040068 UK Dynamic Macroeconomics with Numerics (MA) (2016S)

> The goal of this course is to get students familiar with the essentials of modern dynamic macroeconomic analyses: (1) Formulating dynamic macroeconomic models; (2) Solving the dynamic models either by analytical or numerical methods; and (3) Assessing the models' implications regarding the dynamics of aggregate economic time series. We will use mathematical and computational methods. In particular, the programming language MATLAB and the platform DYNARE will be introduced and used for computational purposes.

> Topics that will be covered include: optimal consumption-savings decisions; deterministic infinite-horizon macroeconomic models; the deterministic optimal growth model; the stochastic growth model; the RBC model; the New-Keynesian model; sovereign debt and default;

> Methods will include: Lagrangian approach; recursive approach; the contraction mapping theorem; value function iteration; policy function iteration; guess-and-verify approaches; log-linearization (Blanchard-Kahn procedure); estimation with maximum-likelihood methods; forecasting