topics in macroeconomics
In this course, we will review and extend the main conceptual frameworks in dynamic macroeconomics, in order to exploit their versatility to address different topics with policy relevance. Specifically, after a review of Solow’s growth model, the overlapping generations model, and the neoclassical growth model of infinitely-lived agents, we will address questions like: (1) Households bequest their children with assets and human capital, but do they choose the right mix? (2) People influence their life expectancy through health and life-style choices, while choosing savings for old age too, but can they make the best saving choices consistent with their life expectancy choices? (3) Since arguably productivity is influenced not only by investment but also some consumptions, is the aggregate capital the one supporting the best possible steady state? (4) Since fiat money is a bubble that rarely bursts but nonetheless can burst, are monetary equilibria actually efficient? (5) Since households’ fertility and education choices shape the future labor force, do their decentralized choices lead to the optimal mix of population size and human capital? (6) As some capital falls into the public domain, do the decentralized saving choices support the best steady state?... among others. For each of these questions we will look for a policy that could undo any market inefficiency that might result.