Advanced Macroeconomics Ⅰ

• Japanese version: 上級所得理論Ⅰ

Objectives of the Course

This course is designed to build your research ability by providing particularly important methodological skills that are often used in modern macroeconomic research. In particular, we shall focus on (1) difference equations for describing variables that evolve over time, and (2) dynamic optimization methods for describing the optimal allocation over time.

Goals of the Course

After this course, students should be able to (1) solve any system of difference equations; (2) solve any dynamic optimizing problem using either by Lagrange method or by dynamic programming; and (3) read and understand advanced textbooks and professional articles in the field of macroeconomics.

Teaching Tips

This course is designed for first-year graduate students. To fill the gap between undergraduate and graduate macroeconomics, this course focuses on difference equations and dynamic optimization to build important mathematical methods for macroeconomic analysis.

Course Content / Plan

1. Introduction
2. Difference Equations: Linear Scalar Equations
3. Difference Equations: Nonlinear Equations and Linearization
4. Difference Equations: Linear Systems
5. Difference Equations: Nonlinear Systems
6. Dynamic Optimization: Finite Horizon
7. Dynamic Optimization: Infinite Horizon
8. Neoclassical Growth: Global Analysis
9. Neoclassical Growth: Numerical Analysis
10. Dynamic Programming: Basic Idea
11. Dynamic Programming: Applications
12. General Equilibrium: Real Economy
13. General Equilibrium: Monetary Economy
14. General Equilibrium: Monetary Policy
15. Imperfect Competition

Course Prerequisites and Related Courses

No prerequisite.
Prior to the semester, prospective students are strongly encouraged to read textbooks such as Simon and Blume, Mathematics for Economists, Norton, 1994, or alike. To get ready for the course, be familiar with constrained optimization, total differentiation, and matrix algebra.
Lectures of this course will be delivered entirely in English.

Textbook/Reference Book

There is no textbook you must purchase.
Reading list and other materials will be distributed at TACT.

Study Load(Self-directed Learning Outside Course Hours)

There will be 5-7 take-home assignments. Each assignment consists of many (time-consuming) questions. Some questions require computers.

Lecture materials

1. Indroduction
2. NonlinearDE
3. LinearSystems
4. Stability
5. NonlinearSystems
6. Optimization
7. InfiniteHorizon
8. Neoclassical
9. Numerical
10. DP
11. GE
12. Monetary
13. Imperfect

This lecture is provided under Creative Commons Attribution-Non Commercial-ShareAlike 4.0 International.

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