Syllabus

Models and questions with representative agents

1. Introduction. Definition of Recursive Competitive Equilibrium (standard macro books :Stokey and Lucas, [1989], Harris, [1987], Ljungqvist and Sargent, [2000]).
2. Bargaining and Labor Hoarding (Burnside, Eichenbaum, and Rebelo, [1990]),
3. The Representative Agent economy with search frictions and vacancy postings (Cheron and Langot, [2004], Andolfatto, [1996], Merz, [1995]).
4. Centralized bargaining. Stole and Zwiebel, [1996].
5. The use of lotteries to model the extensive margin in aggregate fluctuations (Hansen, [1985], Rogerson, [1988], Osuna and Ríos-Rull, [2003]).
6. Capital Skill Complementarity (Krusell, Ohanian, Rios-Rull, and Violante, [2000]).
7. The log linear approximation (Klein, [2000], Uhlig, [1999]).
8. Models with two types of labor in production or with putty clay technology (Choi and Ríos-Rull, [2008]).

   Models and questions with heterogenous agents
9. A discussion of Wages over the life cycle. Various theories. Hormones, (Ríos-Rull, [1996]), learning by doing, learning by not doing (Alvarez-Albelo, [2004]), non-convexities, educational attainament (Ríos-Rull, [1993]), shocks (Heathcote, Storesletten, and Violante, [2004]), ability differentials (Huggett, Ventura, and Yaron, [2007]).
10. Overlapping Generations. The exponential population model or Blanchard's Overlapping generations. The standard overlapping generations model. Hybrids. (Ríos-Rull, [1998]).
11. Incomplete markets.

    Family Matters
12. Changes in Family Status. Cubeddu and Ríos-Rull, [2003], Cubeddu and Ríos-Rull, [1996].
13. Measuring altruism and equivalence scales Hong and Ríos-Rull, [2007a], Hong and Ríos-Rull, [2007b], Hong, [2006].
14. Theories of Family formation Regalia and Ríos-Rull, [2001], Greenwood and Guner, [2004], Ríos-Rull and Wong, [2003], Ríos-Rull and Seitz, [2003].
15. Intrahoushold allocation. Browning and Chiappori, [1998], Browning, Bourguignon, Chiappori, and Lechene, [1994], Knowles, [2008].

    Technical Computational Things
16. Chebychev approximations. Judd, [2002]
17. Smolyak Polynomials. Krueger, Kubler, and Malin, [2007]

• Cooley and Prescott, [1995]. It is now dated but it contains some important lines of attack on business cycles. The computational techniques are a little bit obsolete, but the questions less so.
• Muthoo, [1999]. A relatively easy textbook on bargaining.
• Osborne and Rubinstein, [1990] is another useful textbook on bargaining.

• Judd, [1998]. is a general computational textbook with special attention to economists. While it is short on some details that we care about (complicated equilibrium considerations, multidimensional value functions, multidimensional interpolation) it is a very useful book for many topics.
• Marimon and Scott, [1998]. It has a bunch of chapters that deal with specific problems. I find the continuous time chapter nice as well as some scattered other chapters.
• Miranda and Fackler, [2002]. It is quite a nice book. Like others it is too irrelevant in some places and too easy in others. It is designed for matlab which is a pity, but it has a nice implementation (via a <a href="http://www4.ncsu.edu/unity/users/p/pfackler/www/compecon/toolbox.html" > downloadable toolbox</a>) of function global approximations.
• Heer and Maußner, [2004]. This is a nice book with a lot more economics than the others. Its consideration of the theory is closest to what we do. It has also many examples. Parts can be found <A HREF="http://www.uni-bamberg.de/sowi/economics/heer/engindex.htm» here.</a>
• Press, Teukolski, Vetterling, and Flannery, [1992]. The classic book for numerical analysis. Very useful.

References

ALVAREZ-ALBELO, C. D. (2004): "Endogenous versus exogenous efficiency units of labour for the quantitative study of Social Security: two examples," ael, 11, 693-397.

ANDOLFATTO, D. (1996): "Business Cycle and Labor Market Search," American Economic Review, 86(1), 112-132.

BROWNING, M., F. BOURGUIGNON, P. CHIAPPORI, AND V. LECHENE (1994): "Income and Outcomes: A Structural Model of Intrahousehold Allocation," Journal of Political Economy, 102(6), 1067-1096.

BROWNING, M., AND P.-A. CHIAPPORI (1998): "Efficient Intra-Household Allocations: A General Characterization and Empirical Tests," Econometrica, 66(6), 1241-1278.

BURNSIDE, C., M. EICHENBAUM, AND S. REBELO (1990): "Labor Hoarding and the Business Cycle," Working Paper 3556, NBER.

CHERON, A., AND F. LANGOT (2004): "Labor Market Search and Real Business Cycles: Reconciling Nash bargaining with the Real Wage Dynamics," Review of Economic Dynamics, 7(2), 476-493.

CHOI, S.-K., AND J.-V. RíOS-RULL (2008): "The Labor Share: Disciplining Device for RBC Models?," Mimeo, University of Pennsylvania.

COOLEY, T. F., AND E. C. PRESCOTT (1995): "Economic Growth and Business Cycles," in Frontiers of Business Cycle Research, ed. by T. F. Cooley, chap. 1. Princeton University Press, Princeton.

CUBEDDU, L. M., AND J.-V. RíOS-RULL (1996): "Marital Risk And Capital Accumulation," Unpublished Manuscript, University of Pennsylvania.

