Module Details

EC994-8-AU-CO: Advanced Macroeconomics

Note: This module is inactive. Visit the Module Directory to view modules and variants offered during the current academic year.

Year: 2017/18
Department: Economics
Essex credit: 20
ECTS credit: 10
Available to Study Abroad / Exchange Students: No
Full Year Module Available to Study Abroad / Exchange Students for a Single Term: No
Outside Option: No

Supervisor: Professor Christian Ghiglino
Teaching Staff: Prof Christian Ghiglino
Contact details: For Further information, send an email message to

Module is taught during the following terms
Autumn Spring Summer

Module Description

This module builds on the notions covered in EC904 Macroeconomics. The course starts with more advanced techniques of dynamic programming. We then cover the theory of Real Business Cycle, with particular emphasis on how to solve these models numerically, using Dynare. We them study the implications of three different types of frictions: nominal rigidities (New-Keynesian model); search and matching frictions ( Diamond-Mortensen-Pissarides model); and financial frictions (financial accelerator model).

The third part of the course focuses on Fiscal policy. We will look at the effects of government spending and taxation. We also examine optimal policy under complete and incomplete markets and the problem of time inconsistency.

Learning and Teaching Methods


100 per cent Coursework Mark


  • The main readings are paper based, but we will use some chapters of the following textbooks
  • Nancy L. Stokey and Robert E. Lucas, Jr., with Edward C. Prescott, Recursive Methods in Economic Dynamics, Harvard University Press, 1989.
  • Ljungqvist and Sargent, Recursive Macroeconomic Theory, 2nd Edition, MIT Press, 2004.
  • Christopher Pissarides, Equilibrium Unemployment Theory, 2nd edition. Cambridge: MIT Press, 2000
  • Jordi Gali, Monetary Policy, Inflation and the Business Cycle, Princeton University Press, 2008.

Further information