Macroeconomics I - JCM016

• Title: Makroekonomie I
• Guaranteed by: CERGE (23-CERGE)
• Faculty: Faculty of Social Sciences
• Actual: from 2022
• Semester: winter
• E-Credits: 9
• Examination process: winter s.:
• Hours per week, examination: winter s.:4/2, Ex [HT]
• Capacity: 14 / unknown (20)
• Min. number of students: unlimited
• 4EU+: no
• Virtual mobility / capacity: no
• State of the course: taught
• Language: Czech
• Teaching methods: full-time
• Teaching methods: full-time
• Note: course can be enrolled in outside the study plan; enabled for web enrollment; priority enrollment if the course is part of the study plan
• Guarantor: prof. Ing. Michal Kejak, M.A., CSc.
• Teacher(s): doc. Mgr. Marek Kapička, Ph.D.; prof. Ing. Michal Kejak, M.A., CSc.
• Is pre-requisite for: JCM017

Descriptors

Last update: Mgr. Anna Papariga (15.09.2022)

Part I

This course will be an introduction to the techniques and the applications of dynamic general equilibrium models. In the first part of the course we will cover basic methods of solving dynamic models, including dynamic programming. This course will apply the techniques of dynamic general equilibrium models to the analysis of labor markets.

Part II

This course will be an introduction to the techniques and the applications of dynamic general equilibrium models. In the first part of the course we will cover basic methods of solving dynamic models, including dynamic programming. This course will apply the techniques of dynamic general equilibrium models to the analysis of labor markets.

Literature

Last update: Mgr. Anna Papariga (15.09.2022)

Part I

The following books will be useful throughout the whole first year macroeconomics sequence. 

·         (SLP) Nancy L. Stokey, Robert E. Lucas, Jr., and Edward C. Prescott. Recursive Methods in Economic Dynamics, Cambridge: Harvard University Press, 1989.

·         (LS) Lars Ljungqvist and Thomas J. Sargent. Recursive Macroeconomic Theory, The MIT Press, Cambridge, Massachusetts, 4th edition, 2018.

·         (SS) Thomas J. Sargent and John Stachurski. Quantitative Macroeconomics. https://lectures.quantecon.org. This online source is useful for the computational aspects of the course.

Part II

The textbooks for the course are:

Stokey, Nancy L., Robert E. Lucas, Jr., and Edward C. Prescott: Recursive Methods in Economic Dynamics. Cambridge: Harvard University Press, 1989.

 

Ljungquist, Lars and Thomas J. Sargent: Recursive Macroeconomic Theory. Second Edition. MIT Press. 2004.

 

Additional reading materials and the related readings will be made available later.

Requirements to the exam

Last update: Mgr. Anna Papariga (15.09.2022)

Part I

Grades will be based on four problem sets (40% of the grade for my part of the course), and a midterm exam on Friday November 11 (60% of the grade for my part of the course). There is no make-up for the midterm exam. Basic knowledge of Matlab will be required to solve some of the problem sets.

Copying someone else’s problem set solution (either in part or in full) will result in zero points for the whole problem set. Doing so repeatedly or cheating on the midterm exam action will result in an F grade in this course. 

Part II

The grades will be determined as follows: homework 10%; final 90%.

Syllabus

Last update: Mgr. Anna Papariga (15.09.2022)

Part I

1.       Neoclassical Growth Model

·         Robert King and Sergio Rebelo.“Transitional Dynamics and Economic Growth in the Neoclassical Model,” The American Economic Review, 83(4): 908–931, 1993.

·         Timothy J. Kehoe and Edward C. Prescott (2002). „Great Depressions of the Twentieth Century,” Review of Economic Dynamics, 5:1–18.

·         Kaiji Chen, Ayse Imrohoroglu, and Selahattin Imrohoroglu. „The Japanese Saving Rate.” American Economic Review, 96(5): 1850–1858, 2006.

·         Per Krusell, Lee Ohanian, Victor Ríos-Rull and Gianluca Violante. „Capital-Skill Complementarity and Inequality: A Macroeconomic Analysis,“ Econometrica, 68: 1029–1054, 2000.

·         Loukas Karabarbounis and Brent Neiman. „The global decline of the labor share,“ The Quarterly Journal of Economics 129: 61–103, 2014.

·         Charles Jones. „Pareto and Piketty: The Macroeconomics of Top Income and Wealth Inequality,“ Journal of Economic Perspectives, 29: 29-46, 2015.

 

 

2.      Labor Search

·         Richard Rogerson, Robert Shimer, and Randall Wright. “Search-theoretic models of the labor market - a survey,” National Bureau of Economic Research, 2004.

·         Kenneth Burdett, and Dale T. Mortensen. “Wage differentials, employer size, and unemployment,” International Economic Review, 257-273, 1998.

·         Robert Shimer. “The Cyclical Behavior of Equilibrium Unemployment and Vacancies,” American Economic Review, 25-49, 2005.

·         Marcus Hagedorn and Iurii Manovskii. “The Cyclical Behavior of Equilibrium Unemployment and Vacancies Revisited,” American Economic Review, 1692-1706, 2008.

 

 

Part II

Course outline

• Deterministic dynamic optimization problems.

a.       Canonical model.

b.       Efficient Allocations.

i.        Sequence Approach.

ii.      Function Space and Dynamic Programming.

c.       Properties of Solutions.

d.       Numerical Methods.

 

• Equilibrium Concepts.

a.       No Uncertainty.

i.        Sequence concepts:

A.     Date 0 Arrow-Debreu.

B.      Sequence-of-Markets.

ii.      Recursive Competitive Equilibrium.

b.      Adding Uncertainty.

 

• Application: Growth Theory.

a.       Exogenous Growth.

b.      Endogenous Growth.

c.       Overlapping Generations.

 

• Asset Pricing and Risk Sharing.
• Introducing Financial Frictions (if time permits).