Workshop in Advanced Macroeconomics

Class Notes

Business cycle facts and review of business cycle theories
Note 1
Note 2 – continuation of Note 1

Tools (for a comprehensive introduction compare the “Basics on RBC modelling” section below)
Difference equations
Linearization (pp. 1-7) and numerical solution (pp. 7-11)

How RBC theorists measure success
Calibration

Applications
RBC model with fixed labour supply (example 1): see “Basics on RBC modelling” section below.
Baseline RBC model with labour-leisure choice (example 2): see “Basics on RBC modelling” section below.
Example 3
Example 4

Basics on RBC modelling

Basic facts and concepts
Stylized facts of real aggregate activity
Figures
The one-good, one-shock RBC model
Figures
A primer on asset pricing

General procedure for solving RBC models
Dynamic optimization: A tool kit
MATLAB guide

Model library (examples)
Monte Carlo experiments: Introduction

RBC model with exogenous leisure
M. Wälti (2002), Solving linear rational expectations models
MATLAB: rbcfixFa.m
F. Collard (undated manuscript), Solving the Solow Model by Linear Approximation
MATLAB: rbcfix.m
MATLAB: hpmat.m

RBC model with endogenous leisure
MATLAB: rbc.m
MATLAB: hpmat.m

RBC model with endogenous leisure and government expenditures
H. Dellas (2002), The basic RBC model
MATLAB: hpmat.m

Helpful articles and textbook chapters
Uhlig (1997), A toolkit for analyzing nonlinear dynamic stochastic models easily
Collard (1998), Le modèle canonique des cycles réels. Manuscript
Cooley and Prescott (1995), Economic growth and business cycle facts, in: Cooley, ed., Frontiers of business cycle research, Princeton University Press
King and Rebelo (1999), Resuscitating real business cycles, in: Taylor and Woodford, eds., Handbook of Macroeconomics, Volume 1, 926-100
King, Plosser, and Rebelo (1988), Production, growth and business cycles: I. The basic neoclassical model, Journal of Monetary Economics 21, 195-232
King, Plosser, and Rebelo (1987), Production, growth and business cycles: Technical Appendix
McCallum (1989), Real business cycle models, in Barro, ed., Modern business cycle theory, Blackwell, pp. 17-50

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