Macroeconomic Analysis (Consumption and Saving, Investment)

Instructor: Gaetano Bloise, Pietro Reichlin
The basic dynamic centralized economy: optimal solutions; Euler equations; steady states and dynamics; balanced growth; real business cycle dynamics; labor supply and investment. The decentralized economy: consumption and savings; intertemporal budget constraint; general equilibrium and welfare theorems. Public finance and fiscal policy: government budget constraint, Ricardian equivalence, public debt sustainability. Asset pricing: no-arbitrage and market efficiency; consumption smoothing and permant income hypothesis; consumption based asset pricing; risk sharing and insurance.

Advanced Macroeconomics

Instructor: Luigi Pistaferri
The life cycle hypothesis; saving and growth; empirical implications in the macro and in the micro data. Consumption puzzles: Excess sensitivity, excess smoothness and excess growth. The importance of the income process; Anticipated and unanticipated income changes; income risk, income inequality and consumption inequality. Precautionary saving;  liquidity constraints; buffer stocks model; durables with adjustment cost: (S,s) models. Models of endogenous incomplete markets; Moral hazard and limited commitment; Empirical implications of private information Pareto optimality for asset pricing and real exchange rates. Intertemporal labor supply models; non-separability; labor supply and labor market friction. Job search: the standard McCall-Mortensen model; the Diamond’s paradox; equilibrium wage posting models; empirical implications.