  (2003): "Families as Shocks," Journal of the European Economic Association, 1(2-3), 671-682, (Papers and Proceedings of the Seventeenth Annual Congress of the European Economic Association, Venice, 21-24 August 2002).

GREENWOOD, J., AND N. GUNER (2004): "Marriage and Divorce since World War II: Analyzing the Role of Technological Progress on the Formation of Households,," Economie d’avant garde, Research Report No. 9, University of Rochester.

HANSEN, G. D. (1985): "Indivisible Labor and the Business Cycle," Journal of Monetary Economics, 16, 309-18.

HARRIS, M. (1987): Dynamic Economic Analysis. Oxford University Press.

HEATHCOTE, J., K. STORESLETTEN, AND G. VIOLANTE (2004): "The Cross-Sectional Implications of Rising Wage Inequality in the United States," CEPR Discussion Paper No. 4296.

HEER, B., AND A. MAUßNER (2004): DGE Models: Computational Methods and Applications. Springer-Verlag.

HONG, J. H. (2006): "Life Insurance and the Value of Spouses: Labor Supply vs. Household Production," Mimeo University of Rochester.

HONG, J. H., AND J.-V. RíOS-RULL (2007a): "Social Security, Life Insurance and Annuities for Families," Journal of Monetary Economics, 54, 118-140.

HONG, J. H., AND J. V. RíOS-RULL (2007b): "Social security, life insurance and annuities for families," Journal of Monetary Economics, 54(1), 118-140.

HUGGETT, M., G. VENTURA, AND A. YARON (2007): "Sources of Lifetime Inequality," Mimeo, University of Iowa.

JUDD, K. L. (1998): Numerical Methods in Economics. MIT Press.

  (2002): "Capital-Income Taxation with Imperfect Competition," American Economic Review, 92(2), 417-421.

KLEIN, P. (2000): "Using the Generalized Schur Form to Solve a Multivariate Linear Rational Expectations Model," Journal of Economic Dynamics and Control, 24(10), 1405-1423.

KNOWLES, J. (2008): "Why Are Married Men Working So Much?," Working Paper, Penn.

KRUEGER, D., F. KUBLER, AND B. MALIN (2007): "Computing Stochastic Dynamic Economic Models with a Large Number of State Variables: A Description and Application of a Smolyak-Collocation Method," Working Paper.

KRUSELL, P., L. OHANIAN, J.-V. RIOS-RULL, AND G. VIOLANTE (2000): "Capital-Skill Complementarity and Inequality," Econometrica, 68(5), 1029-1054.

LJUNGQVIST, L., AND T. SARGENT (2000): Recursive Macroeconomic Theory. MIT Press.

MARIMON, R., AND A. SCOTT (eds.) (1998): Computational Methods for the Study of Dynamic Economics. Oxford University Press.

MERZ, M. (1995): "Search in the Labor Market and Real Business Cycle," Journal of Monetary Economics, 36, 269-300.

MIRANDA, M. J., AND P. L. FACKLER (2002): Applied Computational Economics and Finance. MIT Press.

MUTHOO, A. (1999): Bargaining Theory with Applications. Cambridge University Press.

OSBORNE, M. J., AND A. RUBINSTEIN (1990): Bargaining and markets. Academic Press.

OSUNA, V., AND J.-V. RíOS-RULL (2003): "Implementing the 35 Hour Workweek by Means of Overtime Taxation," Review of Economic Dynamics, 6(1), 179-206.

PRESS, W. H., S. A. TEUKOLSKI, W. T. VETTERLING, AND B. P. . FLANNERY (1992): Numerical Recipes in Fortran 77 The Art of Scientific Computing. Cambridge University Press.

REGALIA, F., AND J.-V. RíOS-RULL (2001): "What Accounts for the Increase in Single Households and for the Properties of Fertility?," Mimeo, University of Pennsylvania. First version, 1998.

RíOS-RULL, J.-V. (1993): "Working in the Market, Working at Home and the Acquisition of Skills: A General Equilibrium Approach," American Economic Review, 83(4), 893-907.

  (1996): "Life Cycle Economies and Aggregate Fluctuations," Review of Economic Studies, 63, 465-490.

  (1998): "Computing Equilibria in Models with Heterogenous Agents," in Computational Methods for the Study of Dynamic Economics, ed. by R. Marimon, and A. Scott, chap. 9. Oxford University Press.

RíOS-RULL, J.-V., AND S. SEITZ (2003): "Sex Composition and Family Formation," Mimeo, University of Pennsylvania.

RíOS-RULL, J.-V., AND L. WONG (2003): "On the determinants of interracial marriages," Mimeo, University of Pennsylvania.

ROGERSON, R. (1988): "Indivisible Labour Lotteries and Equilibrium," Journal of Monetary Economics, 21, 3-16.

STOKEY, N. L., AND E. C. LUCAS, R. E. WITH PRESCOTT (1989): Recursive Methods in Economic Dynamics. Harvard University Press.

STOLE, L. A., AND J. ZWIEBEL (1996): "Intra-Firm Bargaining under Non-Binding Contracts," Review of Economic Studies, 63(3), 375-410.

UHLIG, H. (1999): "A toolkit for analysing nonlinear dynamic stochastic models easily," in Computational Methods for the Study of Dynamic Economies, ed. by R. Marimon, and A. Scott, chap. 3. Oxford University Press.