Business Cycle Theory and Policy

The course introduces students to two modern theories of business cycles: Real Business Cycle theory and New Keynesian theory. Students learn to understand, apply and solve these structural macroeconomic models. In particular, they learn dynamic optimization and loglinearization techniques fundamental to the solution and analysis of these models. Students also learn to use and apply the numerical analysis programs like Matlab and Dynare. Finally, the students learn how to use these two models for policy analysis.