This course provides a survey of some selected topics in international macroeconomics and finance. The unifying theme of this course is the use of structural models, specifically, discrete time, dynamic stochastic general equilibrium (DSGE) models to answer some interesting questions in international macroeconomics and finance.

DSGE models have now become a popular tool in macroeconomics. They have two important advantages: 1) They have explicit micro-foundations and hence are less susceptible to the Lucas’ Critique and 2) they are discrete time models and hence can be compared with data more readily. A disadvantage of DSGE models is that they usually do not have closed form solution and hence you have to rely on numerical methods to solve the models.

As part of the training for this course, you will learn how to solve DSGE models using Matlab (no prior experience with Matlab is required). Extensive examples and sample computer programs will be provided. The goal is to train you to do independent research in international macroeconomics and finance by mastering the techniques of building and solving DSGE models.