Course description

Business Cycles


This course is a graduate level course in macroeconomics, allowing theory to meet data. A special focus is on economic fluctuations and policies. To that end, the approach adopted emphasizes the dynamic dimension of interesting applied macroeconomic problems.

Course content

1. Stylized facts of business cycles

  • •Measuring business cycles (trend - cycles)
  • •The role of leading indicators
  • Sentiment index (Big data)
  • •Sources of business cycles, a story of different shocks

2. Advanced theories of business cycles (quantitative macroeconomics)

  • • Real Business Cycle models
  • • Can economic fluctuations be explained by technology shocks?

3. New Keynesian models and monetary and fiscal policy

  • • New Keynesian Phillips curve
  • • Taylor rules
  • Monetary and fiscal policy

4. Commodities and macroeconomics

  • • The role of oil price shocks for oil importing and exporting countries
  • • Optimal policy for resource rich economies

Learning outcome knowledge

This course is organized in a sequence of topics, where we address each topic in detail using both theory and applied methods. The empirical relevance of the different theories will be critically assessed. The course focuses on economic fluctuations in open economies, covering topics such as (i) the stylized facts of business cycles and the role of different shocks in the cycle, (ii) advanced theories of the business cycles (models og the real business cycle and New Keynesian models) (iii) the role of monetary and fiscal policy in the business cycle, (iv) commodities and macroeconomics

Exam organisation

  • Presentation: 20%
  • Written exam: 80%