## Advanced Topics in Macroeconomics: Quantitative Macroeconomics

(Johns Hopkins University, AS.180.605)

**Course Information**

__Instructor__: Erick Sager__Place__: Mergenthaler 426

**Course Materials**

- Course Syllabus (last updated 8/31/15)
- Lecture Notes (updated 10/18/15)
- Course Readings (Bibtex Plugin - click here)
- TeX Resources (MikTeX - TeXstudio - Example Template)

**Problem Sets**

- Problem Set 1 - (Solution to PS1)
- Problem Set 2 - (Solution to PS2)

**Useful Articles**

- Milton Friedman: Positive Methodology of Economics
- Narayana Kocherlakota: On the State of Macroeconomics
- Tony Smith: Advice on Computational Work

**Running Course Agenda**

- (8/31/15) Introductions and discussion about what this course is and what you should get out of it. We looked at some data to get warmed up and reviewed aggregation theorems in linear economies. Lecture notes have been posted and will be updated over the course of the semester. (Lecture Slides)
- (9/7/15) Labor day. No class!
- (9/14/15) We spent the first half finishing aggregation results with complete markets and working through Maliar and Maliar (2003) . In the second half of class we motivated the Permanent Income Hypothesis, derived a series of results as a review of material you have learned with Chris, and discussed the testable implications of the theory. (Lecture Slides)
- (9/21/15) We discussed the "Excess Smoothness" puzzle and worked through Campbell and Deaton's (1989) reconciliation of the excess sensitivity and smoothness puzzles. We then showed how borrowing constraints generate a precautionary savings motive. (Lecture Slides)
- (9/28/15) We continued to characterize the buffer stock model. We showed how prudence in utility generates a precautionary savings motive and then proved a series of propositions about the effect of patience on convergence or divergence of consumption paths. (Lecture Slides)
- (10/5/15) No class, stay safe during the hurricane!
- (10/12/15) We finished characterizing the buffer stock model along the dimension of agents' impatience (with deterministic and stochastic income). We started to work through Carroll (1992) and characterize the Marginal Propensity to Consume. (Lecture Slides)
- (10/15/15) We finished characterizing the Marginal Propensity to Consume and described a General Equilibrium framework for understanding the effect of uninsurable idiosyncratic labor risk on aggregate outcomes. (Lecture Slides)
- (10/19/15) We proved that a Recursive Competitive Equilibrium exists and discussed how you can go about computing such a solution. We discussed the solution to the model and then considered an extension with Government debt. (Lecture Slides)
- (10/26/15) We incorporated business cycles into the model, showed how to compute equilibria and discussed the "Near-Aggregation" result. We ended by discussing when heterogeneity matters for modeling business cycle outcomes. In the second half of the class Jiaxiong Yao shared some of his related work on leverage and consumption. Thanks Jiaxiong! (Lecture Slides)

**Great Recession Presentations Begin**

- (11/2/15) Yun Gong presents Midrigan and Philippon (2011); Kevin Yuan presents Guerreri and Lorenzoni (2015)
- (11/9/15) Yeabin Moon presents Heathcote and Perri (2015); Chang Ma presents Korinek and Simsek (2015)
- (11/16/15) Edmund Crawley presents Arellano, Bai and Kehoe (2012); Hanchen Jiang presents Carroll, Slacalek and Sommer (2013)
- (11/30/15) Yunting Liu presents Gorea and Midrigan (2015); Sue Bahk presents Kehoe, Midrigan and Pastorino (2015)
- (12/7/15) Jong Jae Lee presents Basetto, Cagetti and DeNardi (2015); Luigi Durand presents Kaplan and Violante (2015)

**Original Research Presentations**

- (12/14/15) Volunteers will present for 30 minutes and get some feedback on their research ideas