ECON41620 Advanced Macroeconomics

Academic Year 2023/2024

The main focus in this course will be on how modern macroeconomists attempt to model and understand time series fluctuations in the major macroeconomic variables. Given the importance of recent financial sector developments, we will also discuss some models involving financial frictions and crises. The module is broken into three components.1. Time Series and Macroeconomics: How time series can be used as a framework for the questions of modern macroeconomics. Vector Autoregression (VAR) models as a way of understanding how various types of shocks affect the macroeconomy.2. Dynamic Stochastic General Equilibrium (DSGE) models: These are the leading class of models currently used to explain macroeconomic fluctuations: We will discuss how to formulate these models and simulate them on a computer. Two main classes of DSGE models will be presented: Real Business Cycle models and New-Keynesianmodels.3. Modelling Financial Factors: Financial intermediation, risk spreads, financial frictions in DSGE models, asymmetric information and credit rationing, banking crises, banking regulation, systemic risk.

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Curricular information is subject to change

Learning Outcomes:

The module will teach students how professional marcoeconomists think about the economy. It will also allow students to master technical methods that will enable them to read and understand state of the art material in macroeconomics. MATLAB software will be used for empirical applications.

Indicative Module Content:

VAR series, macroeconometrics
The neoclassical RBC dicentralised general equilibrium model
The New-Keynesian DSGE model
Criticism and the future of modern macroeconomics
Fiscal and Taxation policy

Student Effort Hours: 
Student Effort Type Hours


Autonomous Student Learning




Approaches to Teaching and Learning:
Lecture in class: 2 hours per week
Enquiry & problem-based learning: The students need to give the solution of the questions asked in class. During the lecture, they will be provided feedback on their answers.
Debates and case-based learning: Students will be presented with real economic examples and they will be asked to debate on whether the models described in class can explain those examples. They will also be asked to debate on supporting or criticizing the recent macroeconomic literature. 
Requirements, Exclusions and Recommendations

Not applicable to this module.

Module Requisites and Incompatibles
Not applicable to this module.
Assessment Strategy  
Description Timing Open Book Exam Component Scale Must Pass Component % of Final Grade In Module Component Repeat Offered
Class Test: 1 hour Class test on the material discussed up to now Week 6 n/a Graded No


Examination: 2 hour examination 2 hour End of Trimester Exam No Graded No



Carry forward of passed components
Resit In Terminal Exam
Summer Yes - 2 Hour
Please see Student Jargon Buster for more information about remediation types and timing. 
Feedback Strategy/Strategies

• Group/class feedback, post-assessment
• Online automated feedback

How will my Feedback be Delivered?

Group feedback will be delivered in class after the mid-term assessment.