Macroeconomic Analysis (Consumption and Saving, Investment)
The basic dynamic centralized economy: optimal solutions; Euler equations; steady states and dynamics; balanced growth; real business cycle dynamics; The decentralized economy: consumption and savings; intertemporal budget constraint; general equilibrium, consumption smoothing, welfare theorems. Public finance and fiscal policy: government budget constraint, Ricardian equivalence, public debt sustainability, fiscal theory of the price level. Equilibria with tight debt limits, existence of outside money, welfare effects of fiscal and monetary policies and equilibrium indeterminacy with nominal assets. Overlapping generations, crowding out, intergenerational transfers and monetary equilibria. Consumption and saving under uncertainty: Euler equations, no-arbitrage with safe and risky assets, random-walk hypothesis and precautionary saving.
This course discusses the main macroeconomic issues, by presenting both the theories for each issue and the main emprical findings. The issues are: Economic growth, Business Cycles, the open economy or the balance of payments, and money and inflation.