ECON-4212 Short-term Advanced Macroeconomics

The student may choose between ECON4212 or ECON4213. The following course is given in the first semester of each year ECON4213 and ECON4212 is given in the second semester. Most topics presented are mainly (although not exclusively) focused on economic-cycle related issues. The first part of the course deals with the unemployment theory, natural unemployment rate, dilemma between inflation and economic activities, inflation and disinflation costs, target inflation schemes, monetary rules, delegation and reputation of central banks, as well as some interesting topics of today’s economic circumstance, as deflation and liquidity tramps, monetary policy and globalization, optimal accumulation of international reserves and costs and benefits of the monetary unions and the dollarization. The second part of the course is devoted to studying the basic elements of dynamic macroeconomics. The main objective is to make students understand the numerical theory and methods to write simple computer programs (MATLAB) and use them to solve quantitative questions concerning macroeconomics, public finances, money, growth, labor market, etc., within the framework of general dynamic equilibrium. The driving theory to be followed is that of the 1985 Novel Price Winner in Economics, Robert Lucas: "One of the functions of the theoretical theory is to provide artificial economic systems that may serve as laboratories in which different policies – otherwise very difficult to assess in the real world – and be tested at lower costs " (Lucas, 1980, p. 696).