Share a little bit of your experience on this issue.
I have studied several rounds of advanced macroeconomics at the domestic undergraduate and master’s level, such as Ramsey model, dynamic programming, contraction mapping, OLG, and learned it several times. Very awkward.
I went to the United States to study for phd, and in the first year, four professors of macroeconomics taught intensively for one semester before I suddenly became enlightened. The biggest difference between the macro that I learned during phd and what I learned before is whether the concept of “macroeconomy is a system” has been established.
A macro model usually has two parts: decision problem and market equilibrium. The first part of the decision problem is relatively straightforward, that is, each agent is optimized, and the optimality condition is marginal benefit = marginal cost. The second part is that the market needs to clear, and the agreed law of motion should be consistent with actual law of motion. The second part establishes the existence of the macroeconomy as a “system”, which is also the key to model solving and for explaining phenomena. In the previous study of phd, I always spent my energy on understanding the decision problem, but neglected to understand the market equilibrium condition (which usually exists in the form of market clearing condition in the basic model).
Why is this so? Because in the previous study of phd, the teacher taught us to list the equilibrium condition, and then either solve it manually in special cases, or do some simple numerical solutions. The equilibrium conditions are logically parallel, so a model is a system of difference equations – we don’t care which equation comes first and which comes after when solving a system of equations.
The macro model is not like that. Emphasis is placed on the Minnesota School’s formulation of macromodels. Economists of this school have very strict and even rigid requirements for the expression of the model. They must clearly define the individual state variable, aggregate state variable, write the optimality condition of the decision problem, and write the individual state and aggregate state or asset price law of motion consistency. conditions and market clearing. During the first quarter of our macro, we only learned one thing, how to define equilibrium. The teacher’s question is to come up with a variety of model variants to allow us to define equilibrium, and the test will test these. No one can’t do that part of the test, but no one can get a full score, because it’s too difficult to satisfy all the statements accurately. When I was studying at that time, I was quite disgusted. I felt that I was wasting my great youth in trying to define equilibrium over and over again, and my understanding of the macro economy had no progress. Later, I did macro research, listened to seminar, and saw a lot of more and more complex models. Only then did I deeply understand the meaning and value of such training, and understand what it means to sharpen a knife without accidentally chopping wood. In a complex model, the logical relationships between variables are inextricably linked, and by grasping a few steps to define an equilibrium, the macro model becomes clear. Of course, whether it can be solved in the end depends on each person’s skill, but at least understanding other people’s paper can get twice the result with half the effort. When I was writing the paper, the instructor emphasized that equilibrium must be defined clearly and accurately. Once I finished presenting my paper, I was criticized for not having a page of slides that defined the balance, which scared me to make it up quickly.
I would recommend the best macroeconomics textbook in the world, by Dirk Krueger
https://perhuaman.files.wordpress.com/2014/06/macrotheory-dirk-krueger.pdf _ _
The link is a version from many years ago. Later, his lecture notes were expanded into two courses, the first one on the macro foundations of the first grade, and the second on the heterogeneous agent model. Chapters 2, 3, and 6 of the textbook revolve around defining equilibrium, or in other words, the core of this part is to teach us how to define equilibrium, not to tell us what the rbc/growth model is. Chapter 2 also talks about risk sharing, which is not taught in most first-grade macro classes, but is very important.
This textbook is suitable for friends who want to systematically study macroeconomics, understand the frontier literature of macroeconomics, and even engage in macroeconomics research. It can only help us lay a solid foundation for understanding the macroeconomic model, and the future journey will have to follow different circumstances. If you want a quick look at what macroeconomics has to say about some specific macroeconomic issues, then it’s not for you. The brilliance of this textbook lies in its “methodological” nature, but the specific content is actually very small, only a few classic models are introduced. Almost all PhD-level macroeconomics textbooks are unsuitable for “opinions on the problem,” as they are more or less methodologically and research-oriented. If you want to understand the research progress of the literature on a specific issue, it is better to read the journal of economic perspective, journal of economic literature, annual review of economics, handbook of macroeconomics, or other various review articles, or IMF research reports and working papers more effective.
Another way to learn macroeconomics is to write code. I found that many students who study macro have never written code (I myself have learned a lot of advanced macro and have not written a line of matlab code at the undergraduate and postgraduate level), which is not acceptable. Only in the numerical solution model and simulation can we understand a model, understand why the macro economy is a system, and understand why a model is a laboratory. After all, there are very few model experts who can solve it now, and it is not helpful to understand the model by listing the equlibrium condition. Mention dynare. Many macro models can be solved with dynare, which is convenient and fast. If you are doing research, of course no problem, there is no reason not to use a convenient method. However, if it is to deepen the understanding of the macro model, it is recommended to use value function iteration or time iteration to solve several macro models honestly and recursively, and realize what these models are doing.
Finally, a word about math. Strictly speaking, to learn the macro from the bottom, the mathematics required is very deep, read the book stokey-lucas to know. However, for most applied macro research, you don’t need so much mathematics, you can only know basic calculus and probability statistics, and you may also need to know a little bit of contraction mapping and numerical knowledge. So, if you don’t want to be an extremely hard core macro theorist (the kind that proves uniqueness), don’t focus on complicated math.
Source: Zhihu www.zhihu.com
Author: Yang Yu
[Zhihu Daily] The choice of tens of millions of users, to be a big cow to share new things in the circle of friends.
click to download
There are 4 more answers to this question, see all.
Further reading:
How to study for Senior Economist (Finance)?
This article is reproduced from: http://www.zhihu.com/question/440602564/answer/2579056101?utm_campaign=rss&utm_medium=rss&utm_source=rss&utm_content=title
This site is for inclusion only, and the copyright belongs to the original author.