The module is intended to complement and extend the material covered in intermediate macroeconomics. There is a particular focus on the foundations and the data of macroeconomics. We will emphasize the dynamics and uncertainty inherent in the measurement and the analysis of the national accounts – aggregate output, prices, wages, unemployment and productivity. We will discuss difficulties in building a coherent yet practical conceptual framework as well measuring aggregate economic data that are used to test alternative macroeconomic theories. Key ideas in the module will be illustrated with reference to recent events and current policy debates.
The module starts with a review of elementary non-cooperative game theory. It then moves on to the analysis of firm behaviour in oligopolistic industries.
Throughout the module the emphasis will be on understanding how the theoretical tools can be used to analyse real world issues. The theory will be confronted against empirical evidence, and its implications for competition policy and business strategy will be discussed.
Upon completion of this module, students will have a good understanding of the main economic forces behind strategic behaviour in oligopolistic markets. Students will also have an appreciation of the role of game theory in understanding price and non-price competition among firms. Finally, students will learn to adapt economic models to particular challenges such as business strategy and competition and industrial policy.
At the completion of this course, students should be able to grasp the main tools of economic analysis as applied to the environment and to appreciate the main theoretical issues in this area. Further, students should be able to design suitable policies to achieve desirable environmental outcomes. In completing the assignment for this course, students will demonstrate their problem-solving analytical and deductive skills.
This module is concerned with topics in modern microeconometrics. Its
coverage begins with an examination of the nature of causal and noncausal models, a discussion of the nature of microeconomic data structures, and a review of core econometric methods.
It then proceeds to cover the analysis of limited dependent variable models, including discrete choice models and selection models, and then to examine program evaluation methods, including difference-in-differences estimators, regression discontinuity approach, and instrumental variables
Feedback for this module will occur through class meetings where we will go over the answers to problem sets and where you will be able to ask questions about your own method of solution; answers that will be posted on the website for the module that will give you written guidance on the appropriate method to approach the problems, assignments, and tests; and office hours where any additional questions can be addressed. You should be sure that you use these methods to understand how to improve your own performance.
This module is for post-graduate research students in the Department of Economics. In the first half of the course, we will study normative and positive aspects of dynamic fiscal policy with a particular focus on government debt. After a short introduction to quantitative macroeconomics using the software Matlab, we look at fiscal policy chosen by governments that (i) face political economy distortions, i.e., cannot commit beyond the current tax, expenditure, and debt policies; (ii) are subject to limited commitment, i.e., may strategically choose not to honour the outstanding debt obligations. Specifically, we will look at some or all of the following topics (depending on the progress through the term):
1. Standard solution methods for dynamic economic problems: value function iteration, time iteration, function approximation.
2. The political economy of government debt accumulation.
3. Sovereign debt and default.
In the second half of the course, we will analyse the implications of search frictions for the labour market. In particular, we will analyse the existence of unemployment and of wage dispersion across similar workers. We will develop the main tools of the search and matching approach, and we discuss both theoretical and empirical literature. We will look at some or all of the following topics (depending on progress through the term):
1. On-the-job Search and Wage Posting
2. Sequential Auctions and Individual Bargaining
3. Sorting in the Labour Market
Please refer to the Module Directory for information about Ec992.
This module builds on the notions covered in EC904 Macroeconomics. The course starts with more advanced techniques of dynamic programming. We then cover the theory of Real Business Cycle, with particular emphasis on how to solve these models numerically, using Dynare. We them study the implications of three different types of frictions: nominal rigidities (New-Keynesian model); search and matching frictions ( Diamond-Mortensen-Pissarides model); and financial frictions (financial accelerator model).
The third part of the course focuses on Fiscal policy. We will look at the effects of government spending and taxation. We also examine optimal policy under complete and incomplete markets and the problem of time inconsistency.