Methods of Macroeconomic Dynamics

Introduction and overview. Part 1 Traditional macrodynamics: a dynamic portfolio macroeconomic model. Part 2 Rational expectations: rational expectations - some basic issues; rational expectations and policy neutrality; nonuniqueness issues in rational expectations models; rational expectations and saddlepoint behaviour; the stability of government deficit financing under rational expectations; macroeconomic stabilization policy under rational expectations. Part 3 Intertemporal optimization: the representative agent model; equilibrium in a decentralized economy with distortionary taxes and inflation; a dynamic analysis of taxes; the representative agent model in the international economy; an introduction to endogenous growth models. Part 4 Continuous-time stochastic models: continuous-time stochastic optimization; a stochastic intertemporal model of a small open economy.