The objective of this course is to study techniques to analyze macroeconomic issues such as economic growth, investment, the effect of government policies, and asset pricing.
We start with economic growth. We discuss the evolution of the standards of living over the years. We solve problems of optimal growth formulated as optimal control problems in continuous time. We study topics such as the evolution of capital, human capital, and the allocation of resources.
We then focus on models formulated recursively, in a way in which agents decide their next action based on the realization of the current state. Most of the course focuses on this part. This formulation is especially useful to study economies under uncertainty. We will see applications to topics such as growth under uncertainty, monetary economics, and asset pricing.
- Teacher: Andre Silva