AØKA08207U Theoretical and Empirical Foundations of DSGE Modeling
We will focus on the construction, solution and empirical validation of dynamic stochastic general equilibrium (DSGE) macroeconomic models. The first week of the course will be centered around the formulation and solution of DSGE models. We will first review the baseline structure of the Real Business Cycle model and the New Keynesian model. We will next consider some recent extensions to these baseline settings. There will be afternoon classes designed to acquaint participants with the numerical analysis of DSGE models. During the second week there will be lectures and classes aimed at reviewing various methods employed to validate DSGE models. Finally, a guest lecture will be provided by Jesper Pedersen from Danmarks Nationalbank on the structure and estimation of the DSGE model of the Danish economy.
- Have knowledge of the key building blocks of dynamic stochastic general equilibrium (DSGE) models.
- Be able to formulate, solve and analyze small-scale DSGE models.
- Be able to interpret formal results obtained from the analytical and numerical analysis of DSGE models, reporting them in economic and intuitive terms.
- Be able to perform monetary policy analysis in the baseline New Keynesian model.
- Have knowledge of the main empirical methodologies used to validate DSGE models.
- Have a basic understanding of how DSGE models are implemented for both business cycle and normative analyses at modern monetary institutions.
Formal Requirements: no formal requirements.
- Class Exercises
For Open University, exchange and concurrently enrolled students: through the summer school website
- 7,5 ECTS
- Type of assessment
- Written assignment, 7 daysThe exam is a 7 days take-home assignment given on July 12 with deadline July 19.
- All aids allowed
- Marking scale
- 7-point grading scale
- Censorship form
- External censorship
100 % censorship
- Exam period
- Will be updated before the start of the semester
- Same as ordinary. But if only a few students have registered for the re-exam, the exam might change to an oral exams with a synopsis to be handed in. This means that the examination date also will change.