Macroeconomics 2 (ECO-CO-MACRO2)


Department ECO
Course category ECO Compulsory courses
Course type Course
Academic year 2021-2022
Term BLOCK 3
Credits 1 (EUI Economics Department)
Contact Simonsen, Sarah


Dynamic Programming and Real Business Cycles (Jesus Bueren)

This course covers infinite-horizon optimization via dynamic programming (both deterministic and
stochastic) as well as its application to some simple partial- and general-equilibrium models.

Topics covered:
• Equilibrium with complete markets (static exchange economies, exchange economies with infinitely
lived agents –without and with uncertainty)
• Dynamic programming (sequential versus recursive formulation, the principle of optimality,
the contraction mapping theorem, discrete state-space methods, neoclassical growth, recursive
competitive equilibrium)
• Stochastic dynamic programming (RBC and Lucas-Tree models, the Permanent-Income Hypothesis,
precautionary savings)

Grading: Problem sets (10%) and final exam (90%)

New Keynesian Economics (Edouard Challe)

This course introduces students to the New Keynesian model. It derives the New Keynesian Phillips curve
from nominal rigidities and studies how it interacts with aggregate demand to jointly determine output,
employment and inflation over the business cycle. It also covers various dimension of monetary policy,
from its optimality to its implementation via simple policy rules.

Topics covered:
• Log-linearization of macroeconomic models
• The dynamic IS curve and the New Keynesian Phillips curve
• Monetary policy rules
• Optimal monetary policy under discretion versus commitment

Grading: Problem sets (10%) and final exam (90%)




Register for this course

Page last updated on 21 September 2018

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