30/07/2026: Página atualizada.
Objective
Introduction to classic developments in macroeconomics. Students will deepen their knowledge to formulate and solve stochastic dynamic economic models and apply these techniques to several substantive issues in consumption, asset pricing, business cycle theory, monetary economics, and labor economics. The subject will also cover dynamic models with heterogeneous households and will use these models to analyze a range of issues, including income and wealth inequality. In addition, we will cover standard search theory.
Grading
Test (75%):
Presentation of a paper (25%):
Notes: Huggett (1993), Aiyagari (1994)
Codes:
Readings
İmrohoroğlu, A. (1992). The welfare cost of inflation under imperfect insurance. Journal of Economic Dynamics and Control, 16(1), 79-91.
Huggett, M. (1993). The risk-free rate in heterogeneous-agent incomplete-insurance economies. Journal of Economic Dynamics and Control, 17(5-6), 953-969.
Aiyagari, S. R. (1994). Uninsured idiosyncratic risk and aggregate saving. The Quarterly Journal of Economics, 109(3), 659-684.
Heathcote, J., Storesletten, K., & Violante, G. L. (2009). Quantitative macroeconomics with heterogeneous households. Annu. Rev. Econ., 1(1), 319-354.
Kirkby, R. (2019). Bewley–Huggett–Aiyagari models: computation, simulation, and uniqueness of general equilibrium. Macroeconomic Dynamics, 23(6), 2469-2508.
Ljungqvist & Sargent - Chap 18 (Incomplete Market Models).
Readings:
Huggett, M. (1996). Wealth distribution in life-cycle economies. Journal of Monetary Economics, 38(3), 469-494.
Pijoan-Mas, J. (2006). Precautionary savings or working longer hours? Review of Economic Dynamics, 9(2), 326-352.
Aiyagari, S. R., & McGrattan, E. R. (1998). The optimum quantity of debt. Journal of Monetary Economics, 42(3), 447-469.
Readings:
Ríos-Rull, J. V. (1997). Computation of equilibria in heterogeneous agent models (No. 231). Federal Reserve Bank of Minneapolis.
Code: Equilibrium, Calibration
Readings:
Ljungqvist & Sargent - Chap 28 (Equilibrium Search and Matching).
Mortensen, D. T., & Pissarides, C. A. (1994). Job creation and job destruction in the theory of unemployment. The review of economic studies, 61(3), 397-415.
Pissarides, C. A. (2000). Equilibrium unemployment theory. MIT Press.
Pissarides, C. A. (2011). Equilibrium in the labor market with search frictions. American Economic Review, 101(4), 1092-1105.
Each pair of students should choose a paper from the list above.
25 minutes of presentation.
Mandatory topics:
Research Question
Method
Contribution
Challenges of implementation
Please send me the slides the day before the presentation.
Storesletten, K., Telmer, C. I., & Yaron, A. (2004). Consumption and risk sharing over the life cycle. Journal of Monetary Economics, 51(3), 609-633.
Yasmin e Miguel
Krueger, D., & Perri, F. (2006). Does income inequality lead to consumption inequality? Evidence and theory. The Review of Economic Studies, 73(1), 163-193.
Luís e Victor
Cagetti, M., & De Nardi, M. (2006). Entrepreneurship, frictions, and wealth. Journal of Political Economy, 114(5), 835-870.
Restuccia, D., & Rogerson, R. (2008). Policy distortions and aggregate productivity with heterogeneous establishments. Review of Economic Dynamics, 11(4), 707-720.
Gustavo Ximenez e Gustavo Oliveira
Shimer, R. (2005). The cyclical behavior of equilibrium unemployment and vacancies. American Economic Review, 95(1), 25-49.
Guilherme e Vinícius
Hagedorn, M., & Manovskii, I. (2008). The cyclical behavior of equilibrium unemployment and vacancies revisited. American Economic Review, 98(4), 1692-1706.
Burdett, K., & Mortensen, D. T. (1998). Wage differentials, employer size, and unemployment. International Economic Review, 257-273.
Moen, E. R. (1997). Competitive search equilibrium. Journal of Political Economy, 105(2), 385-411.
Lucas e Gabriel