Macroeconomic Theory II


Outline and Readings


I. Building the OLG Model (MW, chap. 1 and 2)

  • notation and environment
  • definitions
  • budget constraints and consumption/saving decisions
  • aggregate savings and competitive equilibrium condition
  • a two-country model

II. Introducing a Government (MW chap. 3)

  • taxes, transfers and social security schemes
  • optimal taxation
  • government consumption
  • deficit financing, government bonds
  • Ricardian equivalence
  • a two-country model

III. Introducing Multi-Period Assets (MW chap. 5)

  • long-term government bonds
  • temporary equilibrium
  • rational expectations
  • perfect foresight equilibrium
  • the term structure of interest rates

IV. The Neoclassical Growth Model (MW chap. 9)

  • production economy
  • equilibrium paths when there is no growth
  • equilibrium paths when there is population growth
  • equilibrium paths when there is technological growth
  • a two-country model

V. Stochastic OLG Model and Real Business Cycles (notes)


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