Welcome to AECO 701, the second semester of the first-year Ph.D. macro sequence. This page will host course content. In addition to posting PDFs of the course material, I will make (to the extent possible) LaTeX code and programs available when used in class. Please note: my LaTeX code is generally a mess. I find that exploring code that others have used is far more helpful than most tutorials. Some material I cannot make available online. If this is the case, please email me.
I should note that much of this material is based on lectures developed by the previous instructors of this course: Betty Daniel, Yue Li, and John Jones, in order in which they taught the course (most recent to least recent). I have also linked to other course pages that I found helpful in developing this material below.
Syllabus: link (tex)
Cluster Access: (link)
Homework (please submit on the campus cluster. please also email myself and our TA):
Problem Set 1 (Due: 2/6): Programming practice (link, tex)
- Version history: Spring 2021 (Original version) (pdf, tex)
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Problem Set 1 Answer Key (link, tex)
- Code (matlab)
- For previous versions: 2021 (Current version) (pdf, tex)
Problem Set 2 (Due 2/20): Markov chains (link, tex)
- Version history: Spring 2021 (Current version) (pdf, tex, figures)
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Problem Set 2 Answer Key (link, tex)
- Code (matlab)
- For previous versions: 2021 (Current version) (pdf, tex)
Problem Set 3 (Due 3/13): The Lucas Critique and Rational Expectations (link, tex)
- Version history: Spring 2025 (Current version) (pdf, tex)
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Problem Set 3 Answer Key
- For previous versions: 2021 (Current version) (pdf, tex)
Problem Set 4 (Due 3/25): Income fluctuation problem and Guess and Verify method (link, tex)
- Version history: Spring 2021 (Current version) (pdf, tex)
Problem Set 4 Answer Key (link, tex)
- For previous versions: 2021 (Current version)
Problem Set 5 (Due 4/17): The RBC Model (link, tex)
- Version history: Spring 2021 (Current version) (pdf, tex)
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Problem Set 5 Answer Key
- For previous versions: 2021 (Current version) (pdf, tex)
Problem Set 6 (Due 5/8): The McCall Model (link, tex)
- For previous versions: 2025 (Current version) (pdf, tex)
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Problem Set 6 Answer Key
- For previous versions: 2021 (Current version) (pdf, tex)
Previous Exams:
Midterm: Spring 2024 (link)
Final (link)
Exam Answer Keys:
Midterm (link)
Final
Slides:
Lecture 1: Introduction (link, tex, figures)
- Version history: Spring 2021 (Current version) (pdf, tex, figures)
Lecture 2: Overview of Macro Models (link, tex, figures)
- Version history: Spring 2021 (Current version) (pdf, tex, figures)
Lecture 3: Stochastic Processes I (link, tex, figures)
- Version history: Spring 2021 (Current version) (pdf, tex, figures)
Lecture 4: Stochastic Processes II (link, tex, figures)
- Version history: Spring 2021 (Current version) (pdf, tex, figures)
Lecture 5: Linear Difference Equations (link, tex, figures)
- Version history: Spring 2021 (Current version) (pdf, tex, figures)
Lecture 6: Lucas Critique (link, tex, figures)
- Version history: Spring 2025 (Current version) (pdf, tex, figures)
- Spring 2021 (Current version) (pdf, tex, figures)
Lecture 7: Dynamic Programming (pdf, tex, figures)
- Version history: Spring 2025 (Current version) (pdf, tex, figures)
- Spring 2021 (Current version) (pdf, tex, figures)
Lecture 8: Consumption Smoothing and Permanent Income (pdf, tex, figures)
- Version history: Spring 2025 (Current version) (pdf, tex, figures)
- Version history: Spring 2021 (pdf, tex, figures)
Lecture 9: Asset Pricing and Lucas Tree (pdf, tex, figures)
- Version history: Spring 2021 (Current version) (pdf, tex, figures)
Lecture 10 (Please review lecture 11 on 2/27. We will cover lecture 10 on 3/6): Complete Markets (pdf, tex, figures)
- Version history: Spring 2021 (Current version) (pdf, tex, figures)
Lecture 11 (Please review these slides before lecture 10, instead of class on 2/27): Stochastic Neoclassical Growth (pdf, tex, figures)
- Version history: Spring 2025 (pdf, tex, figures)
- Version history: Spring 2021 (Current version) (pdf, tex, figures)
Lecture 12: Solution Methods I: Guess and Verify (pdf, tex, figures)
- Version history: Spring 2021 (Current version) (pdf, tex, figures)
Lecture 13: The RBC Model (pdf, tex, figures)
- Version history: Spring 2021 (Current version) (pdf, tex, figures)
Lecture 14: Solution Methods II: Log-Linearization (pdf, tex, figures)
- Version history: Spring 2021 (Current version) (pdf, tex, figures)
Lecture 14 Supplemental Material: Linearizing Hansen (1985) Model
- Version history: Spring 2021 (Current version) (pdf, tex, figures)
Midterm!
