Economics

The course teaches state-of-the art techniques to analyse macroeconomic policies through the lens of advanced macroeconomic models. It covers models with incomplete markets, financial and informational frictions, and heterogeneous agents. The key building blocks of numerical techniques are used to solve nonlinear dynamic stochastic models, such as perturbation, parameterized expectations and projection methods. Relevant theoretical aspects, such as the possibility of sunspots solutions, non-coordination in policies, optimal policies, and the role uncertainty plays in economic decision making, are also discussed. The course also teaches the tools to estimate such models (Kalman filter, Bayesian estimation, MCMC). Students are taught how to use Dynare, a software to solve, simulate and estimate macroeconomic models, but also how to write Matlab programs to solve a variety of models.