Macroeconomic Analysis

Syllabus

I. Consumption and saving in the deterministic model

1. Preferences and budget constraints
2. Debt limits and Ponzi games
3. The Euler equation and the transversality condition
4. The intertemporal budget constraint
5. Consumption smoothing and the permanent income hypothesis

II. Consumption and saving under uncertainty

1. Complete markets
2. Incomplete markets
3. Certainty equivalence
4. Precautionary saving
5. Asset pricing with long-lived assets

III. Equilibrium

1. Consumption smoothing and risk sharing
2. Equilibrium with tight debt limits
3. The overlapping generations model
4. Welfare theorems
5. Dynamic inefficiency

IV. Outside assets and government debt

1. Bubbles
2. Government debt and Ricardian equivalence
3. Failure of Ricardian equivalence
4. Social security