DESCRIPTION

Modern Macroeconomics studies the macroeconomic behavior that emerges as the result of the aggregation of decisions taken by rational economic agents who seek to maximize some objective function subject to constraints. Agents take decisions in a dynamic environment, that is, they consider what happened in the past and what they expect to happen in the future. Moreover, a full description of the macroeconomic reality also tries to consider the interplay of the different types of decisions made by economic agents.



OBJECTIVES

The first objective of this course is to build a theoretical framework to characterize how the main macroeconomic variables relate to each other, using a microfounded dynamic general equilibrium model. The second objective is to use macroeconomic models to analyze the performance of the economy under different policy scenarios. The last goal is to learn how to use model economies to think on macroeconomic issues in an organized way and to assess the weaknesses and strengths of different models and theories.

COMPETENCIES



-Use dynamic and microfounded models to characterize the macroeconomic behavior of economies in order to study issues that impact welfare and long run performance.



- Describe the long run effect of alternative fiscal and monetary policy measures to evaluate the advantages and disadvantages of adopting them.



- Simulate numerically the dynamics of an economy resulting from a simple theoretical modelization of the observed behavior of economic agents.



- Assess the objectives, methodology, results and conclusions of case studies proposed by the lecturer.

Topics

1.- Introduction.

2.- A dynamic general equilibrium macroeconomic model.

3.- Growth.

4.- Fiscal Policy: Taxes and Social Security.

5.- Monetary Policy.

Class notes and problem sets will be posted on the course eGela site. Students are strongly encouraged to visit regularly that site for updates and announcements.

• Continuous Assessment System
• Final Assessment System
• Tools and qualification percentages:
  • Written test to be taken (%): 70
  • Active participation and performance in the activities proposed by the instructors in class such as problem sets, assignments and midterm exams. (%): 30

CONTINUOUS ASSESSMENT SYSTEM

For the ordinary call, a continuous assessment system will be available. Under this system, the final grade will consider the evaluation of each of these activities:



- A final exam. This exam will account for 70% of the final grade.

- Active participation and performance in the activities proposed by the instructors in class such as problem sets, assignments and midterm exams. This part will account for 30% of the final grade.



FINAL ASSESSMENT SYSTEM

All students will have the chance to take a final exam accounting for 100% of the grade for the ordinary call in May/June. The final exam will be taken on-campus. If for any reason the UPV/EHU decided that an on-campus exam were not recommended, the exam format might change. The instructor would let students know about changes in the assessment policy as soon as possible.



FINAL GRADE

The final grade will be calculated as the maximum between the grade under the continuous assessment system and the grade under the final assessment system.

For the extraordinary call, the grading will be based on a single final exam that will represent 100% of the grade. The final exam will be taken on-campus. If for any reason the UPV/EHU decided that an on-campus exam were not recommended for the second call, the exam format might change. The instructor would let students know about changes in the assessment policy as soon as possible.

Class notes, problem sets posted on eGela and text books in the reference list.

Basic bibliography

Class notes.



Champ, B, S. Freeman y J Haslag (2011): "Modeling Monetary Economics", 3rd edition.Cambridge University Press.



Doepke, M., A. Lehnert y Andrew Sellgren (1999): "Macroeconomics", mimeo.



Krueger, D. (2007): "Dynamic Fiscal Policy", mimeo.



Sala-i-Martín, X (2000), Apuntes de Crecimiento Económico, 2ª Edición, Antoni Bosch.



Williamson, S. (2012): "Macroeconomía", 4 edición. Pearson.Addison Weasley.

In-depth bibliography

Diamond, Peter A. (1965): "National Debt in a Neoclassical Growth Model". American Economic Review, 55, pp. 1126-1150.

Lord, W. (2002): "Household Dynamics: Economic Growth and Policy", ed. Oxford University Press.

McCandless G.T. and N. Wallace (1995): "Introduction to Dynamic Macroeconomic Theory: An overlapping Generations Approach", ed. Harvard University Press.

Romer D.: "Macroeconomía Avanzada", ed. McGraw-Hill, 2ª edición, capítulo 2.B.

Wickens, M. (2008): Macroeconomic Theory: A Dynamic General Equilibrium Approach, Priceton University Press.

Web addresses

INE: http://www.ine.es/

European Central Bank: http://www.ecb.int/

Banco Mundial, http://www.worldbank.org/

Eurostat: http://europa.eu.int/comm/eurostat/

Eustat: http://www.eustat.es/

Banco de España: http://www.bde.es/

Bureau for Economic Analysis: http://www.bea.gov

World Bank, http://www.worldbank.org/