Description and contextualization of the subject

In this course students acquire the theoretical skills and computational tools needed to understand the behavior of aggregate economic variables. Taking into account that this may be the first approximation of the students to economics, emphasis is placed on a rigorous understanding of basic concepts. The course covers basic macro models common to introductory macroeconomics in most graduate programs. The course includes an introduction to Matlab programming, an essential analytical tool for economic research that will also be needed in the Growth and Development and Monetary Markets courses.

Ordinary call: orientations and renunciation

Grading: The grade will be based on homework assignments and a final exam:



* Homework assignments: there will be assignments that students will have to hand in to get a passing grade. These assignments will worth 30% of the final grade. Students are encouraged to work in teams, but each student has to hand in his/her own homework. Assignments ARE required within specific due dates.



* Final exam: the final examination will count for the remainder of the grade (i.e. 70%).

Extraordinary call: orientations and renunciation

* A second call will be open after students take the third and fourth block exams. The evaluation system defined for the first sitting holds.

Temary

1. Data

(a) Main aggregate variables: Measuring Economic Activity (GDP), Unemployment, Inflation.

(b) Sources of Aggregate Data.



2. Finite horizon

(a) Motivation.

(b) The overlapping generations model (OLG): A two-period OLG model.

(c) Solving with Matlab: programming of the two-period OLG model.

(d) Fiscal policy and Ricardian Equivalence.

(e) Inefficiency, Social security and population growth.

(f) Mapping OLG model with data.

(g) Extensions and related issues.



3. Infinite Horizon I: Exogenous growth

(a) Introduction and motivation.

(b) Neoclassical growth model: Ramsey-Cass-Koopmans.



4. Infinite Horizon II: Real Business Cycles

(a) Motivation.

(b) Dating and stylized facts of business cycles

(c) The Basic Real Business Cycle model

Bibliography

Compulsory materials

Echevarria (2021), Matlab: A Short Introduction



MacCallum (1988) "Real Business Cycle Models," in R. Barro, ed., Modern Business Cycle Theory (Cambridge, Mass.: Harvard University Press, 1989)



Krueger (2007b): Macroeconomic Theory, mimeo.



Novales, A. et al. (2009), Economic Growth. Theory and Numerical Solutions. Springer



Romer, D. (2006), Advanced Macroeconomics, 3rd edition. McGraw-Hill Irwin.

Basic bibliography

Barro, R. J. and X. Sala-i-Martín (2004), Economic growth, Cambridge, Massachusetts: MIT Press.

Cooley, T. and E. Prescott (1996): Economic Growth and Business Cycles, in Frontiers of Business

Cycle Research, Ch. 1, Ed. by T. Cooley and E. Prescott. Princeton University Press: Princeton. New

Jersey.

Diamond, P. (1965), National Debt in a Neoclassical Growth Model, American Economic Review,

55, no. 5, pp. 1126-1150.

Echevarria (2021), Matlab: A Short Introduction

Hodrick, R. and E. P. Prescott (1997), Post-war Business Cycles: An Empirical Investigation, Journal of Money, Credit, and Banking, 29, pp. 1-16

King R. and S. Rebelo (1999) "Resuscitating Real Business Cycles," in Handbook of Macroeconomics, Vol. 1B, Ed. by J. B. Taylor

Sims, E. (2011), Notes on Log-Linearization, mimeo, University of Notre Dame

Journals

Links

- https://fred.stlouisfed.org/



- http://www.nber.org/data/



- http://ocw.mit.edu/courses/economics/



- http://ec.europa.eu/economy_finance/db_indicators/ameco/index_en.htm



- http://epp.eurostat.ec.europa.eu/portal/page/portal/eurostat/home/



- http://www.imf.org/external/data.htm