Lecture 15: Solution Methods III: Value Function Iteration (pdf, tex, figures)
- Version history: Spring 2021 (Current version) (pdf, tex, figures)
Lecture 16: RBC Calibration and Extensions (pdf, tex, figures)
- Version history: Spring 2023 (Current version) (pdf, tex, figures)
- Spring 2021 (pdf, tex, figures)
Lecture 17: Heterogeneous Agents (pdf, tex, figures)
- Version history: Spring 2021 (Current version) (pdf, tex, figures)
Lecture 18: Solving Heterogeneous Agents (pdf, tex, figures)
- Version history: Spring 2021 (Current version) (pdf, tex, figures)
Lecture 19: McCall Model (pdf, tex, figures)
- Version history: Spring 2021 (Current version) (pdf, tex, figures)
Lecture 20: Diamond-Mortensen-Pissarides (pdf, tex, figures)
- Version history: Spring 2025 (Current version) (pdf, tex, figures)
- Version history: Spring 2021 (Current version) (pdf, tex, figures)
Lecture 21: Endogenous Separations (pdf, tex, figures)
- Version history: Spring 2025 (Current version) (pdf, tex, figures)
Lecture 22: Hosios Condition (pdf, tex, figures)
- Version history: Spring 2021 (Current version) (pdf, tex, figures)
Lecture 23: Directed Search (pdf, tex, figures)
- Version history: Spring 2021 (Current version) (pdf, tex, figures)
Lecture 24: Limited Information Estimation (pdf, tex, figures)
- Version history: Spring 2025 (Current version) (pdf, tex, figures)
Lecture 25: DSGE Estimation (pdf, tex, figures)
- Version history: Spring 2025 (Current version) (pdf, tex, figures)
Extra topics (if we have time):
Lecture: Block Recursive Equilibrium (pdf, tex, figures)
- Version history: Spring 2021 (Current version) (pdf, tex, figures)
Hibernating Lectures:
Lecture: New Keynesian Model I
- Version history: Spring 2021 (Current version) (pdf, tex, figures)
Lecture: New Keynesian Model II
- Version history: Spring 2021 (Current version) (pdf, tex, figures)
Lecture: Financial Frictions
- Version history: Spring 2021 (Current version) (pdf, tex, figures)
Lecture: Income Fluctuations
- Version history: Spring 2021 (Current version) (pdf, tex, figures)
Previous Assignments (from past years):
Linear difference equations and the Contraction Mapping Theorem
(link, tex)
- Version history: Spring 2021 (Current version) (pdf, tex)
Answer Key: Linear difference equations and the Contraction Mapping Theorem
- For previous versions: 2021 (Current version) (pdf, tex)
Problem Set 6 (Due 5/8): The Heterogeneous Agent Model (link, tex)
- For previous versions: 2021 (Current version) (pdf, tex)
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Problem Set 6 Answer Key
- For previous versions: 2021 (Current version) (pdf, tex)
Programs (I’ll update these as I clean them):
Access the shared folders on the campus cluster or see me/email me directly.
Here are some other great resources for class materials (some links may no longer be working):
Gianluca Violante’s course on quantitative macroeconomics: link
Jesus Fernandez-Villaverde’s slides on computational techniques: link
Makoto Nakajima’s notes on solution techniques: link
Daron Acemoglu and David Autor lectures on labor economics: link
Chris Tonetti’s write-up on income processes: link
Useful review of linearization: link
Here are other useful resources for programming or data:
Tom Sargent and John Stachurski’s website on dynamic macroeconomics in Python and Julia: link
Anaconda Python: link
CEPR SIPP webpage: link
IPUMs CPS webpage: link
Anthony Damico’s website on survey data: link
SIPP FTP and data definitions: link
And other fun material:
Inspirational Teddy Roosevelt Quotes: link