Teacher(s)
Chafwehé Boris (compensates Pensieroso Luca); Pensieroso Luca;
Language
English
Prerequisites
ECON2021 Fluctuations économiques et fondements de la politique macro (or similar)
Main themes
The course should cover models relevant for economic policy, especially with goods and labour market imperfections as well as with monetary policy. The course also covers the application of general equilibrium dynamic models to stochastic environments (such as real business cycle models and New Keynesian models). It includes economic policy simulations.
Learning outcomes
At the end of this learning unit, the student is able to : | |
| 1 |
The aim of the course is to cover at an advanced level the main topics of modern macroeconomic theory, with an emphasis on its relevance for economic policy and applications of general equilibrium dynamic models. Students should learn to master the corresponding simulation tools. |
Content
This course introduces students to the core elements of modern macroeconomics from a Dynamic General Equilibrium (DGE) perspective. The focus of the course will be on providing the students with the analytical tools necessary to carry out research in macroeconomics. The broad areas covered are:
- The neoclassical growth model
- Real business cycle models
- Money, nominal rigidities, demand determined output, the New Keynesian model
- Other specific aspects of DGE models
Teaching methods
Lectures + group assignments + tutorial classes
Evaluation methods
Group homework and oral presentation(s) (2/20).
Written exam (18/20).
The use of Artificial Intelligence (AI) during the exam is forbidden. See Faculty (ESPO) regulations on the matter.
Written exam (18/20).
The use of Artificial Intelligence (AI) during the exam is forbidden. See Faculty (ESPO) regulations on the matter.
Bibliography
Main textbooks:
Additional textbooks:
Other references: (non-mandatory reading)
The models we are dealing with in the class can all be solved numerically and simulated using the (free) code package Dynare. You can download Dynare here: https://www.dynare.org/download/ . In case you have an Apple computer, you need to download the MacOS version.
To run Dynare code you need to install the software Matlab.
- Azzimonti, Krusell, McKay, Mukoyama (in progress), Macroeconomics, available at phdmacrobook.org
- Gali (2015), Monetary policy, Inflation, and the Business Cycle, Princeton University Press.
Additional textbooks:
- Romer, D. (2019), Advanced macroeconomics, McGraw-Hill.
- Walsh, C. E. (2017). Monetary theory and policy, MIT press.
Other references: (non-mandatory reading)
- Blanchard, O. J., Kahn, C. M. (1980). The solution of linear difference models under rational expectations. Econometrica: Journal of the Econometric Society, 1305-1311.
- Chari, V. V., Kehoe, P. J., McGrattan, E. R. (2007). Business cycle accounting. Econometrica, 75(3), 781-836.
- Christiano, L. J., Eichenbaum, M., Evans, C. L. (2005). Nominal rigidities and the dynamic effects of a shock to monetary policy. Journal of political Economy, 113(1), 1-45.
- Clarida, R., Gali, J., Gertler, M. (1999). The science of monetary policy: a new Keynesian perspective. Journal of economic literature, 37(4), 1661-1707.
- Kydland, F. E., Prescott, E. C. (1982). Time to build and aggregate fluctuations. Econometrica: Journal of the Econometric Society, 1345-1370.
- Nicoletti, G., Pensieroso, L. (2026). Exogenous fluctuations: DSGE models. LIDAM Discussion Papers IRES, (2026001).
- Smets, F., Wouters, R. (2007). Shocks and frictions in US business cycles: A Bayesian DSGE approach. American economic review, 97(3), 586-606.
The models we are dealing with in the class can all be solved numerically and simulated using the (free) code package Dynare. You can download Dynare here: https://www.dynare.org/download/ . In case you have an Apple computer, you need to download the MacOS version.
To run Dynare code you need to install the software Matlab.
Faculty or entity
