Dynamic Optimization & Economic Applications (Recursive Methods)

As taught in: Spring 2003

Photograph of four coins laid flat between the points of a caliper.

Photograph of coins in a caliper. (Courtesy of Daniel Bersak.)

Instructors:

Prof. Iván Werning

MIT Course Number:

14.128

Level:

Graduate

Course Features

Course Description

The unifying theme of this course is best captured by the title of our main reference book: "Recursive Methods in Economic Dynamics". We start by covering deterministic and stochastic dynamic optimization using dynamic programming analysis. We then study the properties of the resulting dynamic systems. Finally, we will go over a recursive method for repeated games that has proven useful in contract theory and macroeconomics. We shall stress applications and examples of all these techniques throughout the course.