2025 (Current Year) Faculty Courses School of Engineering Department of Industrial Engineering and Economics Graduate major in Industrial Engineering and Economics
Advanced Macroeconomics
- Academic unit or major
- Graduate major in Industrial Engineering and Economics
- Instructor(s)
- Takeo Hori
- Class Format
- Lecture (Face-to-face)
- Media-enhanced courses
- -
- Day of week/Period
(Classrooms) - 1-2 Tue / 1-2 Fri
- Class
- -
- Course Code
- IEE.B402
- Number of credits
- 200
- Course offered
- 2025
- Offered quarter
- 2Q
- Syllabus updated
- Mar 19, 2025
- Language
- English
Syllabus
Course overview and goals
This course is designed for mainly first-year graduate students to help them understand the basic analytical tools of modern macroeconomics.
The first half of this course covers (i)the mathematical methods often used in macroeconomics (e.g., dynamic programming, optimal control theory, dynamical system), and (ii)the Ramsey–Cass–Koopmans model, which now gives us a benchmark for many areas of macroeconomic analysis. Then, in the second half, we extend this model to understand the mechanics of several important economic phenomena, including economic growth, business cycle, unemployment and so on.
Course description and aims
The objective of this course is for students to become familiar with macroeconomics and to help them in their ability to read theoretical research papers in preparation for their own research.
Keywords
dynamic general equilibrium model, Ramsey–Cass–Koopmans model, infinite-horizon optimization, dynamical system, steady state, competitive equilibrium path, endogenous growth model, productivity growth with knowledge spillovers, endogenous technological change by R&D, real business cycle models, calibration,
Competencies
- Specialist skills
- Intercultural skills
- Communication skills
- Critical thinking skills
- Practical and/or problem-solving skills
Class flow
I will give students homework assignments after we have finished each topic covered in this course.
Course schedule/Objectives
| Course schedule | Objectives | |
|---|---|---|
| Class 1 | Guidance | Understand the purpose of studying macroeconomics. |
| Class 2 | Solow growth model | Understand the Solow growth model |
| Class 3 | Ramsey model (1): households | Understand households' behavior of the Ramsey growth model. |
| Class 4 | Ramsey model (2): firms | Understand firms' behavior of the Ramsey growth model. |
| Class 5 | Ramsey model (3): equilibrium | Derive the equilibrium of the Ramsey growth model. |
| Class 6 | Ramsey model (4): optimal allocation | understantd how to derive the optimal allocation. |
| Class 7 | Ramsey model (5): applications | an application to an endogenous growth model |
| Class 8 | Review of the first half of the course (classes 1-7) and midterm exam | Review of the first half of the course (classes 1–7) and midterm exam. |
| Class 9 | Overlapping-generations model (1) : households | Understand households' behavior in a simple OLG model. |
| Class 10 | Overlapping-generations model (2) : firms | Understand firm behavior in a simple OLG model. |
| Class 11 | Overlapping-generations model (3) : equilibrium dynamics | Derive the equilibrium path. |
| Class 12 | Overlapping-generations model (4) : dynamic inefficiency | Understand the dynamic inefficiency and the resource allocation. |
| Class 13 | Overlapping-generations model (5) : social security | Understand the roles of social security system. |
| Class 14 | Brief Review of the Course | Review of the course. |
Study advice (preparation and review)
To enhance effective learning, students are encouraged to spend approximately 100 minutes preparing for class and another 100 minutes reviewing class content afterwards (including assignments) for each class.
They should do so by referring to textbooks and other course material.
Textbook(s)
There is no designated textbook. Handouts or slides used for each class will be available on the corresponding page of T2SCHOLA by the day before the class.
Reference books, course materials, etc.
(1) Acemoglu, D. (2009) Introduction to Modern Economic Growth, Princeton University Press.
(2) Adda, J. and R. Cooper (2003) Dynamic Economics, Cambridge, MIT Press.
(3) Barro, R. J. and X. Sala-i-Martin (2004) Economic Growth, Second Edition, Cambridge,MIT Press.
(4) Ljungqvist, L. and T. J. Sargent (2012) Recursive Macroeconomic Theory, Third Edition, Cambridge, MIT Press
Evaluation methods and criteria
TBA
Related courses
- IEE.B203 ： Macroeconomics I
- IEE.B204 ： Macroeconomics II
- IEE.B201 ： Microeconomics I
- IEE.B202 ： Microeconomics II
- IEE.B401 ： Advanced Microeconomics
- IEE.B205 ： Noncooperartive Game Theory
Prerequisites
Although there is no explicit prerequisite for this course, knowledge of micro- and macroeconomics at the undergraduate level and a basic understanding of nonlinear programming will be required.