ECM194-Macroeconomics III

Module Provider: School of Politics, Economics and International Relations
Number of credits: 10 [5 ECTS credits]
Terms in which taught: Spring term module
Non-modular pre-requisites:
Modules excluded:
Current from: 2018/9

Module Convenor: Dr Alexander Mihailov


Type of module:

Summary module description:
This MSc module in advanced macroeconomics (“part III”) introduces students to a set of modern computational topics and methods in macroeconomic theory and policy and the corresponding programming techniques and software, namely Dynare/Matlab. It assumes that students have attended successfully the intermediate MSc module (“part II”) in both macroeconomics and microeconomics. Some knowledge of econometrics and statistics would be an advantage, but it is not required. The module consists of five 2-hour slots: an hour of lecture followed immediately by – or often merged with – an hour of lab class, where Dynare/Matlab codes will be circulated and studied in detail.

This module aims to provide a “hands-on” introduction to the analysis of modern micro-founded macro-models via programming in the user-friendly software Dynare/Matlab.

Assessable learning outcomes:
At the end of the module students should be able to:
(1) programme and assess the simulation or estimation of various dynamic-stochastic general equilibrium (DSGE) models and macroeconomic policies using Dynare/Matlab;
(2) apply such skills in their own research or to explore results in journal articles of interest;
(3) employ the studied concepts and methods to analyse and interpret real-world phenomena.

Additional outcomes:
Programme codes, data and journal articles for discussion and replication will be circulated. These will provide an opportunity for students to develop their analytical and programming skills, as well as their ability to apply theoretical and computing knowledge in interpreting real-world macroeconomic phenomena and policies.

Outline content:

We shall focus on five topics of seminal past or active current research, each illustrated by underlying concepts and models and corresponding computational (simulation or estimation) methods and empirical applications, with interpretations of macroeconomic policy interest.

(1) simulation and analysis of the deterministic Neoclassical growth model;

(2) simulation and analysis of the stochastic real business cycle model;

(3) simulation and analysis of the basic New Keynesian model under a Taylor rule;

(4) simulation and analysis of the basic New Keynesian model under optimal monetary policy;

(5) Bayesian estimation and analysis of the Smets-Wouters (2007) medium-scale New Keynesian benchmark on US quarterly data and of its extension to financial frictions.:

Brief description of teaching and learning methods:
Detailed guidance on the topics covered will be provided in the weekly lectures, together with handouts and slides. The parallel weekly lab classes will consolidate knowledge by further providing codes, data and opportunities to discuss and explore applications of the theory in more depth. Students will be expected to supplement the lectures with the recommended reading and to do some research using the library, internet or other resources. Office hours are available for students to consult the lecturer on an individual basis.

Contact hours:
  Autumn Spring Summer
Lectures 5
Seminars 5
Guided independent study 70 20
Total hours by term 80.00 20.00
Total hours for module 100.00

Summative Assessment Methods:
Method Percentage
Written exam 60
Set exercise 40

Summative assessment- Examinations:

One two hour unseen written paper, which will cover all of the module material.

Postgraduate examinations are held in the summer term.

Summative assessment- Coursework and in-class tests:

Coursework will count for 40% of the overall mark and comprises a simulation or estimation project based on computer code and data to be submitted in the Spring term. 

Formative assessment methods:

Penalties for late submission:
Penalties for late submission on this module are in accordance with the University policy. Please refer to page 5 of the Postgraduate Guide to Assessment for further information:

Assessment requirements for a pass:
A minimum weighted average mark of coursework and examination of 50%.

Reassessment arrangements:
Re-examination for all modules takes place in August/September of the same year.
Re-assessment is by examination only; coursework is not included at the second attempt.

Additional Costs (specified where applicable):
1) Required text books:
2) Specialist equipment or materials:
3) Specialist clothing, footwear or headgear:
4) Printing and binding:
5) Computers and devices with a particular specification:
6) Travel, accommodation and subsistence:

Last updated: 20 April 2018


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