DECO 27A28 - Intermediate Macroeconomics: Evidence, Theory and Policy

This course covers the foundations of the theory of modern macroeconomics. The goal will be to build simple analytical models to be used as ”laboratories” to understand the macroeconomy. These models can help interpret past data, consider future trends, and analyze the effects of fiscal and monetary policies.

We will build models where economic agents behave optimally and interact in general equilibrium. We will use these models to discuss long-run growth and short-run fluctuations of economic aggregates. A central theme will be to understand the power and limitations of macroeconomic policy in stabilizing the business cycle and promoting growth.

The main objectives of the class are as follows:

• Gain a solid understanding of the core concepts in macroeconomics;
• Develop a simple formal framework to understand long-run and short-run determinants of key aggregate variables;
• Develop model-based intuition to analyze macroeconomic policy;
• Discuss recent advances in macroeconomic research to get first insights into the nature of the field.

The prerequisite for this course is the core economics course in the first year. This course will use some basic mathematic tools that are common in any modern economic course.

There are two group assignments, each gets a 25% weight in the final grade. Both group assignments involve downloading and working with data. There is one (exam-style) assignment to be handed in at the end of the course, which gets a 40% weight in the final grade. Active participation during the lectures gets a 10% weight in the final grade.