Advanced Macroeconomics II.I

This course introduces students to the rigorous solution and analysis of structural real business cycle and of New Keynesian models. This course thereby has a twofold focus on models and techniques. We cover the abalytics of value function iteration, Howard’s Improvement and the linearization of rational expectations models. The students also learn local nonlinear approximation and perturbation methods. Moreover, we cover the derivation and possible extensions of the New Keynesian model and its usage for policy analysis.