ECON 210B - Winter 2012

Macroeconomic Theory (Prof. Davide Debortoli)

Classes: MW 10:00-11:20am, ECON 300 TA: Myungkyu Shim, SH 144
Office Hours: Thu, 2:00-3:00pm, ECON 225 Review Sessions: Fri, 12-1pm, ECON 300

What are we doing each day

1. Monday, Jan 9: We went over the syllabus, motivating to study economic fluctuations. We reviewed the different approaches taken to study business cycles over the past two centuries. We discussed alternative detrending methods (linear trend, BP filter and HP filter).

2. Wednesday, Jan 11: We illustrated the business cycle properties of some relevant variables, and introduced the basic RBC model, discussing the necessary assumptions and functional forms.

3. Wednesday, Jan 18: We developed the basic RBC models, and discussed alternative solution methods.

4. Thursday, Jan 19: We described the steady-state properties of the RBC model, and derived the log-linearization around the steady-state of the equilibrium conditions.

5. Monday, Jan 23: We have reviewed the Blanchard-Kahn (1980) conditions for existence and uniqueness of a solution. After showing how to solve the model using the method of undetermined coefficients, we have illustrated how to compute second moments and impulse responses.

6. Wednesday, Jan 25: We have seen the main implications of the baseline RBC model in terms of volatilities and standard deviations, and discussed the main criticisms.

7. Monday, Jan 30: We talked about VARs, looking at different identification schemes like Cholesky decomposition and Long-Run restrictions [Blanchard and Quah (1988)].

8. Wednesday, Feb 1: We have analyzed the RBC model with indivisible labor, and talked about search and matching friction models.