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Advanced Macroeconomics

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39 views2 pages

Advanced Macroeconomics

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sk7952
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© © All Rights Reserved
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Advanced Macroeconomics

Title Advanced Macroeconomics Number AIL7XX0

Department/School AIDE (CMCE) L-T-P [C] 3-0-2 [4]


Offered for UG/PG/ Ph.D. Type Elective
Prerequisite None

Objectives:

1. To explore the advanced concept of macroeconomics in modelling time, importance of


micro foundation in macroeconomics, labour market, monetary policy, and their policy
implications using data and simulations.
2. To introduce the dynamic games in macroeconomics and explore the recent development
in macroeconomic modelling, such as macroeconomics of pandemic.

Learning outcomes:

1. Students will be able to conceptualize and apply dynamic programming techniques in


different macroeconomic theories and policy.
2. Students will learn macroeconomic modelling using different mathematical concepts and
dynamic games. Additionally, students will learn mathematical modelling of the
macroeconomics of pandemic.
Course contents (* represent Supplementary Reading Materials):
1. Notes on Mathematical Preliminaries: Stochastic difference equations; Markov processes;
Dynamic Programming, Complete Markets; sequential trading and Arrow securities; Recursive
competitive equilibrium; examples of incomplete markets. (L8) [R1, R2]
2. Basics of Business Cycle and RBC Models: Some Business Cycle Facts, Basic Structure with
and Without Labour; Money in Utility function; Monetary Policy. (L7) [R3 (Ch.13), R4(Ch. 17,
18), R5]
3. New Keynesian Models: Basic Structure, Price Stickiness, Optimum Pricing, Dynamic IS and
New Philips Curve, Monetary Policy Design. (L7) [R4(Ch. 11, 19)]
4. Search, Matching, Financial Frictions, and Unemployment: Labour Market, McCall's model
of intertemporal job search, A lake model, A model of career choice, Jovanovic's matching model.
(L6) [R4(Ch. 7, 8), R2 (Ch. 6), R6]

5. Heterogenous Agents Model: The New Keynesian Cross, Monetary Policy and Heterogeneity,
TANK, HANK, and SAM. (L7) [R7, R8, R9, R10, R11]

7. Macroeconomics of COVID-19: Macroeconomic Policy of Pandemics. (L2) [R15, R16]

References (It will be revised periodically):


1. Miao, J. (2013). Economic dynamics: Discrete time. MIT Press.
2. Sargent, T. J., & Ljungqvist, L. (2018). Recursive macroeconomic theory. MIT Press.
3. Sorensen, P.B. and Whitta-Jacobsen, H.J. (2010): Introducing Advanced Macroeconomics:
Growth and Business Cycles, 2nd Edition, McGraw-Hill.
4. Foundations of Modern Macroeconomics by Ben J. Heijdra, Oxford University Press,
2017.
5. McCandless, G. (2008), “The ABCs of RBCs: An Introduction to Dynamic
Macroeconomic Models”.
6. Pissarides, C. A. (2000). Equilibrium unemployment theory. MIT press.
7. Bilbiie, F. O. (2020). The New Keynesian Cross. Journal of Monetary Economics, 114, 90-
108.
8. BilbiieII, F. O. (2020). Monetary Policy and Heterogeneity: An Analytical Framework,
https://www.tse-fr.eu/sites/default/files/TSE/documents/sem2021/Macro/bilbiie.pdf.
9. Debortoli, D., & Galí, J. (2017). Monetary policy with heterogeneous agents: Insights from
TANK models, https://www.crei.cat/wp-content/uploads/2018/03/dg_tank.pdf.
10. Kaplan, G., Moll, B., & Violante, G. L. (2018). Monetary policy according to
HANK. American Economic Review, 108(3), 697-743.
11. Ravn, M. O., & Sterk, V. (2021). Macroeconomic fluctuations with HANK & SAM: An
analytical approach. Journal of the European Economic Association, 19(2), 1162-1202.
12. Van Long, N. (2010). A survey of dynamic games in economics (Vol. 1). World Scientific.
13. Balbus, Ł., Reffett, K., & Wozny, L. (2018). Dynamic games in
macroeconomics. Handbook of dynamic game theory, 729-778.
14. Pohjola, M. (1986). Applications of dynamic game theory to macroeconomics. Dynamic
games and applications in economics, 103-133.*
15. Fornaro, L., & Wolf, M. (2020). Covid-19 Coronavirus and Macroeconomic Policy.
16. Eichenbaum, M. S., Rebelo, S., & Trabandt, M. (2021). The macroeconomics of
epidemics. The Review of Financial Studies, 34(11), 5149-5187.

Online Resource:
1. https://ocw.mit.edu/courses/14-06-intermediate-macroeconomic-theory-spring-2003/
pages/syllabus/
2. https://ocw.mit.edu/courses/14-462-advanced-macroeconomics-ii-spring-2007/pages/
syllabus/
3. https://perhuaman.files.wordpress.com/2014/06/macrotheory-dirk-krueger.pdf

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