Midterm examination (15%)
Duration: 120 minutes. Closed-book except for a one-page formula sheet.
Section A — Analytical derivations (40%)
- Household Euler equation and borrowing constraints.
- Firm factor demands and capital accumulation.
- Solow steady state or Ramsey phase-diagram condition.
Section B — Model interpretation (30%)
- RBC equilibrium and productivity-shock propagation.
- New Keynesian Phillips curve and policy-rule interpretation.
- Debt-ratio dynamics and the interest-growth differential.
Section C — Quantitative reasoning (30%)
- Compute a steady-state object from supplied parameters.
- Interpret a short impulse-response table.
- Diagnose a timing or equilibrium-residual error.
Final examination (20% course component; course weighting as specified in the syllabus)
Duration: 180 minutes. Closed-book except for a two-page formula sheet.
Section A — Dynamic general equilibrium (25%)
Derive and interpret household and firm optimality conditions; identify equilibrium restrictions.
Section B — Monetary and fiscal policy (25%)
Analyze a specified shock in the three-equation New Keynesian model and derive the debt-ratio transition under supplied assumptions.
Section C — DSGE methods (25%)
Explain steady-state computation, first-order perturbation, generalized Schur decomposition, Blanchard–Kahn conditions, and state-space likelihood.
Section D — Open economy and heterogeneity (25%)
Interpret UIP and external adjustment; formulate an incomplete-markets household problem and explain distributional transmission.
Grading rubric
- Correct mathematical derivation and stated assumptions: 40%
- Economic interpretation and mechanism: 25%
- Quantitative accuracy and numerical reasoning: 20%
- Clarity, notation, and logical organization: 15%
Replication project and final research paper
A project submission must include a model description, parameter table, steady-state diagnostics, solution method, replication outputs, robustness exercise, and reproducibility instructions. The final paper must state a research question, model mechanism, counterfactual design, welfare criterion, and limitations of the quantitative exercise.