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University of Minnesota
8107 Macroeconomic Theory

Fall 08  Mini 1

 

Basic info

Instructor: Fabrizio Perri, fperri@umn.edu, 612 625-7504 (U) 612  204-5526 (Fed), Office: Heller 1169, OH: after class and by appt.

Lectures:  T,Th, 14.30-15.45, Blegen 415

TA: Ali Shourideh,  OH  W. 5-7PM, web-page

Recitations:  T, 16.00-17.15, Blegen 260

Requirements: Homeworks (30%), Midterm (30%), Final (30%), Class participation (10%). The midterm will during recitation time on Tuesday February 19, the final will be during class time on Thursday March 13.

Topics: The foundations of the representative agent model. Asset pricing. Distributional dynamics with complete markets.

           Departing from the representative agent

                 The international real business cycle model with different asset structures

                 Income fluctuations problem. Economies with incomplete markets without and with aggregate uncertainty. Transitions. Distributions as state variables.

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

 

Lectures

Lecture 1. Deriving the representative agent result in a simple framework. Lecture Note 1

Lecture 2. Complete markets with heterogeneous preferences or skills. Maliar and Maliar

Lectures 3-4. The evolution of wealth distribution under complete markets. Lecture note 2. Caselli and Ventura, Chatterjee

Lectures 5-6. A basic model with heterogeneous agents. The IRBC model. Lecture note 3. Backus Kehoe and Kydland, Baxter and Crucini

Lectures 7-8. Models with a large number of agents: Income Fluctuations problems.  Lecture note 4

Lecture 9. More on income fluctuations. Lecture note 5

Lecture 10. Numerical methods for solving income fluctuations problems (IFP) . Notes on numerical methods

Lecture 11. IFP in general equilibrium: stationary equilibria with exponential utility. Wang

Lecture 12. IFP in general equilibrium: stationary equilibria with general utility. Lecture note 6. Aiyagari, Huggett

Lectures 13 & 14. IFP in general equilibrium: transitions and aggregate uncertainty. Lecture note 7. Krusell and Smith

 

Problem sets

Problem 1. Due Jan. 29 in class

Problem 2. Due Feb. 7 in class 

Problem 3. Due Feb. 14 in class

Problem 4. Due Mar. 11 in class