Advanced Macroeconomics

Course content

Being graduate, the course builds upon the macroeconomics courses in the bachelor program and presupposes corresponding qualifications. The course extends models from these courses in different directions and introduces new models. The emphasis is on complete dynamic models, taking forward-looking expectations, uncertainty, and market imperfections in the goods, labour and credit markets into account in a systematic way.

Fiscal and monetary policy questions are analysed in the light of these models. For example, how can "fiscal sustainability" of a given set of government spending and taxation rules be assessed? What is the role of monetary and fiscal policy in business cycle stabilization under alternative circumstances, including a liquidity trap?

Specific topics in the course:

  • The continuous-time overlapping-generations model, budget policy and general equilibrium effects of public debt 

  • Tobin’s q and firms’ investment decisions 

  • the housing market in macroeconomics 

  • speculative bubbles 

  • macroeconomics with imperfect competition and nominal and real price rigidities 

  • the consumption/saving decision under uncertainty, precautionary saving

  • different approaches to business cycle theory

  • credit and business cycles, with an application to the Great Recession 2008


MSc programme in Economics – elective course

Learning outcome

The aim of the course is to endow the student with:


  • Insight into the basic theoretical concepts, mathematical methods and models of modern macroeconomics.
  • Knowledge of the major empirical regularities in the behaviour of aggregate economic variables in the short, medium, and long run.
  • Knowledge of analytical tools necessary for understanding economic evolution at the aggregate level, for making macroeconomic forecasts and for policy analysis.



  • Ability to apply the concepts, methods, tools and theories learned during the course.
  • Ability to evaluate the models from a theoretical as well as empirical point of view.
  • Ability to analyze, assess, argue, organize, and put into perspective the different topics in the course.



  • Proficiency of bringing into play the achieved knowledge and skills in new contexts.
  • Ability along these lines are essential for being qualified to work in the economic research and forecast divisions of companies, organisations and government institutions.


Lectures, class exercises, and midterm paper.

Groth, C.: Lecture Notes in Macroeconomics, a text in the pipeline. Will be available at the course website.

Bernanke, B. S., and A. S. Blinder: Credit, Money, and Aggregate Demand, American Economic Review, vol. 78, No. 2, 1988, 435-39.

Elmendorf, D., and N. G. Mankiw: Government Debt. Chapter 25 in Handbook of Macroeconomics, vol. 1C, Amsterdam 1999.

Mishkin, F. S.: Symposium on the Monetary Transmission Mechanism, J. of Economic Perspectives, vol. 9, no. 4, 1995, 3-10.

Yellen, J. L.: Efficiency models of unemployment, American Economic Review, vol. 74, No. 2, 1984.

Possibly a couple of additional articles and short notes, to be announced later.

BSc in Economics. It is strongly recommended that Macro C/Micro III has been followed prior to taking "Advanced Macroeconomics".

It is a prerequisite to master macroeconomic models at a level corresponding to Romer: Advanced Macroeconomics, 2. ed., 2002 (chapters 1-2, 10-11), including knowledge of methods of intertemporal optimization (optimal control theory) and analyses of dynamic systems (difference and differential equations, phase diagrams etc.). The course is calculus intensive.


The course consists of 2 hours of classes (lectures) every week and 2 hours of exercise classes every week for 14 weeks.

Timetable and venue:
To see the time and location of classroom please press the link under "Se skema" (See schedule) at the right side of this page (16E means Autumn 2016).

You can find the similar information partly in English at
-Select Department: “2200-Økonomisk Institut” (and wait for respond)
-Select Module:: “2200-E16; [Name of course]””
-Select Report Type: List
-Select Period: “Efterrår/Autumn – Weeks 30-3”
Press: “ View Timetable”

7,5 ECTS
Type of assessment
Written examination, 3 hours under invigilation
Individual written closed-book exam at the computers of Copenhagen University.
The exam assignment is in English and can be answered in English or in Danish. Language must be chosen at the course registration.
Without aids
Marking scale
7-point grading scale
Censorship form
External censorship
100% censorship
Criteria for exam assessment

Students are assessed on the extent to which they master the learning outcome for the course.

A perfect score of 12 at the final exam is given if the student is able to demonstrate in a clear and indisputable way to have obtained accurate and thorough knowledge, skills and competences along these lines.

Single subject courses (day)

  • Category
  • Hours
  • Lectures
  • 28
  • Class Exercises
  • 28
  • Preparation
  • 147
  • Exam
  • 3
  • English
  • 206