Skip to main content

Macroeconomics Q-Exam Syllabus

The qualifying exam in macroeconomics is offered twice each year, in the spring and again in late summer. The qualifying exam is not a final exam for the macroeconomics sequence, nor is it the explicit goal of the courses to teach the exam. The exam covers the topics on the following outline.

While students might expect that much of this material will be covered in Economics 6130 and 6140, not all of it will be, and the instructors may choose to devote time to topics not on the Q syllabus. Students are advised to clarify early on with their instructors what on this list will and will not be covered, so they can plan their studying accordingly.

1. Introduction to Dynamic Programming

  • Deterministic saving model
  • Endogenous labor supply
  • Aggregation
  • Stochastic saving model with quadratic preferences

2. Dynamic Programming

  • Concepts: metric spaces, contraction maps, fixed points
  • Equivalence of recursive and sequential formulations
  • Existence, uniqueness, monotonicity, concavity and differentiability of value functions

3. Search Model

  • McCall's model
  • Unemployment and worker flows
  • McNeil's career choice model
  • Mortensen-Pissarides-Diamond matching model

4. Discrete Markov Processes

5. Competitive Equilibrium with Complete Markets

  • Planner's problem
  • Date-0 and sequential trading competitive equilibrium
  • Recursive planner's problem and competitive equilibrium
  • Ricardian equivalence and the Modigliani-Miller Theorem

6. Asset Pricing

  • Equity premium puzzle
  • Disaster risk
  • Distorted beliefs
  • Endogenously incomplete markets

7. Overlapping Generations

  • Offer curve and stationary equilibria
  • Non-stationary monetary equilibria
  • Inflationary taxation and social security
  • Stochastic overlapping generation models

8. Stochastic Saving Model

  • Lucas and Prescott's island model
  • Mortensen-Pissarides-Diamond matching model
  • Kiyotaki-Wright model of money

9. Optimal Taxation

  • Primal approach and implementability constraints
  • History independence of optimal taxes
  • Lucas-Stokey model: tax smoothing and contingent government debt

10. Introduction to Macroeconomic Data

  • Extracting and measuring cyclical fluctuations
  • Stylized facts of economic growth
  • Business cycle stylized facts
  • Deterministic detrending
  • Hodrick-Prescott filter

11. Properties and Solution of the Basic Real Business Cycle Model

  • Dynamic optimization
  • Dynamic programming
  • General equilibrium growth model
  • Social planner’s problem vs. competitive equilibrium
  • Balanced growth path
  • Growth accounting
  • Solow residual
  • Stationarity-inducing transformation
  • Calibration
  • Certainty equivalence
  • Log-linear approximation
  • Method of undetermined coefficients
  • QZ decomposition
  • Optimal linear regulator
  • Technology shocks
  • Impulse response functions
  • Model simulation
  • Autoregressive processes
  • Stationarity

12. Performance and Some Extensions of the RBC Model

  • Indivisible labor
  • Investment technology shocks
  • Variable capacity utilization
  • Home production
  • Government consumption shocks
  • Labor and capital adjustment costs

13. Money and Output: Basic Facts and Flexible Price Models

  • Long and short-run monetary facts
  • Neutrality and superneutrality
  • Money demand
  • Shopping time and transaction cost models
  • Cash-in-advance
  • Money-in-utility
  • Liquidity effects
  • Speculative hyperinflations
  • Classical dichotomy
  • Money growth shocks

14. Measurement without Much Theory

  • Vector autoregressions
  • Wold decomposition theorem
  • Invertibility
  • State space representation
  • Identification
  • Long and short-run identification restrictions
  • Structural vector autoregressions
  • Time series representations of dynamic stochastic general equilibrium models
  • Narrative approach
  • Evidence on technology shocks
  • Evidence on monetary policy shocks
  • Evidence on fiscal policy shocks

15. Models of Nominal Rigidities

  • Monopolistic competition 
  • Dixit-Stiglitz aggregator 
  • Sticky price model 
  • Phillips curve
  • Calvo pricing
  • Quadratic cost of price adjustment
  • Taylor contracts
  • Menu costs

[updated February 2013]

Related Links

Main Office
Department of Economics
404 Uris Hall
Cornell University
Ithaca, N.Y. 14853
Phone: (607) 255-4254
Fax: (607) 255-2818