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This subject aims to provide students with a standard tool kit to analyse dynamic macroeconomic models and to give a detailed coverage of some important applications in macroeconomics. The subject is composed of four parts. Part I provides a brief review of the formal theory of dynamic optimization. Part II devotes to some general numerical techniques to solve and simulate a dynamic model. Part III introduces some econometric techniques that are used to estimate a structural model with data. Part IV focuses on applications of these techniques in some important research areas of macroeconomics, including real business cycle models and its various extensions, incomplete market models, firm dynamics models, monetary models.
Intended learning outcomes
Intended learning Outcomes
- Formulate a dynamic optimization problem recursively and conduct some analytical analysis;
- Numerically solve a dynamic model in a proper way;
- Parameterise the structural model such that it links to the data properly;
- Simulate the estimated model to derive model predictions;
- Be familiar with the literature on several important areas of macroeconomic research;
- Replicate and discuss a piece of economic analysis from a professional journal.
- Evaluation of ideas, views and evidence;
- Synthesis of ideas, views and evidence;
- Strategic thinking;
- Critical thinking;
- Application of theory to economic policy and business decision making;
- Summary and interpretation of information;
- Statistical reasoning;
- Problem solving skills;
- Collaborative learning and teamwork;
- Written communication;
- Numerical computing and simulation of economic models.
Last updated: 31 January 2024