Dynamic Macroeconomics
A.Y. 2025/2026
Learning objectives
The course is an introduction to the analysis of modern Dynamic Macroeconomics. It applies relevant formal economic reasoning and advanced dynamic optimization techniques to study such macroeconomic issues as: (1) Optimal investment decisions, and (2) Optimal growth theory (both exogenous and endogenous). Before attending Dynamic Macroeconomics, students should have already taken a course in Mathematics (static optimization), and a course in macroeconomics (graduate/advanced level).
Expected learning outcomes
At the end of the course students will be able to: (1) Apply the fundamental dynamic optimization techniques to the most relevant macroeconomic problems; (2) Approach autonomously the reading and critical understanding of the latest models in the field of dynamic macroeconomics; (3) Interpret economically the theoretical results of such models, along with their main economic policy implications.
Lesson period: Second trimester
Assessment methods: Esame
Assessment result: voto verbalizzato in trentesimi
Single course
This course cannot be attended as a single course. Please check our list of single courses to find the ones available for enrolment.
Course syllabus and organization
Single session
Responsible
Lesson period
Second trimester
Course syllabus
DYNAMIC ECONOMIC GROWTH THEORY
- The basic facts of economic growth
- The neoclassical growth model
- Empirical applications of neoclassical growth models
- Alternative theories of economic growth, with special attention to 'AK-type', and to one/two-sector(s) human-capital-based growth models.
DYNAMIC INVESTMENT THEORY
- The basic model (main assumptions)
- The firm's cash-flow
- Investment adjustment costs and their impact on investment decisions
- Equilibrium analysis and transitional dynamics of the model.
- The basic facts of economic growth
- The neoclassical growth model
- Empirical applications of neoclassical growth models
- Alternative theories of economic growth, with special attention to 'AK-type', and to one/two-sector(s) human-capital-based growth models.
DYNAMIC INVESTMENT THEORY
- The basic model (main assumptions)
- The firm's cash-flow
- Investment adjustment costs and their impact on investment decisions
- Equilibrium analysis and transitional dynamics of the model.
Prerequisites for admission
Before attending Dynamic Macroeconomics, students should already have taken (and passed) a course in Mathematics (at least, static optimization), and a course in macroeconomics (at a graduate/advanced level).
Teaching methods
The course is composed of theoretical and practical classes. The aim of the practical classes is to show students how they can concretely (e.g., in view of the analysis of real-world macroeconomic problems) use the theory learnt in the theoretical classes.
Teaching Resources
DYNAMIC ECONOMIC GROWTH THEORY
R.J. Barro, and X. Sala-i-Martin, Economic Growth, Second Edition, 2004, Cambridge, Massachusetts: MIT Press
C.I. Jones, and D. Vollrath, Introduction to Economic Growth, Third Edition, 2013, New York and London: W.W. Norton & Company
Specific parts of the course can be covered by using also published papers and/or (parts of) chapters of the following books:
D. Acemoglu, Introduction to Modern Economic Growth, 2009, Princeton: Princeton University Press
G. Alogoskoufis, "Dynamic Macroeconomics", 2019, Cambridge, Massachusetts: The MIT Press.
DYNAMIC INVESTMENT THEORY
Fabio-Cesare BAGLIANO, and Giuseppe BERTOLA: "Models for Dynamic Macroeconomics", Oxford: Oxford University Press, 2007 (First Edition in paperback).
R.J. Barro, and X. Sala-i-Martin, Economic Growth, Second Edition, 2004, Cambridge, Massachusetts: MIT Press
C.I. Jones, and D. Vollrath, Introduction to Economic Growth, Third Edition, 2013, New York and London: W.W. Norton & Company
Specific parts of the course can be covered by using also published papers and/or (parts of) chapters of the following books:
D. Acemoglu, Introduction to Modern Economic Growth, 2009, Princeton: Princeton University Press
G. Alogoskoufis, "Dynamic Macroeconomics", 2019, Cambridge, Massachusetts: The MIT Press.
DYNAMIC INVESTMENT THEORY
Fabio-Cesare BAGLIANO, and Giuseppe BERTOLA: "Models for Dynamic Macroeconomics", Oxford: Oxford University Press, 2007 (First Edition in paperback).
Assessment methods and Criteria
The exam consists of a written short (no more than 10/15 pages) essay in which students demonstrate: (1) To have reached an adequate knowledge of the fundamental dynamic optimization techniques applied to the analysis of some relevant macroeconomic problems; (2) To approach autonomously the reading and critical understanding of the latest models in the field of dynamic macroeconomics; (3) To interpret economically the theoretical results of such models, along with their main economic policy implications.
Professor(s)