Spring 2004

Topics in Macroeconomics

Kjetil Storesletten, University of Oslo, kjstore@econ.uio.no,+47 2284 4009

Course overview

Lectures:

• Lecture 1 (29/1/2004) Sequential trading and complete markets
  
• Notes Lecture 1 (from D. Krueger)
• Slides (from D. krueger)
  
• Lecture 2 (5/2/2004) Some basic optimization theory
  
• Notes Lecture 2 (from D. Krueger)
• Slides (from D. krueger)
  
• Lecture 3 (12/2/2004) Business cycle theory
• Notes Lecture 3 (from D. Krueger and F. Zilibotti)
  
• Lecture 4 (19/2/2004) Business cycle theory + female labor supply
• Lecture 5 (26/2/2004) Why do married women work so much? (Jones, Manuelli and McGrattan, 2003)
• Lecture 6 (4/3/2004) Fertility: Technological Progress and Economic Transformation (Greenwood and Seshadri, 2002)
  
• Lecture 7 (11/3/2004) Self-insurance (Ljungqvist and Sargent, Chapter 13)
  
• Lecture 8 (18/3/2004) Aiyagari-model (Ljungqvist and Sargent, Chapter 14) + Numerical methods: introduction (Floden's lecture notes 1)
• Lecture 9 (25/3/2004) Numerical methods: colloaction methods (Floden's lecture notes 2)
• Midterm homework Here are some matlab files that are useful (Due April 22)
• Lecture 10 (23/4/2004), Friday 16:15-18:00, Frisch Room (note different time). Discussion of homework.
• Lecture 11 (29/4/2004) Risk and consumption inequality (Consumption and Risk Sharing over the Life Cycle, Storesletten, Telmer and Yaron, 2004)
• Lecture 12 (6/5/2004) TBA
• Lecture 13 (19/5/2004) (Note: Wednesday) TBA

Topics covered:

1. Introduction to dynamic macro
• Sequential trading and complete markets
• Some basic optimization theory
• Business cycle theory
• Heterogenous agents
2. Risk and social insurance when markets are incomplete.
• A complete markets benchmark.
• How important is individual risk for agents' welfare? Should the government be involved in insuring this risk?
• What is the optimal design of social insurance schemes when agents have private information about their own situation and they act in a self-interested way? We will study the tension between supplying insurance and providing proper incentives for the agents, and examine the implications for the evolution of the welfare distribution across individuals. One particular application is the optimal design of unemployment compensation schem
3. Household economics
• Home production
• Labor supply
• Fertility
4. Political economy (if we have time)
   

Seminars:

Schedule

Classes are held Thursdays 10:15-12:00, starting January 29 (running until June 3).

Examination

There will be an in-class exam at the end of the course.

Students are encouraged to write a term paper.

Lecture plan

There will be ten lectures in total, plus six "seminar-sessions".

Reading list