After successful completion of the course, students are able to...

• numerically solve a wide range of determistic and stochastic macroeconomic models (DSGE),
• calibrate a model to empirical data,
• quantify the effects of economic shocks and policies and interpret them economically,
• write a master thesis in the field of macroeconomics.

Part I: The deterministic neoclassical growth model

• Model description and definition of equilibrium
• Characterizing the for the optimal time paths
• Dynamic properties of the optimal time paths: steady state and stability
• Computational implementation: calibration and numerical solution
• Project: An epidemic in the deterministic neoclassical growth model (Macro-SIR-model)

Part II: The stochastic neoclassical growth model

• Model description and solution using dynamic programming
• Approximation of the optimal policy functions by linearization
• Computation implementation: solving DSGE models with Dynare
• Project: Policy analysis in a DSGE model using Dynare

Presentation combined with interactive work in Matlab
Voluntary self-assessment tasks
Introduction to Dynare, a software platform for handling a wide class of economic models
Presentation of sample solutions for the projects

The course is split into two parts. Each part consists of several classroom sessions followed by a project phase. The classroom sessions take place via Zoom. The link can be found in the TUWEL course.

The syllabus can be found at http://www.mkerndler.com/downloads/dynmod_syllabus_ss2021.pdf.

The grade is based on two projects, which have to be worked out in groups of one or two students during the semester.

Prior knowledge of dynamic economic models (in particular the Ramsey growth model) is advantageous but not necessary. The computational implementation of the projects should be done in MATLAB. Students who have never worked with MATLAB before or have not used it for a while, are expected to go though an introductory guide before (a reference is provided in the detailed syllabus on the TUWEL site of this course).