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Regular version of the site
Master 2020/2021

Macroeconomics (Advanced Level)

Type: Compulsory course (Financial Economics)
Area of studies: Economics
When: 1 year, 1-4 module
Mode of studies: offline
Open to: students of one campus
Master’s programme: Financial Economics
Language: English
ECTS credits: 8
Contact hours: 112

Course Syllabus


Macroeconomics is a one-year required course designed for the first-year students of the ICEF Master of Science programme in financial economics. It provides an overview of modern macroeconomics at the advanced level. The course is taught in English. Macroeconomics course has three parts. Part I is taught by Professor Nikitin in modules 1 and 2. Its emphasis is on analytical tools of modern dynamic macroeconomics and on the long-run issues, such as the economic growth. Students will learn standard ‘workhorse’ models of modern macroeconomics, including the infinitely-lived representative agent framework and the overlapping-generations framework, as well as some of the standard applications to fiscal policy and social security. Students will be also familiarized with the main ideas of endogenous growth theory, ways to introduce money in dynamic optimizing macroeconomic models and some of the long-run findings from these models, including the optimum quantity of money (the Friedman rule). Part II of the course is taught by Professor Peiris in module 2 and gives an introduction to open economy issues. Part III of the course is taught by Professor Gebauer in modules 3 and 4. It deals with the analysis of the short-run macroeconomic phenomena. It introduces the Real Business Cycle approach and the New Keynesian approach to the problem of economic fluctuations. It also familiarizes students with models of Search and Matching in labor markets. Prerequisites: Students are expected to be familiar with microeconomics and macroeconomics at the intermediate level, calculus of several variables, basic statistics and econometrics.
Learning Objectives

Learning Objectives

  • To give a broad overview of substantive issues of modern macroeconomics;
  • To teach analytical tools and methods of macroeconomic analysis to enable students to continue their education at a Ph.D. level and to read research papers in the area;
  • To enable students to conduct applied analysis of macroeconomic policy while working for government agencies, think tanks, central banks or the private sector;
  • To give students the essential knowledge for applied courses, including financial economics.
Expected Learning Outcomes

Expected Learning Outcomes

  • Explain basic statistical techniques used in Business Cycle Literature
  • Define Recessions and Booms and outline patterns established about Business Cycles
  • Apply the methodology of DSGE models
  • Critically appraise the performance of models vis-à-vis reality
  • Evaluate approaches on how to incorporate monetary frictions
  • Intelligently discuss some aspects of monetary policy
  • Apply methodology of search and matching models
  • Assess the challenges and issues the search theory of unemployment still faces
  • Explain and use the basic accounting concepts that describe the modern open economy, stylized facts about the world economy and capital flows.
  • Outline models of international risk sharing and the role of financial frictions and incomplete markets
  • Compare model predictions with empirical observations
  • Explain recent developments in the international banking and financial regulatory environment and models of how policy can affect undesirable economic/financial fluctuations.
  • Explain recent developments of the Russian economy
  • Apply macro-finance modelling frameworks developed throughout the course.
Course Contents

Course Contents

  • Introduction to economic growth. Solow model with endogenous growth, extensions and applications. Empirical tests
  • Lucas critique and its impact on macroeconomic modeling
  • Dynamic optimizing macroeconomic models: an introduction and applications
    3.1. Two-period model. The Euler equation. Application to the current account in an open economy. 3.2. Infinitely-lived representative agent framework. Cass-Koopmans optimal growth model in continuous time. 3.3. Overlapping-generations framework and the Diamond model. Applications to fiscal policy and social security. 3.4. Ricardian equivalence: theory and evidence
  • Endogenous growth. Advanced topics.
  • Money in dynamic optimizing macroeconomic models.
    5.1. Sidrauski model. Superneutrality, Tobin effect and the Friedman rule.
  • Social infrastructure, predation and protection in macroeconomic models
  • International Accounting, Risk Sharing and Business Cycles
    Here we will look at the basics of national accounting for open economies and examine stylized facts about the world economy. We will construct a formal model that reflects the accounting relationships. We will also study the Russian and Brazilian crisis. These lectures will provide a motivation for the theoretical frameworks that will follow
  • International Exchange Economies, Risk Sharing and Incomplete Markets
    We will first extend the basic asset pricing result of Arrow-Debreu to an international context and examine the predictions for risk sharing. We will extend this analysis first to International CAPM and then see how market incompleteness and default affect the results.
  • Financial Stability, Macro/Micro-prudential policy and international spillovers.
    We will cover banking regulations, financial stability and international spillover of risk through the banking system.
  • Russia as an Open Economy and Review
    The post-soviet Russian experience will be examined through the lens of the course material covered. We will go through the material in the course and discuss how various aspects considered tie in together.
  • Business Cycle dynamics. The issues of business cycle movements definition. Statistical ways of economic dynamics decomposition into short- and long-run dynamics. Stylized facts about short-run movements.
    This section introduces Business Cycles, definitions and methods as well as lays the ground for the next section. We discuss statistical ways of decomposition and their merits as well as the derivation of “Stylized Facts”.
  • The Real Business Cycle (RBC) models.
    2.1. RBC basic model. Set-up and solution of agents’ problems. 2.2. Solving RBC models. Methods of exact solution. Log-linear approximations. 2.3. Empirics of the standard RBC model.
  • The New Keynesian models.
    3.1. Foundations for nominal frictions. Taylor Staggering and Lucas Model of Imperfect Information. Fischer’s contracting wage model. 3.2. The Model of Monopolistic Competition. 3.3. Calvo pricing. New Keynesian Phillips Curve.
  • Search-Theoretic Models.
    4.1. The Diamond-Mortensen-Pissarides Model of Unemployment. The matching-function, Beveridge Curve, Nash-Bargaining. 4.2. The Hosios Condition of Efficiency. 4.3. Competetive Search Equilibrium. Search Clubs, Wage Posting 4.4. Extensions and Applications of Search Models. 4.5. Going beyond Labour Applications. Search Model in monetary economics
Assessment Elements

