Applied Macroeconomics

Course Type: Graduate/Professional 

Course Description: This course introduces open-economy macroeconomics at an intermediate level, focusing on how economies interact through trade and financial flows. It is organized from the perspective of a small open economy. Topics include the balance of payments and the international investment position, current account dynamics and sustainability, and the intertemporal theory of current account determination

Mathematical Prerequisites: Basic Algebra, Basic Calculus

Note: The contents for each session may change depending on how the course progresses 

Grades: Class Exercise 1 (20%), Class Exercise 2 (20%), Final Exam (60%)

Main Textbook: "International Macroeconomics: A Modern Approach" by Stephanie Schmitt-Grohé, Martín Uribe, and Michael Woodford (click here) 

Lecture Slides: Click here

Schedule: 

Session 1 - A course introduction; global imbalances; the balance of payments

Session 2 - The balance of payments: the current account, the financial account, and the capital account

Session 3 - A deeper look at the current account; the international investment position

Class Exercise 1

Session 4 - Current account sustainability; current account identities and macroeconomic linkages

Session 5 - An introduction to a small open economy; the intertemporal budget constraint

Session 6 - Indifference curves; optimal intertemporal consumption allocation

Session 7 - Interest rate parity; equilibrium in a small open economy model

Session 8 - Effects of output and world interest rate shocks

Session 9 - An analytical solution to a small open economy model

Class Exercise 2

Session 10 - A review of the course