Syllabus of Econ 704, Spring 20

This course complements the rest of 702-704. In my view, the ultimate goal of this course is to learn to use a variety of models that can be used to give quantitative answers to economic questions. The models can generate artificial data of both allocations and prices that can be meaningfully related to actual data. In this course most (if not all) of the material will be studied from the strict point of view of the theory, so we will not look at data in any serious manner nor at solving the models with the computer. The emphasis is on economic rigor, i.e. the target is to learn tools that will be useful later. The course, then, is not a survey of topics in macroeconomics. When some specific topic is addressed the objective is not to give a review of known results but rather to give an example of how an issue is addressed and of how tools are used.

There will be recitations once a week. These will be used either to introduce some mathematical apparatus that we need, to solve homeworks, or to explore issues related to those presented in class. The material covered in recitations constitutes part of the required curriculum.

In the context of the course, I will assign some homeworks: usually I will ask you to prove something during a lecture, sometimes they will be posted in the homepage. These problems are not required but will give you an idea of what is expected for the exams, and especially for the prelim. The grades will be based 33% on some form of midterm, date and format to be determined, and 67% on a final date and format to be , date and format to be determined. Ricardo will give you feedback regarding the homeworks. He may post them on the web as well as post answers to it at a later day. Or he may not. We will see about it.

No special textbooks. There are notes from previous years and Ricardo post class notes of this year’s class. It never hurts to have the usual suspects, but I do not dwell on them. Besides those used and recommended by my colleagues, there is a good little book (out of print actually) that is useful, Harris-87. The papers that I cite (in a very incomplete form below) are not to be read in general, although some students may find them useful. A fantastic book is being written now by Per Krusell. We will occasionally use bits of it. First year is to learn tools, not to read papers.

This list is of material that I want to go over. The first few items you have seen in a very similar way, so I will go very fast over it, but I find it very useful to go over them again.