Course Meeting Times

Lectures: 2 sessions / week, 1.5 hours / session

Recitations: 1 session / week, 1.5 hours / session


The prerequisites for this course are 14.122 Microeconomic Theory II and 14.452 Economic Growth.


First Half

This is the first half of an advanced macroeconomics course aimed at second year PhD students. Prof. George-Marios Angeletos will cover the second half, which will be kept largely disjoint this year. On the methodological side, our agenda includes learning how to formulate and solve optimal policy problems. In terms of topics, we will study fiscal and monetary policy and, if time permits, touch on a few other issues.

Second Half

Business cycles and financial crises hinge on shifts in expectations: booms are sustained by optimistic beliefs about future economic activity; credit crunches and financial crashes are associated with dramatic shifts in such beliefs. But what causes shifts in these kinds of beliefs? And how does this matter for policy? The second half of the course will seek to shed some light on these issues. To this goal, we will cover recent work on multiple equilibria, global games, and informational fictions.


The grade for the entire class will be determined by combining the average grade from:

Problem sets 50
Final paper 50