University of Minnesota
ECON 8107, Macroeconomic Theory
Spring 2012, Mini 1




Instructor: Fabrizio Perri, fperri@umn.edu, 612 625-7504 (U) 612  204-5526 (Fed), Office: Hanson, 4-177, OH: after class and by appt.

TA: Risabh Kirpalani, kirp0005@umn.edu, OH: Th, 9.30-11.30

Lectures:  T,Th, 2.30-3.45pm, CSOM 1-127

Recitations:  T, 4.00-5.15pm, BlegH 245

Requirements: Homeworks (30%), Midterm (30%), Final (30%), Class participation (10%)

Important Dates:

Tuesday January 31. Problem set 1 due in class
Tuesday February 14. Midterm during recitation time
Thursday February 23. Problem set 2 due in class
Tuesday February 28. Double Class
Thursday March 1. Recitation
Thursday March 8. Problem set 3 due in class and final exam during class time, Final is cumulative


          The representative agent model and its foundations

                Asset pricing
                Distributional dynamics with complete markets
                A quasi representative agent

           Departing from the representative agent

                Income fluctuations problem
                Economies with incomplete markets without and with aggregate uncertainty
                Distributions as state variables
                Limited enforcement

Material: Will be indicated or posted here after or before each lecture


Lecture 1. A 30 minutes history of macro from the Great Depression to the Great Recession. Graph 1. Graph 2. Deriving the representative agent result in static and dynamic economies. On the state of macro. Lecture Note 1

Lecture 2. Asset pricing. Lecture note 2. Financial Markets and the Real Economy, The equity premium: why is it a puzzle?

Lecture 3. Distributional dynamics with complete markets. Lecture note 3. Caselli and Ventura, Chatterjee

Lecture 4. Complete markets with heterogeneous preferences or skills. Maliar and Maliar. Lecture note 4

Lecture 5. Income Fluctuations Problems I. Lecture note 5

Material up to this point will be included in the midterm

Lecture 6. Income Fluctuations Problems I. Lecture note 6

Lecture 7. Income fluctuations in general equilibrium, I, Exponential utility, Wang

Llecture 8. Income fluctuations in general equilibrium II, Aiyagari, Lecture note 7

Lecture 9. Transitions and aggregate uncertainty. Lecture note 8

Lecture 10. Limited Enforcement. Lecture note 9


Problem sets:

Problem set 1. Due Tuesday January 31, in class

Problem set 2. Due Thursday February 23, in class

Problem set 3. Due Thursday March 8, in class