Topics in Macroeconomics
Postgraduate: Level 8
Thursday 03 October 2019
Saturday 14 December 2019
11 July 2019
Requisites for this module
This module is for post-graduate research students in the Department of Economics. In the first half of the course we will analyse the implications of search frictions for the labour market. In particular, we will analyse the existence of unemployment and of wage dispersion across similar workers. We will develop the main tools of the search and matching approach, and we discuss both theoretical and empirical literature. We will look at some or all of the following topics (depending on progress through the term):
- Job Search Theory
- On-the-job Search and Wage Posting
- Sequential Auctions and Individual Bargaining
- Sorting in the Labour Market
- Firm-worker Contracting
In the second half of the course we will study normative and positive aspects of dynamic fiscal policy with a particular focus on government debt. After a short introduction to quantitative macroeconomics using the software Matlab, we look at fiscal policy chosen by governments that (i) face political economy distortions, i.e., cannot commit beyond the current tax, expenditure, and debt policies; (ii) are subject to limited commitment, i.e., may strategically choose not to honour the outstanding debt obligations. Specifically, we will look at some or all of the following topics (depending on the progress through the term):
- Standard solution methods for dynamic economic problems: value function iteration, time iteration, function approximation.
- The political economy of government debt accumulation.
- Sovereign debt and default.
The primary objective is for students to acquire the necessary tools for modern macroeconomic analysis. This requires close study and understanding of recent research outputs. For some topics we will rely upon some advanced mathematics or quantitative methods (especially, dynamic programming), which will be explained in class as we go along.
Upon successful completion of this course, students will have acquired a grasp of the main issues, theories, and tools facing modern macroeconomists. In particular, they will be able to critically assess the role of macroeconomic policy in the short and long run.
No additional information available.
The course will consist of one 2-hour lecture and one 2-hour practical class per week, over 10 weeks. The practical class will be computer based. During these classes we will go through computational problems that arise from the lecture materials.
Assessment will be based on 4 pieces of coursework. These will typically, but not necessarily always, be based on analytical and computational problems related to those discussed in the lectures and classes.
Students will give one presentation in the last part of the course. They can choose to present either their own work in progress, or discuss an existing research paper that is course-related.
- Pissarides, Christopher A. (c2000) Equilibrium unemployment theory, Cambridge, Mass: MIT Press.
- Postel-Vinay, Fabien; Robin, Jean-Marc. (2002-11) 'Equilibrium Wage Dispersion with Worker and Employer Heterogeneity', in Econometrica. vol. 70 (6) , pp.2295-2350
- A. Alesina; A. Passalacqua. (2016) 'The Political Economy of Government Debt', in Handbook of macroeconomics, Amsterdam: Elsevier. vol. Handbooks in economics, pp.2599-2652
- Mark Aguiar; Manuel Amador. (2014) 'Sovereign Debt', in Handbook of international economics, Amsterdam: North Holland. vol. Handbooks in economics, pp.647-688
- Mario J. Miranda; Paul L. Fackler. (2002) Applied computational economics and finance, Cambridge, Mass: MIT Press.
- Mortensen, Dale. (c2003) Wage dispersion: why are similar workers paid differently?, Cambridge, Mass: MIT Press.
- Postel-Vinay, Fabien; Robin, Jean-Marc. (2002-11) 'The Distribution of Earnings in an Equilibrium Search Model with State-Dependent Offers and Counteroffers*', in International Economic Review. vol. 43 (4) , pp.989-1016
The above list is indicative of the essential reading for the course. The library makes provision for all reading list items, with digital provision where possible, and these resources are shared between students. Further reading can be obtained from this module's reading list.
Assessment items, weightings and deadlines
|Coursework / exam
Additional coursework information
2 student presentations.
Exam format definitions
- Remote, open book: Your exam will take place remotely via an online learning platform. You may refer to any physical or electronic materials during the exam.
- In-person, open book: Your exam will take place on campus under invigilation. You may refer to any physical materials such as paper study notes or a textbook during the exam. Electronic devices may not be used in the exam.
- In-person, open book (restricted): The exam will take place on campus under invigilation. You may refer only to specific physical materials such as a named textbook during the exam. Permitted materials will be specified by your department. Electronic devices may not be used in the exam.
- In-person, closed book: The exam will take place on campus under invigilation. You may not refer to any physical materials or electronic devices during the exam. There may be times when a paper dictionary,
for example, may be permitted in an otherwise closed book exam. Any exceptions will be specified by your department.
Your department will provide further guidance before your exams.
Module supervisor and teaching staff
Ran Gu and Andreas Mueller
Dr Francis Kiraly
Available via Moodle
Of 100 hours, 50 (50%) hours available to students:
50 hours not recorded due to service coverage or fault;
0 hours not recorded due to opt-out by lecturer(s).
Disclaimer: The University makes every effort to ensure that this information on its Module Directory is accurate and up-to-date. Exceptionally it can
be necessary to make changes, for example to programmes, modules, facilities or fees. Examples of such reasons might include a change of law or regulatory requirements,
industrial action, lack of demand, departure of key personnel, change in government policy, or withdrawal/reduction of funding. Changes to modules may for example consist
of variations to the content and method of delivery or assessment of modules and other services, to discontinue modules and other services and to merge or combine modules.
The University will endeavour to keep such changes to a minimum, and will also keep students informed appropriately by updating our programme specifications and module directory.
The full Procedures, Rules and Regulations of the University governing how it operates are set out in the Charter, Statutes and Ordinances and in the University Regulations, Policy and Procedures.