Ph.D. in Economics

Chulalongkorn University

Macroeconomics

1/2008

Instructor: Kornkarun Cheewatrakoolpong, Ph.D. and Tanapong Potipiti, Ph.D.

Office: ECON 215/1

Email: Kornkarun.K@Chula.ac.th

Office Hour: by appointment

Required Textbooks :

There are no required textbooks for this course. The lecture will follow these reading:

-     Rody Manuelli (2007), Notes on Discrete Time Dynamic Models

      (Downloadable from http://www.ssc.wisc.edu/%7Emanuelli/712/dynoptmfall07.pdf)

-  Sargent (1987), Dynamic Macroeconomic Theory Chapter 1-2, Harvard University Press.

Recommended Textbooks:

The following textbooks are recommended but not required.

-          Ljungqvist and Sargent (2004), Recursive Macroeconomic Theory

-          Sargent (1987), Dynamic Macroeconomic Theory

Homeworks:

Problem set#1

Problem set#2

Handouts:

Lecture 1

Lecture 2

Tentative Outline:

Part I : Mathmatics (2 lectures)

Part II : Growth Model (4 lectures)

1. Review of traditional growth theories
2. Dynamic Optimization in the growth model

-       Two Period Model

-            Steady state analysis

-          Dynamic paths

-          Tax and spending policy

Part III: Dynamic Programming (4 lectures)

1. Finite horizontal model

-          Recursive problem

-          Bellman’s method

2. Infinite horizontal model

-          Envelope Theorem

-          Contraction Mapping Theorem

-          Characterization of the value function

-          Guess and verify method

3. Application of Dynamic Programming

-          Search

-          Real Business Cycle

Part IV: Numerical Method (3 lectures)

-          Log Linearization and Linear Approximation

o        Matrix Decomposition Technique

o        Guess and Verify Technique

The section will follow the note here.

http://pioneer.netserv.chula.ac.th/~ptanapo1/numer/pastnote1.pdf