This unit presents macroeconomic models based firmly on microeconomic foundations. Specifically, macroeconomic models are developed based on the optimising behaviour of private agents and of the government in an open economy framework. There are two important advantages of this approach. First, macroeconomic issues can be discussed in a way that is fully consistent with microeconomic behaviour. Second, because this approach is based on solid microeconomic theory, it can be used to evaluate the welfare consequences of government policy. The empirical regularities that have been found in macroeconomic data will also be discussed and used to evaluate the theory we develop. -- Course Website
Instructor: Associate Professor Max Tani
Prerequisites: ECON633
