Content & learning objectives:
The module offers an introduction into state-of-the-art dynamic macroeconomic theory. Students gain an in-depth methodological and content-related knowledge in the field of modern macroeconomics. They learn to build dynamic macroeconomic models derived from microfoundations, to solve these models numerically, and to interpret the qualitative and quantitative outcomes of dynamic analysis. Students develop an intuitive understanding of macroeconomic relationships. They are able to discuss the limitations and to propose potential extensions the models covered in class. Students become familiar with state-of-the-art methods in macroeconomics such as dynamic optimization and numerical solution methods.
The module covers long-run growth theory (Ramsey model) and short-run business cycle theory (Real Business Cycle model, New Keynesian model, Behavioral New Keynesian model).
Planned course structure:
Part I. Macroeconomic Data
- Trends vs. Cycles
- Stylized Facts
Part II. Long-Run Growth Analysis
- The Ramsey Growth Model
Part III. Short-Run Business Cycle Analysis
- The Real Business Cycle Model
- The New Keynesian Model
- A Behavioral New Keynesian Model

Some helpful readings (in alphabetical order):
- Galí, Jordi (2008): “Monetary Policy, Inflation and the Business Cycle”, New Jersey: Princeton University Press.
- Heijdra, Ben J. (2017): “Foundations of Modern Macroeconomics” (3rd edition), Oxford: Oxford University Press.
- Obstfeld, Maurice and Kenneth Rogoff (1996): “Foundations of International Macroeconomics”, Cambridge: The MIT Press.
- Romer, David (2019): “Advanced Macroeconomics” (5th edition), New York: McGraw-Hill Education.
- Walsh, Carl (2017): “Monetary Theory and Policy” (4th edition), Cambridge: The MIT Press.
- Woodford, Michael (2003): “Interest and Prices: Foundations of a Theory of Monetary Policy”, New Jersey: Princeton University Press.
- Further literature and references to journal articles will be announced in class