Prof W den Haan, STC.S877, Dr E Ilzetzki, STC.S879, Prof P Krusell (Guest Lecturer), and Prof S Tenreyro, STC.S579.

This course is for the MRes/PhD in Economics. It is also available, subject to regulations and with the permission of the course proprietor, to students on MSc Econometrics and Mathematical Economics.

The course will cover topics in advanced macroeconomics with emphasis on fundamentals and applications to recent theoretical advances:

i. Economic growth: Neoclassical Growth Model, Optimizing Behaviour in dynamic models under certainty, Endogenous Technological Change, Imitation and Convergence, Growth and Development Accounting, Appropriate Technology.
ii. Search and Matching: The Matching Model, Efficiency Wages, Growth
and Unemployment.
iii. Dynamic Stochastic General Equilibrium Models : Real Business
Cycles, applications to models of heterogeneous agents and open economy. Fiscal policy analysis.
iv. Monetary Economics: models with credit frictions, sticky prices, search.

Lectures EC442: 60 hours MT and LT.

Classes EC442.A: 30 hours sessional.

Exercises are set for each class. In addition, there will be a one-and-a-half-hour mock examination at the start of the LT and the ST.

A good general textbook that is mostly below the level of the course is: D Romer, Advanced Macroeconomics, McGraw-Hill Advanced Series in Economics, New York, 1996. For the growth part the main references are the textbooks by D. Acemoglu, Introduction to Modern Economic Growth, Princeton University Press, 2009, and R J Barro & X Sala-i-Martin, Economic Growth, McGraw-Hill, 1997. Other useful texts include: L Ljungqvist & T Sargent, Recursive Macroeconomic Theory, MIT Press, 2000, N Stokey & R E Lucas, Recursive Methods in Economic Dynamics, Harvard University Press, 1989. More economic applications, with some required readings can be found in: M Obstfeld & K Rogoff, Foundations of International Macroeconomics, MIT Press, 2000; P Aghion & P Howitt, Endogenous Growth Theory, MIT Press 1998; C A Pissarides, Equilibrium Unemployment Theory, MIT Press 2000.

References for recent theoretical advances published in the journals will be given during the course.

A three-hour written examination in the ST (100%).