The aim is to bring students closer to the research frontier in a specific area of macroeconomics: Dynamic Stochastic General Equilibrium (DSGE) models.
These models have become one of the leading tools for policy analysis in macroeconomics. These models are also part of the policy process in leading central banks such as Federal Reserve System or the ECB.
Students that successfully passed this course, on a basic level, can:
- list key empirical relationships between macroeconomic key variables such as inflation, real GDP and nominal interest rates;
- critically assess the basic theoretical models in modern macroeconomics that try to explain the key empirical relationships;
- set-up DSGE models to analyse and intuitively interpret the relationships between macroeconomic key variables;
- apply the key methods used to solve DSGE models;
- analyze DSGE models, e.g., compare their equilibrium predictions to the data;
- assess monetary policy within DSGE models;
- construct extensions of these DSGE models independently.
Course materials will be provided successively via the course cloud.
Here is the Link.
The password will be announced via TISS-News after the first meeting.
This course is to a large extent based on Williamson (2013), McCandless (2008), and Galí (2015). Other useful literature is Walsh (2017).
- Galí, J. (2015). Monetary Policy, Inflation, and the Business Cycle: An Introduction to the New Keynesian Framework and Its Applications. Princeton University Press, Princeton, NJ, Second edition.
- McCandless, Jr., G. T. (2008). The ABCs of RBCs: An Introduction to Dynamic Macroeconomic Models. Harvard University Press, Cambridge, MA.
- Walsh, C. E. (2017). Monetary Theory and Policy. The MIT Press, 4th edition.
- Williamson, S. D. D. (2013). Macroeconomics. Pearson Education, Inc., Fifth edition.
