Learning objectives
At the end of the course the student is able to:
- Understand empirical information regarding economic data, including the ability to critically appraise and characterize these data.
- Understand and critically appraise the main theories of advanced macroeconomics.
- Discuss, present, and critically evaluate different theories in light of available data.
- Understand and being able to apply various mathematical techniques in macroeconomics.
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We provide an overview of the workhorse models of dynamic macroeconomic analysis. These include a recap of the Solow model, the neoclassical growth models and models of technological change and technology adoption. Motivated by economic data on the salient features of the process of economic growth, we derive and analyse these models in the face of real-world problems. To this end, we apply mathematical techniques and use tools of visualization.
The course will different types of dynamic long run growth models: Solow, Ramsey-Cass-Koopmans and Romer.
Next, the course touches on a recent evolution that has received lots on attention: the labor share. We will zoom in on two possible explanations that have been put forth in the literature: imperfect competition and automation. Each of these will introduce new elements into the covered structure of dynamic long run growth models. In addition, these lectures will bring students in contact with an important features of current macro research: building up explanation for macro-economic outcomes from micro-economic foundations.
Time permitting, we will relax the assumption of full employment and study externalities in the labour market. Search frictions are a standard theory for aggregate unemployment. Different from our previous models, the economy does not reach an equilibrium where all markets clear.
The assessment of this course will be based on a mix of assignments that require you to apply the content of these models to real-world cases and an end term exam.
Format
Lectures; 1h45 hours per week during eight weeks.
Tutorials; 1h35 hours per week during eight weeks.
Assessment method
Presentation / discussion / assignments; 40% of grade.
Final exam – written, individually graded; 60% of grade.
Prerequisite knowledge
Students must be familiar with undergraduate macroeconomics, until the intermediary level included. Students must master frameworks such as the IS-LM model or the Solow basic growth model. Olivier Blanchard's textbook (new edition 2017) contains all the material to catch up beforehand.
The student should have a working knowledge of (static) optimization and differential equations, such as provided in Mathematics course (ECRMMAT).
Knowledge is also required in microeconomics: students must master microeconomics at an intermediary level. Concepts such as different forms of competition, rms' price setting behaviours or utility maximisation under budget constraints must be known.
Exit requirements
Knowledge
1a) Broad knowledge of core and state-of-the-art theories and empirical methods in economics
Research skills
2d) Presentation and communication in English (communication to experts and non-experts; ability to give policy advice)
2g) Working in an international team, also with academics from other disciplines
2h) Assess economic policies, and make economic forecasts
Research competences
3a) Ability to think in a logical way
3b) Ability to summarize and identify common themes in the literature on a specific topic, and to keep track of recent developments
3c) Ability to critically appraise literature
3g) Ability to apply acquired knowledge of theories and empirical methods within economics
3i) Ability to communicate and collaborate, including with scholars from other disciplines
3l) Ability to develop as an independent academic, formulating research questions, and answering them
Research attitudes
4a) Critically reflect on own work, and critically reflect on work of others in an appropriate way
4f) Acquire an attitude of lifelong learning
In case online access is required for this course and you are not in the position to buy the access code, you are advised to contact the course coordinator for an alternative solution. Please note that access codes are not re-usable meaning that codes from second hand books do not work, as well as access codes from books with a different ISBN. Separate or spare codes are usually not available.
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