Advanced Topics in Modern Macroeconomics

(3 Credits)

Much of modern macroeconomics is concerned with economic fluctuations (aggregate risk) and the role of markets and government policy in its allocation across individuals (individual risk). In this sense, the fields of macroeconomics and finance are closely intertwined. This course uses mathematical and statistical tools to throw a floodlight on some key issues: fiscal and monetary origins of the price level; interest rates; the stock market; intergenerational arrangements associated with social security; government debt; origins of financial crises and government policies to attenuate them; and unemployment, including its duration and distribution across people of different skills. The class will make extensive use of mathematical methods, including the method of dynamic programming, which provides insights into a host of situations in which individuals face intertemporal trade-offs.