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.
- Module Supervisor: Lukas Mayr
Category: Department of Economics