Advanced Macro

This part of the course covers the basics of continuous-time dynamic programming and applies it to endogenous growth models. By the end of the course, you should have applicable knowledge of
 * 1) discrete-state Markovian dynamics in continuous time
 * 2) continuous-time dynamic programming with discrete-state uncertainty
 * 3) aggregation of heterogeneous agent models

Weekly problem sets account for 40% of the grade. The final exam accounts for 60%.

= News =

= Problem sets = Teamwork is great. You will learn as much from your fellow students as in class. I encourage you to discuss the problem set with other students, but you should write up the solutions on your own.

To enforce this rule, you are required to hand in either handwritten solutions, or email me the typed up solutions in their original format (Word or LaTeX, not PDF). If you emailed me your assignment, you do not need to print it, too.


 * Problem Set 1/1

= Lectures =
 * [[Media:NewLecture11.pdf|Lecture 11]]. Continuous-time dynamics.
 * [[Media:Lecture2010_2.pdf|Lecture 12]]. Continuous-time Markov chains.
 * [[Media:Lecture2010_3.pdf|Lecture 13.]] Dynamic programming in continuous time.
 * [[Media:Lecture2010_4.pdf|Lecture 14.]] Simple applications of dynamic programming.
 * [[Media:Lecture2010_5.pdf|Lecture 15.]] A firm-level model of innovation.

= Reading = Required readings are denoted by *. Other readings are recommended.

Readings are available online, linked from the course website.


 * Gene Grossman and Elhanan Helpman: "Innovation and Growth in the Global Economy" GH

Lectures 11-12: Continuous-time dynamics

 * * Lecture notes.
 * * [[Media:01efe97892afd8841063902744af321a.pdf]] These are two chapters from "Markov Chains" by James Norris. The following sections are required:
 * 2.1-2.8. Except for explosive processes and backward equations.
 * 3.1
 * 3.5
 * The following articles on Wikipedia:
 * 
 * 
 * 

Lecture 14: The expanding variety model of growth

 * * GH Chapter 3 (except for Appendix). [[Media:C57a1ccf86b7b7d5ad5756e955b48bf4.pdf]]
 * Romer (1990): "Endogenous technological change." JPE
 * Broda and Weinstein (2006): "Globalization and the gains from variety". QJE

Lecture 15: A firm-level model of innovation

 * * Klette and Kortum (2004): "Innovating firms and aggregate innovation". JPE Up to section 3.4 Fixed broken link
 * Koren and Tenreyro (2008): "Technological Diversification" working paper