Advanced Macroeconomics I

Recommended Prerequisites

Knowledge of macroeconomics at an intermediate level: Hicks-Hansen, Mundell-Fleming, and AS-AD models; original and expectations-augmented Phillips curve; Solow’s growth model and budget constraint.

Knowledge of microeconomics at na intermediate level: consumer theory; production theory; equilibrium, efficeincy and welfare properties of a  perfectly competitive economy.

Knowledge of mathematics : calculus and linear algebra  required for undergraduate students in Economics.

Teaching Methods

The course is based on classroom teaching with considerable interaction between the teacher and the students.

Learning Outcomes

1. Describe Solow’s economic growth model and evaluate its capacity to answer central issues of economic growth analysis

2. Evaluate the implications of endogenizing savings decisions, namely the effects of changes in the savings rate, to economic policy in Ramsey-Cass-Koopmans’ and Diamond’s models

3. Identify and describe the main forms of nominal and real rigidity which are the source of gradual price and wage adjustment, and their role in the explanation of economic fluctuations and stabilization policies

4. Describe the relation between money supply, inflation and interest rates, and identify the causes and effects of budget deficits

5. Characterize the main monetary policy strategies, evaluating the implications of the rational expectations hypothesis and the conditions under which there may be problems of dynamic inconsistency, and prescribe solutions to those problems

6. Compare and criticize the models studied and select those that are best suited to the issues analyzed

Work Placement(s)

No

Syllabus

1. Neoclassical theory of economic growth: the Solow model

2. The Ramsey-Cass-Koopmans model

3. The Diamond overlapping-generations model

4. Real business cycles models

5. Traditional Keynesian theories of fluctuations

6. Microeconomic foundations of nominal rigidity

7. Inflation and monetary policy

8. Budget deficits and fiscal Policy

Head Lecturer(s)

Pedro Miguel Avelino Bação

Assessment Methods

Continuous evaluation
Homework assignements : 20.0%
One written test : 80.0%

Bibliography

Romer, David (2012), Advanced Macroeconomics, 4ª edição, McGraw-Hill.

Acemoglu, Daron (2008). Introduction to Modern Economic Growth. Princeton University Press.

Bagliano, Fábio-Cesare e Giuseppe Bertola (2004). Models for Dynamic Macroeconomics. Oxford University Press.

Heijdra, Ben J. (2009). Foundations of Modern Macroeconomics, 2ª edição. Oxford University Press.

Artigos científicos selecionados pelos professores.