105.723 AKVWL Inequality in Macroeconomics
This course is in all assigned curricula part of the STEOP.
This course is in at least 1 assigned curriculum part of the STEOP.

2021S, VU, 2.0h, 3.0EC


  • Semester hours: 2.0
  • Credits: 3.0
  • Type: VU Lecture and Exercise
  • Format: Distance Learning

Learning outcomes

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

  • analyze macroeconomic models with heterogeneous agents and to solve them numerically
  • calibrate/estimate a model based on empirical evidence
  • carry out stochastic simulations of the model
  • simulate counterfactual experiments
  • write a Master thesis in Macroeconomics

Subject of course

  • Documentation of empirical facts regarding inequality (income, wealth, etc.)
  • Dynamic programming: Theory and Practical use
  • Income fluctuation problem (partial equilibrium model)
  • Standard incomplete markets model (general equilibrium model)
  • Numerical methods: Value function iteration, Monte Carlo simulation, Calibrattion

Teaching methods

  • Interactive lecture with active participation and discussion by participants
  • Practical implementation of numerical algorithms in problem sets (group work possible)
  • Diskussion of solution to homeworks in tutorial classes

Mode of examination


Additional information

The course syllabus can be downloaded here:




Examination modalities

The final grade is based on the solution to the problem sets (30%) and a final project (70%)

The final project consists of a presentation of a paper from the literature and a (partial) replication of the numerical results.

Course registration

Not necessary



No lecture notes are available.

Previous knowledge

  • Students should have completed intermediate courses in microeconomics and macroeconomics
  • Previous knowledge with dynamic economic models is beneficial but not absolutely necessary
  • Since the course will be centered around computational work, having some experience with programming is advantageous
  • We will work with MATLAB throughout this course. Student who have not worked with MATLAB before or need to refresh their knowledge, please consult a tutorial guide before the course (I can provide some practice exercises upon request)
  • TU students can get a free licensed MATLAB copy from the TU Wien webpage: http://www.sss.tuwien.ac.at/sss/mla/