Short Course

The following survey of DSGE models was given in 7 ½ hours of lectures. The survey comes in two parts: part 1 and part 2. The survey covers the following topics:

· SVARs: what they are and what you get from them with a particular set of identifying assumptions.

· Fitting a model to SVAR impulse response functions: model specification, estimation results and indications about how the model might be tested on panel data sets of firms.

· Additional model development:

1. labor markets: a sketch of an approach

2. financial frictions: detailed discussion with two applications – evaluation of John Taylor’s proposal for how the Fed should respond to an increase in yield spreads; and a study of a mechanism by which a conventional monetary policy strategy may lead to excessive volatility in asset prices.