Behavioral Macro and Complexity

This course provides a state of the art overview of complex economic systems with boundedly rational heterogeneous agents. The leading paradigm in macroeconomics assumes that economic agents (households, firms, investors) are perfectly rational in making their decisions. Experimental and empirical evidence indicate that this assumption is too demanding. A central question in the course will be: which emerging macro behavior arises through the interactions of micro decisions of boundedly rational heterogeneous agents and how can policy affect micro and macro behavior.

Topics:

• Animal spirits and boom and bust cycles
• Bounded rationality and adaptive learning
• Complex dynamics, tipping points, chaos and bifurcations
• Heterogeneous expectations in asset pricing and macroeconomic models
• Macro laboratory experiments
• Monetary policy and asset prices under bounded rationality

Lectures: 2 times 2 hours for 5 days

• Day 1: Complex dynamics + computer simulations
• Day 2: Heterogeneous expectations in cobweb and asset pricing models
• Day 3: Empirical validation & behavioral New Keynesian models
• Day 4: Experimental macro economics
• Day 5: Presentations

Former occurrences of this course

22-26 Aug 2022   |   23-27 Aug 2021