Introduction to Modern Macroeconomics II, Fall 2019
This is the second course in the macroeconomics part of the master program. This course has 3 modules. In the first part, we will review mathematical perquisites for solving dynamic problems, which is the case for most of macro problems. We introduce Bellman Equations and the principle of optimality and using fixed point theorems show how to use iteration methods to find the value function as well as policy function. Finally we will introduce neoclassical growth model.
Second part of the course focuses on the economics of money, banking and financial markets. It is very important to understand how financial markets work and how they may affect real economy.
The last part of this course is devoted to monetary policy. We will introduce quantity theory of money and will argue that almost always inflation is the result of rapid growth of the money supply. If time permits, we will also introduce transmission mechanisms of monetary policy.
Problem set 1, due on Sep 28th
Problem set 4: Mc-Call Search Model: Theory, due on Oct 20th
Problem set 6: Continious Search Model and many applications such as Brudett and Mortensen (1980), Hey (1979) and Fallick (1993), due on Nov 2nd.
Problem set 7: Neo-classical growth model and investment with adjustment cost, due on Nov 9th.
Midterm Project: Simulation of NGM with adjustment cost and comparative statics, due on midterm day.
Problem set 8: Collateralized Debt Obligations, Securitization and Tehran Houses, due on Dec 2nd.
Problem set 9: Finance and Economic Development, due on Dec 14th.
Problem set 10: Read and summarize Sargent (1982) The Ends of Four Big Inflations.
Problem set 11: Money and the Economy, due on Jan 8th.
Lecture 1: Dynamic Optimization
Lecture 5: Discrete-Time Search Models
Lecture 6: Continuous-Time Search Models
Lecture 7: Neo-Classical Growth Model
Lecture 8: Money and the Economy
Interesting Macro Classes
Thomas Winberry, Chicago Booth
Ben Moll, Princeton
Robert Townsend, MIT
What Money Can’t Buy?
Very intresting book and series of videos by Micheal Sandel of Harvard.
How The Economic Machine Works?
by Ray Dalio
I recommend the following paper to my math enthusiast friends!
Partial differential equation models in macroeconomics by Ben Moll et. al.
Ben Moll has a very nice lecture about inequality and macro.