Syllabus
EN
IT
Learning Objectives
LEARNING OUTCOMES: The aim of the course is to provide students with the tools they will need to understand and analyse economic growth, consumption and asset prices. The course will present the traditional models, derive testable implications, consider the empirical evidence and attempt to consider possible new approaches.
KNOWLEDGE AND UNDERSTANDING: Students should master the mathematical tools of dynamic optimization including dynamic programming. These technical skills will be needed for an understanding of the mechanisms driving economic growth, saving and investment in productive asset. These skills will be also used for the study of the business cycle in Macroeconomics II.
The course provides an introduction to modern macroeconomic modeling. Students will acquire knowledge of real business cycle models and monetary economies. They will learn essential numerical solution techniques, as well as how to assess models empirically. By the end of the course, students will have a solid understanding of central bank policies and will be able to analyze them independently with the help of macroeconomic models and data.
KNOWLEDGE AND UNDERSTANDING: Students should master the mathematical tools of dynamic optimization including dynamic programming. These technical skills will be needed for an understanding of the mechanisms driving economic growth, saving and investment in productive asset. These skills will be also used for the study of the business cycle in Macroeconomics II.
The course provides an introduction to modern macroeconomic modeling. Students will acquire knowledge of real business cycle models and monetary economies. They will learn essential numerical solution techniques, as well as how to assess models empirically. By the end of the course, students will have a solid understanding of central bank policies and will be able to analyze them independently with the help of macroeconomic models and data.
Prerequisites
Calculus, Principles of Microeconomics, Principles of Macroeconomics, basic knowledge of macroeconomics, linear algebra, constrained optimization, Matlab.
Program
MODULE I: 1. Introduction to growth theory: The Solow model in discrete and in continuous time. Transitional dynamics. Sustained growth. Technological progress. Growth accounting and empirical evidence. 2. Foundations of neoclassical growth: The representative household, and the Euler equation. Competitive equilibrium. Welfare Theorems. Optimal Growth. An introduction to dynamic programming theorems. Steady-state equilibrium and transitional dynamics. Technological change, policy and comparative dynamics. 3. Asset prices and consumption: An introduction to dynamic programming under uncertainty. The stochastic Euler equation. Optimal saving, intertemporal substitution and wealth effect. Hall’s random walk theory of consumption. Precautionary saving and prudence. Lucas’ model of asset prices. The Modigliani-Miller Theorem. Government debt and Ricardian equivalence.prudence. Lucas’ model of asset prices. The Modigliani-Miller ThernTheorem. Government debt and Ricardian equivalence.
MODULO II: 1. Standard RBC model. Solving the model: equilibrium conditions, linearization, linear rational expectations. Numerical: introduction to Dynare, model solution, simulation, impulse responses. Empirical: obtaining macro data, extracting cyclical and trend components.
2. Money-in-utility model, cash-in-advance model, money in OLG. Nominal rigidities: New Keynesian model, welfare cost of inflation, optimal rate of inflation, optimal monetary stabilization policy, divine coincidence. Conduct of monetary policy by central banks, ZLB, unconventional monetary policy.
MODULO II: 1. Standard RBC model. Solving the model: equilibrium conditions, linearization, linear rational expectations. Numerical: introduction to Dynare, model solution, simulation, impulse responses. Empirical: obtaining macro data, extracting cyclical and trend components.
2. Money-in-utility model, cash-in-advance model, money in OLG. Nominal rigidities: New Keynesian model, welfare cost of inflation, optimal rate of inflation, optimal monetary stabilization policy, divine coincidence. Conduct of monetary policy by central banks, ZLB, unconventional monetary policy.
Books
- Daron Acemoglu, Introduction to Modern Economic Growth, Princeton University Press, 2009.
- David Romer, Advanced Macroeconomics, McGraw-Hill, 2011.
- Lecture notes.
Questo materiale è necessario.
- David Romer, Advanced Macroeconomics, McGraw-Hill, 2011.
- Lecture notes.
Questo materiale è necessario.
Bibliography
- Daron Acemoglu, Introduction to Modern Economic Growth, Princeton University Press, 2009.
- David Romer, Advanced Macroeconomics, McGraw-Hill, 2011.
- Lecture notes.
This material is necessary.
- David Romer, Advanced Macroeconomics, McGraw-Hill, 2011.
- Lecture notes.
This material is necessary.
Teaching methods
In additional to conventional lectures, there will be 2/3 practice classes. In a practice class students will work on exercises under my guidance. These exercises will be similar to those in the final test.
Exam Rules
During the course students will be working on 2/3 home assignments. These assignments will be graded and, overall, will count for 40% of the final grade. The final exam will consist of a written test cointaining, tentatively, two exercises and two theoretical questions. The final exam will count for the residual 60% of the final grade.
The final evaluation will consist in a written exams containing two exercises and two short essays. Both will serve to verify the understanding of the mechanisms underlying economic growth and of policies promoting economic growth.
The final evaluation will consist in a written exams containing two exercises and two short essays. Both will serve to verify the understanding of the mechanisms underlying economic growth and of policies promoting economic growth.