There are three parts to this course. The first acquaints a student with dynamic macroeconomic data and the stylized facts seen in most macroeconomic systems. Characteristics of the data related to economic growth, economic cycles, and the interactions between economic growth and economic cycles that are seen as particularly important when viewed through the lens of system dynamics will be emphasized. The second acquaints a student with the basics of macroeconomic growth and business cycle theory. This is accomplished by presenting well-known models of economic growth and instability, from both the orthodox and heterodox perspectives, via system dynamics. The third part attempts to enhance a students ability to build and critique dynamic macroeconomic models by addressing such topics as the translation of difference and differential equation models into their equivalent system dynamics representation, fitting system dynamics models to macroeconomic data, and evaluating (formally and informally) a model’s validity for the purpose of theory selection.
Prerequisites
SD 550 System Dynamics Foundation: Managing Complexity.