The first part of the course aims to provide methodological tools for advanced research in macroeconomics. The emphasis is on theory, although data guides the theoretical explorations. Students will study models where behaviour is derived from basic assumptions on consumers’ preferences, production technologies and information; as well as alternative ways of solving dynamic optimisation problems.

The second half is an introduction to the dynamic general equilibrium approach to macroeconomics, which evolved from neoclassical macroeconomics and real business cycle theory to include many aspects of the aggregate economy, including rational expectations, the open economy, exchange rates, nominal rigidities, and monetary and fiscal policy.