MACROECONOMIC ANALYSIS
Obiettivi formativi
Provide basic notions and methods of advanced macroeconomic theory with special focus on consumption, asset pricing, economic growth and equilibrium unemployment
Risultati di apprendimento attesi
Elementary macroeconomic and microeconomic theory, basic notions in calculus and optimization.
Contenuti Del Corso
Introduction to advanced macroeconomics with focus on the theory of consumption and asset pricing, neoclassical growth, endogenous growth and equilibrium unemployment.
Testi Di Riferimento
Class Notes, Pissarides (2000) "Equilibrium Unemployment theory", Romer, D. (2004) "Advanced Macroeconomic Theory"
Metodologie Didattiche
Regular lessons, class assignments and review sessions where the students are asked to make presentations.
Modalità di verifica dell'apprendimento
Written exam supplemented by a mid term exam and evaluation of the presentations in the review sessions.
Criteri per l’assegnazione dell’elaborato finale
Written exam, performance in class and grades in solving class assignments.
Settimana 1
Review of the Solow Growth Model. Dynamic efficiency. Cass criteria and Malinvaud Transversality. Ramsey Plans, Euler equations, Transversality, proving sufficiency.
Settimana 2
Lagrange Method. Stability analysis and linearization. Introduction to Bellman equations.
Settimana 3
Some standard examples. Social optima with overlapping generations. Modeling uncertainty. Characterizing Ramsey Plans under uncertainty. Costs of business cycles. Examples.
Settimana 4
Consumption and savings with complete markets. Budget sets, debt limits and the Euler equation. Ponzi games, transversality, integrability of life-time budget constraints, consumption smoothing and the permanent income hypothesis.
Settimana 5
The case of uncertainty: complete markets and incomplete markets. The certainty equivalent model. Precautionary savings. Asset pricing with long lived assets.
Settimana 6
Competitive equilibrium with complete markets and long-lived individuals. Consumption smoothing and risk sharing with no aggregate uncertainty. First Welfare Theorem. Overlapping generations model.
Settimana 7
First generation of endogenous growth model. Lucas (1988) and Romer (1986) model
Settimana 8
Continuing on previous topic.
Settimana 9
Endogenous growth model through expanding variety model, Romer (1990)
Settimana 10
Introduction to Poisson processes. Growth through creative destruction, Aghion and Howitt (1992) model. Discussion of empirical evidence.
Settimana 11
Equilibrium unemployment theory. The Diamond-Mortensen-Pissarides model. The Bevridge curve and the Job creation schedule.
Settimana 12
Comparative statics in the DMP model. Effects of unemployment insurance and severance payments on equilibrium unemployment. Empirical evidence.