Prof.Nobuhiro Kiyotaki and Prof.Benjamin Moll

This course is compulsory on the MSc in Econometrics and Mathematical Economics. This course is not available as an outside option.

Students must have completed Introductory Course for MSc EME (EC451).

Course objectives and main course elements:

1. The course will teach you the concepts used in empirical and theoretical macroeconomics.

2. The course will teach you the main empirical business cycle characteristics of developed economies and the main empirical findings regarding the growth of developed and less developed nations.

3. This course teaches you the main techniques used to analyse modern macroeconomics models. In particular, the course will focus on techniques such as dynamic programming, value function iteration, and the linearization of first-order conditions.

4. This course teaches you (prototype versions of) macroeconomic models used to analyse key questions related to business cycles and economic growth. Examples are New Keynesian models, Real Business Cycle models, Overlapping Generations models, the Solow growth model, and first-generation endogenous growth models.

5. The course will also discuss some more advanced models that have recently been developed to explain recent economic events, including models with heterogeneous agents, financial frictions and labour market frictions.

20 hours of lectures and 10 hours of seminars in the MT. 20 hours of lectures and 10 hours of seminars in the LT.

Some of the problem will sets will consist of computer and data assignments and students will be taught some basic programming and data analysis skills.

Students are assigned problem sets. These problem sets focus on key elements of the lectures, but they will also promote creativity and critical thinking by going beyond the material explicitly discussed in the lectures. There will also be computer assignments. The problem sets will be discussed by the class teachers.

• Acemoglu, Daron, 2009, Introduction to Modern Economic Growth.
• Ljungqvist, Lars and Thomas J. Sargent, 2012, Recursive Macroeconomic Theory.
• Stokey, Nancy L. and Robert E. Lucas Jr., 1989, Recursive Methods in Economic Dynamics.

Exam (50%, duration: 2 hours, reading time: 15 minutes) in the summer exam period.
Exam (50%, duration: 2 hours) in the January exam period.