Dynamic Macroeconomics (Summer 2026)
Graduate level (M.Sc./Ph.D.)
Description
This course provides an applied introduction to modern quantitative macroeconomics. Rather than treating numerical methods in isolation, we introduce computational tools as they are needed to solve progressively richer economic models. The focus is on heterogeneity, first across households and then across firms.
After solving these workhorse models, we discuss how to discipline them with data using simulated method of moments. We then use the models for counterfactual analysis, considering both steady state comparisons and transition dynamics.
The emphasis throughout is on understanding what the computer is actually doing: identifying the relevant state variables, equilibrium objects and fixed points and translating the economics into code. By the end of the class, students should be able to take a dynamic economic model from equations to a quantitative solution and understand the numerical steps required along the way.
Class times
Lectures: Tuesday 16:15-17:45 (HS L) and Wednesday 14:15-15:45 (HS F)
Extra (3) lectures: Fridays 12/19/26 June 14:15-15:45 (HS L)
Office hours: by appointment
Syllabus and reading list
Subject to change/addition
Tentative syllabus
Extra readings list
Lectures
Preliminaries
T1: Refresher on coding and numerical solutions slides lab
Dynamic household models
T2: Partial equilibrium representative household model slides lab appendix A appendix B
T3: General equilibrium representative household model slides lab vectorisation note
T4: Heterogeneous household model with idiosyncratic uncertainty slides lab
T5: Heterogeneous household model with aggregate uncertainty slides lab
Dynamic firm models
T6: Heterogeneous firm model with idiosyncratic uncertainty slides lab
T7: Heterogeneous firm model with aggregate uncertainty & local methods slides lab
Disciplining and using quantitative models
T8: Calibration and simulated method of moments slides lab
T9: Policy counterfactuals & perfect foresight simulations slides lab
In-class exercises (don’t look before doing in class!)
Freestyle coding 1 outline code
Freestyle coding 2 outline code
Mock exam paper suggested answers