SoSe 2024

Makroökonomik 2 / Makroökonomie 2

The language of the course is English. The course provides an introduction to advanced macroeconomics at the undergraduate level, serving as a bridge between intermediate-level macroeconomics (covered in BMAK) and graduate-level macroeconomics (covered in Fundamentals of Macroeconomics or PhD Macro). It is intended for undergraduates who have successfully completed BMAK and BMIK and who are now ready to study advanced topics in macroeconomics in greater analytical detail. The course objective is to deepen our understanding of fundamental macroeconomic problems and appropriate policies. After completing this course, students should be able to understand newspaper articles on stabilization and growth policies.

Highly successful students will be able to explain these articles to non-economists. Top students will be able to spot mistakes and to debate opinions expressed in the press.
Although the emphasis is on presenting the intuition behind macro theory, we will be using a combination of figures and mathematics to derive results, with more emphasis on mathematics than in BMAK. Knowledge of functions, derivatives, and constrained optimization, along with basic statistics is assumed.

Monetary Theory and Policy

This course introduces students to the dynamic stochastic general equilibrium (DSGE) models used in modern monetary macroeconomics called New Keynesian models. The basic model equations including nominal frictions such as price stickiness are derivedcarefully, and model solution techniques are discussed. Numerical solutions of the models are obtained and the models are simulated and analyzed using Dynare in MATLAB. Possible extensions to the core model that may be treated in class include an analysisof optimal monetary policy.

After completing the course, students should understand the dynamic mechanisms of nominal rigidities and the policy tradeoffs facing monetary policy. Mechanically, students will be able to derive, solve and simulate simple DSGE models and should be able toread and understand more elaborate models found in the literature.