ECOM 009 - Macroeconomics B

Instructor: Giulio Fella. Office hours: Monday 10-12 Room W302
Lectures: Friday 9-12, E303

The syllabus contains all the relevant information about the course.

Every Thursday I will post below a brief description of the topics covered in the week's lecture together with a link to the relevant set of lecture notes and problem set. All links are grouped at the bottom of this page (note that the links will be activated week by week).

  1. 21 March

    We analyzed a simple model of investment under fixed adjustment cost and covered the papers by Khan and Thomas (2008) and Bachmann, Caballero and Engle (2014). I have uploaded the solution to problem set 8.

  2. 14 March

    We finished covering the Abel-Hayashi model of investment under convex adjustment cost and discussed the empirical implications of the model in the light of the empirical evidence. I have uploaded the text of problem set 8 for next week the solution to problem set 7.

  3. 7 March

    We started the part on investment. We covered the Jorgensonian theory of investment and started the Abel-Hayashi model of investment under convex adjustment cost. I have uploaded the paper referred to at the begining of the lecture notes on QMplus. It is in the folder 'Investment'. I have uploaded the text of problem set 7 for next week and the solution to problem set 6.

  4. 28 February

    We discussed the consumption-based capital asset pricing model. I have uploaded the text of problem set 6 for next week and the solution to problem set 5.

  5. 14 February

    We studied the overlapping generation model and its implication for the correlation between aggregate saving and growth rates. We discussed Carroll and Summers's test of the model. We covered the conditions for dynamic inefficiency of the decentralized steady state equilibrium. I have uploaded the text of problem set 5 for next week.

  6. 7 February

    We discussed the model by Aiyagari (1994) and started the overlapping generations model. I have uploaded the text of problem set 4 which is due next week and the solution to problem set 3.

  7. 31 January

    We finished studying precautionary saving with exponential utility and no borrowing constraints. We saw how borrowing constraints also induce a precautionary saving motive and how impatience - beta*(1+r)<1 - is necessary for the consumption and wealth distribution to be bounded when income is uncertain. I have uploaded the text of problem set 3 which is due next week, the solution to problem set 2 and a math handout. Points 2. and 3. are two results that you need to answer question 2 in problem set 2. .

  8. 24 January

    We derived the solution of the permanent income model and discussed its empirical implications. I have uploaded the text of problem set 2, which is due next week and the solution to problem set 1.

  9. 17 January

    We finished discussing dynamic programming. We highlighted the main motives for saving. We introduced the permanent income model. I have uploaded the text of problem set 1, which is due next week.

  10. 10 Jan

    After some methodological preliminaries, we discussed dynamic programming and the conditions under which the solution to the sequence and recursive problem coincide.

Lecture notes: LN 1|LN 2|LN 3|LN 4|LN 5|LN 6|LN 7|LN 8|LN 9|LN 10 |LN 11

Problem sets: PSET 1|PSET 2|PSET 3|PSET 4|PSET 5|PSET 6|PSET 7|PSET 8|PSET 9|PSET 10