Overview

Money and Macroeconomics at the Research Frontier

Important: The content of EC9C6 varies from year to year. I tailor my part of the module to current research and to topics I am actively working on. The aim is to bring students to the research frontier in money and macroeconomics and to suggest thesis topics that I would would be willing to supervise. This year I will build on these themes

Temporary equilibrium and belief functions

Macroeconomics as a sequence of temporary equilibria; writing equilibrium as a recursive transition equation and a belief function. When equilibria are determinate vs indeterminate. Using AI in research

T-period overlapping-generations (OLG) models under perfect foresight

Two-period and T-period OLG models as examples of temporary equilibrium. Equilibrium as a sequence of prices; the Kehoe–Levine approach and the Farmer–Zabczyk method (prices as states).

T-period overlapping-generations (OLG) models under uncertainty

Using wealth and human wealth as a high-dimensional state vector. Extending the method to economies with uncertainty. Second-degree indeterminacy in high-dimensional models. Sunspots and asset pricing.

Indeterminacy and the belief function to select equilibrium

Why OLG and related models often have multiple steady states and indeterminate dynamics; implications for monetary and fiscal policy; how equilibria are selected by beliefs. The belief function as a selection mechanism in T-period models (possible thesis topic).

Production economies and the perpetual youth model

Production economies; calibrated examples; determinacy and indeterminacy in applied settings; tools and methods. Use of AI/coding tools for research.

Heterogeneous agent models, indeterminacy, and solution methods

Heterogeneous agent (HA) models; indeterminacy and money in HA models; solution methods for infinite-dimensional state spaces; state space reduction in high-dimensional models (possible thesis topic). Market completeness over aggregate shocks (possible thesis topic).

The course is designed so that students see how theory connects to current research and to potential dissertation ideas. I am happy to discuss supervision of theses in money/macro that build on or extend the material covered in his part of the module. Concrete suggestions for thesis topics will be suggested in the lectures.