Consumption and Saving (Syllabus)
This class is intended to help second year PhD students develop a research question in an area of the microfoundations of macroeconomics, and acquire some of the skills needed to answer interesting research questions. The main focus of the course is on empirical work. We will discuss empirical papers that evaluate the usefulness of standard consumption models, or derive empirical facts that these models cannot easily explain, and that thus lead to extensions of the standard models. You will get familiar with the most heavily used data sets in this research area, and we will discuss both reduced form and structural estimation techniques. The models underlying the empirical exercises are mostly heterogeneous agents models. This is a very active and fascinating line of research. Many questions in macroeconomics cannot be answered satisfyingly with a representative agent model. We will hence look at models that explicitly take into account heterogeneity of households, and will analyze aggregate implications of microeconomic non-linearities. Emphasis will also be put on dynamic programming techniques.


- Handout 1

Lecture Slides
- Lecture 1 (December 9, 2009)
- Lecture 2 (December 16, 2009)
- Lecture 3 (January 27, 2010)
- Lecture 4 (January 27, 2010)
- Lecture 5 (January 27, 2010)
- Lecture 6 (February 2, 2010)
Problem Sets
- Problem Set 1 (December 7, 2009)
- Problem Set 2 (December 16, 2009)
- stochasticgrowth.m
- datacex.dta
- lifecycle_retire.m
- markov.m