There are several different "camps" in international macroeconomics and finance. One of the main distinctions is between the use of ad hoc and optimizer models. The academic research frontier emphasizes the theoretical rigor and internal consistency of general equilibrium models fully articulated with optimizing agents. However, ad hoc models that preceded optimization models are still used in policy analysis and obviously still have something useful to say. This course finds a middle ground by covering both types of models. Some of the other departments in the field are flexible price versus sticky price models, rationality versus irrationality, and calibration versus statistical inference. The course covers these “mini-discussions”. Every approach has good and bad sides. Although many people are strongly convinced that research is needed in this area, I believe that beginner students should consider a balance of different views.
Topics covered include current and new econometric methodologies in financial econometrics, financial economics and international economics, filters and business cycle forecasting; structural breaks and economic imbalances; nonlinear models and generalized method of moments (GMM).