ECON5041 MACROECONOMIC THEORY II

This course covers state-of-art core materials of modern business cycle theories at the entry graduate level. The course is designed to equip students with the ability to use "Dynamic Stochastic General Equilibrium (DSGE)" framework in understanding business cycle fluctuations both positively and normatively. The course consists of two parts. In the first part, mathematical tools and historical backgrounds of business cycle theories are discussed. In the second part, the course focuses on topics that are at the core of understanding the nature of economic fluctuations and policy implications. Topics include real business cycles (RBC), optimal policy, new Keynesian framework (NK), search models for unemployment (McCall’s Search and DMP), Aiyagari Model and Krusell-Smith Model.