The course will be very applied: students need to do the actual solving, analyzing, simulating, etc. on the computer (in Matlab)

Methods: 

• ( Log-)linearlization of nonlinear systems of equations
• Math related to solving linear rational expectations systems of difference equations
• User friendly 'packages' to solve, analyze and simulate DSGE models with 1st or 2nd order perturbation methods:
• Schmitt-Grohe and Uribe package
• Dynare
• Uhlig toolkit
• (selective nonlinear solution methods: only if time permits)
• (Bayesian estimation of DSGE models: only if time permits)

Models/ Applications:

• Basic Real Business Cylce models
• basic New Keynesian model
• Macro models with financial frictions
• Search and Matching models
• Small Open Economy/ Two-Country models

40%: 2 Problem Sets (in groups of 2 or 3)

50%: 1 individual term paper (own research question or replication of a recent state-of-art published paper in macro, to be assigned)

10%: active class participation

MA knowledge in dynamic macroeconomics; this includes, in particular, the mathematical background knowledge on solving difference equations and systems of difference equations (on the level of standard textbooks on mathematics for economists, such as Alpha C. Chiang or Simon and Blume)