Course Meeting Times
Lectures: 2 sessions/week, 75 minutes/session
Recitations: 1 session/week, 75 minutes/session
Course Description
This half-semester, 13-week course provides a fast-paced description of the canonical macroeconomic models of financial frictions and crises. We will cover various topics, including (i) financial amplification mechanisms; (ii) financial intermediation and credit crunches; (iii) coordination failures and bank runs; (iv) speculative bubbles and credit booms; (v) liquidity traps and deleveraging; and (vi) sudden stops and financial contagion.
Prerequisites
MIT students need to have taken 14.453 Economic Fluctuations.
Course Requirements
- One long problem set with weekly deadlines on individual problems (70% of the grade)
- Final exam (30% of the grade)
You can waive the final exam if you have met all the problem set deadlines and have an average score above 90%. (In 2026, the final exam was waived.)
