Topics in Quantitative Macroeconomics

1 What are we doing? A class by class ex-post diary and a forecast of next class.

  1. Mar 13.

    We talk about the class and what it is about. We discuss what are the possible topics to cover (see below). I ask for volunteers to start presenting brief things. I start with heteroegeneity and business cycles:

    Bird’s Eye


  2. Mar 20.

    Sergio talked about Buera and Shin’s “Self-insurance vs. self-financing: A welfare analysis of the persistence of shocks”. Journal of Economic Theory, 2011. We saw what were the implications of the assumptions for the indiviudal agent in terms of the effective rate of return. Thanks Sergio.

    I then started looking at the problem of unsecured debt which is a problem of time inconsistency. We then saw how to obtain the solution of the Markov Perfect Equil with time inconsistency preferences as an introduction to the theoretical problem of sovereign default.

  3. Mar 27.

    Gorkem presented Rancière and Tornell (2016) on “Financial Liberalization, Debt Mismatch, Allocative Efficiency, and Growth”. Thanks Gorkem. We commented it together. I went on to present a quantitative model of banking regulation. Thanks Gorkem.

  4. April 3.

    Jinfeng presented Jones and Kim (2017) “A Schumpeterian Model of Top Income Inequality”. We commented it together. Thanks Jinfeng.

  5. April 10.

    Gabrielle will present Golosov, Hassler, Krusell, and Tsyvinski (2014): “Optimal taxes on fossil fuel in general equilibrium”. We commented it together. Thanks Gabrielle

  6. April 17.

    Desen will present Bianchi, Hatchondo and Martinez (2016): “International reserves and rollover risk”. We will comment it together.

  7. April 24.

    Seung-Ryong will present A Toolbox for Solving and Estimating Heterogeneous Agent Macro Models by Thomas Winberry. We will comment it together. Kian will also present some ideas for his upcoming job market paper.

2 Course Description

This course should be thought of as a Macro/Labor course with a close that should be of interest to people that care about both areas. Its main purpose is to link models and data i.e. to answer quantitative questions that we are interested in (in the process of doing so, some interesting theoretical questions arise). We will develop tools by stating general questions, and then discussing how to approach its answer.

This is a Ph.D. course not a Masters course. We are not here to learn about existing work but to learn about how to do work, and, therefore, it requires to do some things.

Format. Every class except the first one we will devote the first half an hour to 45 minutes or so to students presentations. I expect professional competence in this regard.

Depending on interest we may talk about other issues on this day:

Health Consumption and Inequality

Banking Dynamics and Capital Regulation

Organizational Equilibrium

The Generalized Euler Equation and the Bankruptcy–Sovereign Default Problem

3 Course Content

3.1 Heterogeneneity and Business Cycles

4 Course Requirements

5 Grading Rules and Registration.

To do superbly in the course, registered students have to do all the requirements well.

For those that do not register but take the course, I recommend that they do the homeworks. We learn to solve problems by facing them. Learning jointly with others greatly speeds the process.

In any case, the University is to help you learn and become a great economist not to issue grades, so use the course in the way you say it is best for you. If all equal, register so that there is evidence that the course is useful.