The course is compulsory for the PhD students of Copenhagen Business School's Department of Economics, but also open to other PhD students who can prove some knowledge in intermediate macroeconomics as well as in some mathematical tools like multivariate calculus, constrained maximization and statistics/probability.

After the course, students are required to:

• explain and be able to apply tools of dynamic economics useful in macroeconomics, and empirical techniques used to calibrate macroeconomic models;
• explain different models of economic growth, fiscal and monetary policies, search and matching (in the labor market), and international trade;
• use the models presented in the course to explain the effects of policies and shocks on the economy.

The aim of the course is to develop some of the most important tools of dynamic economics useful in macroeconomics and to provide a number of workhorse models useful in multiple areas of macroeconomics, namely economic growth, fiscal and monetary policies, search and matching (in the labor market) and international trade. The course should cover the following topics:

1. Dynamic optimization methods
2. Economic growth and technological change
3. Fiscal policy
4. Monetary policy
5. Macro labor: search and matching
6. International trade and geography

Each lecture is 3 hours long. There are 14 lectures for a total of 42 hours of lectures.

L1-L2: Assignment of student presentations and Dynamic Programming

L3-L4: Economic Growth and Technological Change with applications to Inequality and Climate Change. Student presentation (L4)

L5: Fiscal Policy. Student presentation.

L6: Monetary Policy. Student presentation.

L7-L10: Macro Labor. Student presentations (L8 and L10).

L11-L14: International Trade. Student presentations (L12 and L14).

The student presentations can be either:

• A paper from a list to be published before the course starts.
• Short applied research project related to the topics in class, subject to approval by the course coordinator, such that topics are evenly distributed and within the scope and depth of the course.

Students will have two hours of supervision available to them and faculty members serving as supervisors will be allocated the respective Prophix hours for individual supervision and feedback on the project.

Choice of take-home assignment(s) or student presentation in class. The grading will be Pass/Fail, with chance for re-take. 

There is no single textbook which covers all the topics in the course. The main textbooks with suggested readings are:

[L&S] Lars Ljungqvist and Thomas J. Sargent (2018) Recursive Macroeconomic Theory, MIT Press. ISBN 978-0-262-03866-9

[CCZ] Labor Economics, Cahuc, P., Carcillo S. and Zylberberg, Princeton University Press, 2015.

[DA] Daron Acemoglu (2009) Introduction to Modern Economic Growth, Princeton University Press. ISBN 978-0-691-13292-1

[B&F] Olivier Blanchard and Stanley Fischer (1989) Lectures on Macroeconomics, MIT Press.

[O&R] Maurice Obstfeld and Kenneth Rogoff (1996) Foundations of International Macroeconomics, MIT Press. ISBN 978-0-262-15047-7

Articles and lecture notes:

Allen, T. and Arkolakis, C. (2014). Trade and the topography of the spatialeconomy.The Quarterly Journal of Economics, 129(3):1085–1140.

Amiti, M., Dai, M., Feenstra, R. C., and Romalis, J. (2017). How did china’s WTO entry affect US prices? NBER Working Paper, (w23487).

Arkolakis, C., Costinot, A., and Rodriguez-Clare, A. (2012). New trade models, same old gains? American Economic Review, 102(1): 94–130

Autor, D. H., Dorn, D., and Hanson, G. H. (2016). The china shock: Learning from labor-market adjustment to large changes in trade. Annual Review of Economics, 8: 205–240.

Blanchard and Kahn, “The Solution to Linear Difference Models under Rational Expectations,” Econometrica, 1980.

Borusyak, K. and Jaravel, X. (2018). The distributional effects of trade: Theory and evidence from the united states. Available at SSRN 3269579.

Broda, C. and Weinstein, D. E. (2006). Globalization and the gains from variety. The Quarterly Journal of Economics, 121(2):541–585.

Burdett, K. and Mortensen, D. ‘Wage Differentials, Employer Size, and Unemployment’, International Economic Review, 1998 pp. 257-273.

Caliendo, L., Dvorkin, M., and Parro, F. (2019). Trade and labor market dynamics: General equilibrium analysis of the china trade shock.

Chaney, T. (2008). Distorted gravity: the intensive and extensive margins of international trade. The American Economic Review, 98(4):1707–1721.

Desmet, K., Nagy, D. K., and Rossi-Hansberg, E. (2016). The geography of development. Journal of Political Economy.

Eaton, J. and Kortum, S. (2002). Technology, geography, and trade. Econometrica, 70(5):1741–1779.

Elbsy, M. Hobijn, B. and ̧Sahin, A. ‘Unemployment Dynamics in the OECD’, The Review of Economics and Statistics, May 2013, 95(2), pp 530-548

Elsby, M., Michaels R. and Ratner, D. ‘The Beveridge Curve: A Survey’, Journal of Economic Literature, 2015, 53(3), pp 571-630.

Feenstra, R. C. (1994). New product varieties and the measurement of international prices. The American Economic Review, pages 157–177.

Haltiwanger, J. Hyatt, H. Kahn, L. and McEntarfer, E. ‘Cyclical Job Ladders by Firm Size and Wage’,American Economic Journal: Macroeconomics, April 2018.

Hassler, John Matfu II, notes.

Jolivet, G., Postel-Vinay, F. and Robin, J-M. ‘The Empirical Content of the Job Search Model: Labor Mobility and Wage Distributions in Europe and the US’, European Economic Review,275 (2006): 269-308.

King and Rebelo, “Resuscitating Real Business Cycles,” Handbook of Macro 1999.

Krugman, P. (1980). Scale economies, product differentiation, and the pattern of trade. The American Economic Review, 70(5):950–959.

Krugman, P. R. (1991).Geography and trade.

Mortensen, D. Why are Similar Workers Paid Differently, 2003. Introduction, ch.1-3.

Mortensen, Dale T. “Markets with search friction and the DMP model.” American Economic Review 101, no. 4 (2011): 1073-91.

Petrosky-Nadeau, N. and Wasmer, Labor, Credits and Goods Markets, The Macroeconomics of Search and Unemployment, 2017, chapters 1 and 2.

Rogerson, R., Shimer, R. and Wright, R., ‘Search-theoretic Models of the Labor Market:A Survey’, Journal of Economic Literature43(4), pp. 959-988, 2005.

Weibull, Jörgen, Math for Economists, notes.