Advanced Macroeconomics II

Recommended Prerequisites

Advanced Macroeconomics I , Mathematical Economics

Teaching Methods

To acquire specific competencies: classes with both a lecture and a tutorial component; class discussion of exercises and issues; reports prepared by the students on a set of exercises. To develop generic competencies: to help students develop the intended generic competencies, besides the class discussion of exercises and issues, there is a mixed assessment regime.

Learning Outcomes

1. Build and analyse open economy models;

a. analyse and discuss the results of those models concerning the gains of openness;

b. identify the implications of different hypothesis concerning the dimension of the economy under analysis;

c. analyse and discuss the consequences of government interventions in those models;

d. analyse open economy models with financial assets under uncertainty.

2. Build and analyse DSGE models of with equilibrium indeterminacy

3. Build and analyse bank run models

Work Placement(s)

No

Syllabus

1. Savings and the current account

2. Small open economy models

3. The life-cycle model, taxes and the current account

4. DSGE models of money

5. DSGE models of equilibrium indeterminacy

6. Bank runs models

Head Lecturer(s)

Pedro Miguel Avelino Bação

Assessment Methods

Assessment
A final test and the preparation of weekly reports on a set of exercises: 100.0%

Bibliography

Obstfeld, Maurice; Kenneth Rogoff – Foundations of international macroeconomics. Cambridge, Mass : MIT Press, 1998

Walsh, Carl, Monetary Theory and Policy, 3rd edition, 2010. MIT Press.

Benhabib, J., Farmer, R., 1994. Indeterminacy and increasing returns. Journal of Economic Theory 63, 19–41.

Wen, Y., 1998. Capacity utilization under increasing returns to scale. Journal of

Diamond, D. e Dybvig, P. (1983), Bank Runs, Deposit Insurance, and Liquidity, Journal of Political Economy, 91, 401--419.

Peck, J., e Shell, K. (2003), Equilibrium Bank Runs, Journal of Political Economy, 111