Course Abstract (including student assessment): This course will cover three topics in advanced macroeconomics. First, using already covered material on the neo-classical growth model and models with overlapping generations as well as models with idiosyncratic risks, we will discuss standard taxation problems, government debt dynamics and Ricardian (non-)equivalence. Second, we will extend the neo-classical framework to endogenize growth in different model variants such as models with endogenous human capital formation, models with expanding varieties and models with competitive innovations. Third, we will turn to a more detailed analysis of labour markets by studying search theory and some of its applications to labour markets.
In this course, students will learn how to employ dynamic models for a basic analysis of fiscal policy (most notably taxation and debt), how to endogenize growth in dynamic models through different growth channels and how to employ these models for policy analysis and how to characterise the behaviour of individual agents (e.g., job seekers) in a market with search frictions and how these choices aggregate to determine (potentially inefficient) macroeconomic outcomes.

Material

• Lecture Notes
• Selected Resarch Papers
• Acemoglu, Daron. Introduction to Modern Economic Growth, Princeton University Press, 2009
• Cahuc, Pierre, Carcillo, Stéphane and André Zylberberg. Labor Economics. MIT press, 2014
• Ljungqvist, Lars and Tom. J Sargent. Recursive Macroeconomic Theory, MIT Press, 2004
• Mortensen, Dale. Wage Dispersion: Why Are Similar Workers Paid Differently? MIT press, 2003
• Pissarides, Christopher A. Equilibrium Unemployment Theory. MIT press, 2000
• Romer, David. Advanced Macroeconomics, Mc Graw Hill, 2019

Syllabus
Lecture 1: Recap of the Solow-Swan, the Neoclassical Growth and the OLG Model
Literature: Acemoglu (Ch. 1-9), Romer (Ch. 1-2)
Lecture 2: Taxation, Debt and Ricardian (Non-)Equivalence
Literature: Ljungqvist / Sargent (Ch. 10), Romer (Ch. 2), Lecture Notes
Lecture 3: Human Capital and Economic Growth
Literature: Acemoglu (Ch. 10)
Lecture 4: The AK Model
Literature: Acemoglu (Ch. 11), Aghion/Howitt (Ch. 2)
Lecture 5: Growth with Expanding Varieties and Competitive Innovations
Literature: Acemoglu (Ch. 12-14), Aghion/Howitt (Ch. 3-4)
Lecture 6: Endogenous Labour Supply in Macroeconomic Models
Literature: Lecture Notes
Lecture 7: Basic Search Theory
Literature: Cahuc et al. (2014, Chap. 5.2)
Lecture 8: Equilibrium search and wage dispersion
Literature: Cahuc et al. (2014, Chap. 5.4), Mortensen (2003, Chap. 1 and 2)
Lecture 9: Job creation
Literature: Cahuc et al. (2014, Chap. 9.3), Pissarides (2000, Chap. 1)
Lecture 10: Competitive search
Literature: Cahuc et al. (2014, Chap. 9.4), Pissarides (2000, Chap. 8)