D16, Fall 2002
Advanced Macroeconomics
Christiano

Outline

1. Formulation and Estimation of a General Equilibrium Model for Macroeconomic Analysis

2. Model Solution Methods   
    a. Local Approximations: the Perturbation Method
        i. First order perturbations (linearization methods)
        ii. Higher order perturbations.
    b. Global Approximations.
    c. Shooting (Application to analysis of small open economy in wake of financial crisis.)

3. Analysis of Models:
    a. Ramsey Outcomes, With and Without Various Frictions
    b. Difficulties Achieving Ramsey Outcomes: the case of lack of commitment. Can this explain the observed periods of high and low inflation?

4. Other Possible Topics:
    a. Evaluation of Alternative Policy Rules
        i. Analysis of  'Global' Properties of Equilibrium in Monetary Models
        ii.'Escape Clauses' as a Device for Ensuring Good Outcomes.
    b. Theories of TFP.
    c. Filtering of Data: Theory and Application.

Grades: there will be homeworks and students are expected to write a paper. Suggested topics will appear on this web page.