The course is devoted to the analysis of business cycle fluctuations. This analysis is based on stochastic dy-namic general equilibrium models. The first objective is a good understanding of firms and households's in-tertemporal behaviors, and of the mechanisms by which economic shocks may generate business cycle fluctuations. The role of nominal and real rigidities should be clearly understood. Students should also learn how to assess the quantitative implications of these models by the means of calibration and simulation tech-niques.
Objet de l'activité (principaux thèmes à aborder)
More specifically, the main topics should include:
- households and firms's intertemporal behaviors;
- Pareto optimality and first welfare theorem;
- adjustment mechanisms in the open economy;
- real business cycle models;
- nominal rigidities and New Keynesian models;
- effects of monetary and fiscal policies.
Résumé : Contenu et Méthodes
1. Basic Intertemporal General Equilibrium Models
The Ramsey Model
Financing Government Expenditures
Investment and Savings in a Small Open Economy
2. Real Business Cycle Models
Observed Empirical Regularities
The Basic RBC Model
Evaluation and Extensions
3. Money in General Equilibrium Models
Monetary Shocks and Economic Fluctuations in a Model à la Sidrausky
Monetary Shocks and Imperfect Information: the Lucas Model
4. New Keynesian Models of the Business Cycle
Staggered Wage Contracts (Fisher and Tylor Models)
A Model with Monopolistic Competition and Calvo Contracts
Autres informations (Pré-requis, Evaluation, Support, ...)
ECON2021 Fluctuations économiques et fondements de la politique macro
homeworks and written exam (closed books)
Two main reference textbooks:
Blanchard O.J. and S. Fischer, Lectures on Macroeconomics, Cambridge (US): MIT Press, 1989.
Romer D., Advanced Macroeconomics, 3d ed., New York: McGraw-Hill, 2005.
Supplemented by lecture notes and reading list.
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