We introduce the fundamental methods and toolkit needed to analyze dynamic general equilibrium optimizing models in discrete time. The goal of this course is to provide students with understanding a set of key macroeconomic models. While there is no single textbook for the course, the lectures loosely follow sections in Krussell (K): Real Macroeconomic Theory, manuscript, 2014.
For the lectures on incomplete markets Ljungqvist and Sargent: Recursive Macroeconomic Theory is a helpful reference.
Additional recommended readings will be available online.
ü Students understand the mechanics of the relevant models taught.
ü They are able to set up and solve standard dynamic macroeconomic models.
ü They understand how macro models relate to macro data.
ü They know how to use standard software for solving and simulating macro models.
Assessment for the whole 3-credit course is through a final exam and problem sets, the former accounting for 80%, the latter for 20% of the total course grade. You are free to work in study groups for problem sets, but you need to hand in an individual solution.
Pre-requisites: This is a compulsory, core class for first-year PhD students. Enrollment is open to interested second-year MA students as well.