Macroeconomics II

• Intertemporal choices: consumption and savings 
• The real business cycle model
• Microfoundation of nominal rigidities:
  • asymmetric information
  • small menu costs
• The role of labour and financial markets imperfections on business fluctuations
  • Unemployment fluctuations and labour market dynamics
  • Credit rationing, credit cycles and systemic risk

The objective of the course is to develop the analytical tools to think about short-run macroeconomic policy issues. The course will first introduce the theory of intertemporal consumption choices that has a central role in modern macro, highlighting the role of uncertainty and liquidity constraints. It will then discuss the role of fiscal and monetary policy on business cycle fluctuations, both within the basic real business cycle model and New-Keynesian models of asymmetric information and imperfect competition with small menu costs. If time allows, the final part of the course will discuss the role of labour and financial markets frictions.

In presence

The course will discuss both economic theory models and the related empirical evidence in an interconnected way. At the end of the course, students will be able to understand and discuss macroeconomic issues and related policy implications.

Written exam