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Course Objective

This advanced course extends the foundational knowledge from the introductory DSGE course. It is designed to equip participants with hands-on, practical skills in building, customizing, and applying sophisticated DSGE models for specific country contexts. Participants will learn advanced calibration, parameter estimation, and policy simulation techniques, enabling them to tailor DSGE models to the unique economic structures of individual nations.

Target Audience: Policy analysts, researchers in government and central banks, academicians, and staff of international organizations engaged in macroeconomic policy guidance.

Prerequisite: It is strongly recommended that participants first complete the “Introduction to DSGE Modeling” course or possess equivalent foundational exposure to DSGE models and MATLAB/Dynare.

Detailed Course Curriculum

The course progresses through these advanced modules:

  1. Advanced Technical Proficiency

    • Advanced skills in MATLAB and Dynare programming

    • Implementing advanced loop-statements in DSGE models

  2. Advanced Model Architecture

    • Deep dive into the advanced theoretical structure of DSGE models

    • Incorporating market imperfections:

      • Wage and price rigidities

      • Optimizing vs. rule-of-thumb consumer behavior

    • Advanced skills in inter-temporal analysis

  3. Country-Specific Model Customization

    • Hands-on, block-by-block construction of a DSGE model for a benchmark country of choice

    • Country-specific calibration of model parameters

    • Estimation techniques for country-based structural parameters

  4. Stochastic Shocks & Policy Analysis

    • Designing and implementing stochastic shocks derived from real-world policy questions

    • Crafting and running targeted policy simulations

    • Analyzing the response of monetary policy to fiscal shocks within the model framework

  5. Output Analysis & Communication

    • Generating and interpreting Impulse Response Functions (IRFs)

    • Professional interpretation of results and standard reporting formats

    • Discussion on the real-world application and limitations of DSGE models

Mode of Delivery & Expectations

The course emphasizes collaborative, applied learning to tackle the complexity of advanced DSGE modeling.

  • Project-Based, Group Work: Participants will work in small groups to benefit from synergy and collaborative problem-solving. Each group will work on customizing a model for a selected country.

  • Final Presentation: Groups are expected to present their customized model, policy simulations, and key findings at the conclusion of the course.

  • Critical Skill: A core outcome is the advanced skill of interpreting and communicating complex model results to inform policy.

Important Note for All Participants:

  • Online Participants: Timely submission of assignments is mandatory to adhere to the course schedule. Extensions may incur additional facilitation costs.

  • Foundational Knowledge: Ensuring you meet the prerequisite (introductory DSGE/Matlab) is crucial for success in this advanced course.

Outcome: Graduates of this course will possess the expert capability to customize, estimate, and simulate advanced DSGE models for specific countries, conduct robust policy analysis, and professionally communicate findings to inform economic decision-making.

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