editions are fine), McGraw-Hill.
Michael Wickens (2008), Macroeconomic Theory. A Dynamic General Equilibrium Approach, Princeton University Press.
Jordi Gali, Monetary Policy, Inflation, and the Business Cycle. An Introduction to the New Keynesian Framework. 
The models we are dealing with in the class can all be solved numerically and simulated using the (free) code package Dynare. You can download Dynare here: https://www.dynare.org/download/ . In case you have an apple computer, you need to download the MacOS version.
To run Dynare code you need to install the software Matlab.

Faculty or entity

> ECON