Assessment Elements

  • non-blocking homework assignments
  • non-blocking course participation
    The participation grade will be a grade assigned by the lecturer at the end of the semester. It will be based on the amount and level of discussions on the topics the students engage in in class. This means that mere attendance is not enough
  • non-blocking midterm test
    Для студентов она дистанте экзамен проводится в письменной форме с использованием синхронного прокторинга. Экзамен проводится на платформе https://hse.student.examus.net). К экзамену необходимо подключиться за 10 минут до начала. Проверку настроек компьютера необходимо провести заранее, чтобы в случае возникших проблем у вас было время для обращения в службу техподдержки и устранения неполадок. Компьютер студента должен удовлетворять требованиям: 1. Стационарный компьютер или ноутбук (мобильные устройства не поддерживаются); 2. Операционная система Windows (версии 7, 8, 8.1, 10) или Mac OS X Yosemite 10.10 и выше; 3. Интернет-браузер Google Chrome последней на момент сдачи экзамена версии (для проверки и обновления версии браузера используйте ссылку chrome://help/); 4. Наличие исправной и включенной веб-камеры (включая встроенные в ноутбуки); 5. Наличие исправного и включенного микрофона (включая встроенные в ноутбуки); 6. Наличие постоянного интернет-соединения со скоростью передачи данных от пользователя не ниже 1 Мбит/сек; 7. Ваш компьютер должен успешно проходить проверку. Проверка доступна только после авторизации. Для доступа к экзамену требуется документ удостоверяющий личность. Его в развернутом виде необходимо будет сфотографировать на камеру после входа на платформу «Экзамус». Также вы должны медленно и плавно продемонстрировать на камеру рабочее место и помещение, в котором Вы пишете экзамен, а также чистые листы для написания экзамена (с двух сторон). Это необходимо для получения чёткого изображения. Во время экзамена запрещается пользоваться любыми материалами (в бумажном / электронном виде), использовать телефон или любые другие устройства (любые функции), открывать на экране посторонние вкладки. В случае выявления факта неприемлемого поведения на экзамене (например, списывание) результат экзамена будет аннулирован, а к студенту будут применены предусмотренные нормативными документами меры дисциплинарного характера вплоть до исключения из НИУ ВШЭ. Если возникают ситуации, когда студент внезапно отключается по любым причинам (камера отключилась, компьютер выключился и др.) или отходит от своего рабочего места на какое-то время, или студент показал неожиданно высокий результат, или будут обнаружены подозрительные действия во время экзамена, будет просмотрена видеозапись выполнения экзамена этим студентом и при необходимости студент будет приглашен на онлайн-собеседование с преподавателем. Об этом студент будет проинформирован заранее в индивидуальном порядке. Во время выполнения задания, не завершайте Интернет-соединения и не отключайте камеры и микрофона. Во время экзамена ведется аудио- и видео-запись. Процедура пересдачи проводится в соответствии с нормативными документами НИУ ВШЭ.
  • blocking exam
  • blocking final exam
Interim Assessment

Interim Assessment

  • Interim assessment (2 module)
    0.05 * course participation + 0.6 * exam + 0.1 * homework assignments + 0.25 * midterm test
  • Interim assessment (4 module)
    0.025 * course participation + 0.3 * final exam + 0.05 * homework assignments + 0.5 * Interim assessment (2 module) + 0.125 * midterm test


Recommended Core Bibliography

  • Advanced macroeconomics, Romer, D., 2001

Recommended Additional Bibliography

  • Blanchard, O., & Fischer, S. (1989). Lectures on Macroeconomics. Cambridge, Mass: The MIT Press. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=nlebk&AN=11345
  • Economic growth, Barro, R. J., 2004
  • Foundations of international macroeconomics, Obstfeld, M., 1996
  • Gong, G., & Semmler, W. (2006). Stochastic Dynamic Macroeconomics: Theory and Empirical Evidence. Oxford University Press. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsrep&AN=edsrep.b.oxp.obooks.9780195301625
  • Introduction to economic growth, Jones, C. I., 2002