Advanced Macroeconomics
The purpose of this course is to further develop one’s understanding of the modern theories in macroeconomics. We will learn dynamic models that are developed to study aggregate economic behavior. Meanwhile, I will familiarize you with the tools that are commonly used in modern macroeconomics. We then apply these tools to various fields including (but not limited to) Asset Pricing, Monetary Policy, Fiscal Policy. This course serves as the foundation for many advanced courses in economics and finance.
Textbook:
The main textbook for the class is Ljungquist and Sargent.
Lars Ljungquist and Thomas J. Sargent (2004), Recursive Macroeconomic Theory, 2nd edition,
MIT Press.
Other Useful Reference;
Dirk Kruger’s Notes: Macroeconomic Theory (online)
Stephen Williamson’s Notes: Macroeconomic Theory (online)
Assessment:
Homework (50%) Final Exam (50%)
Preliminary List of Course Topics
1. Solow Model and Dynamic Programming
2. Heterogeneity in the standard model: insurance and consumption under complete markets and full information. (ch8)
3. OLG Models (ch9)
4. Ricardian Equivalence (ch10)
5. Fiscal Policies in the Growth Model (ch11)
6. Recursive Competitive Equilibrium (ch12)
7. Asset Pricing (ch13)
8. Economic Growth (ch14)
9. Incomplete Markets Models (ch16, ch17)
Rao Aiyagari. 1994. Uninsured idiosyncratic risk and aggregate savings, Quarterly
Journal of Economics. 109(3): 659-684
10. Monetary Policy (ch24)
11. Credit and Currency (ch25)