2020 Applied Macroeconomics

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Academic unit or major
Undergraduate major in Industrial Engineering and Economics
Hori Takeo 
Course component(s)
Mode of instruction
Day/Period(Room No.)
Mon5-6(W935)  Thr5-6(W935)  
Course number
Academic year
Offered quarter
Syllabus updated
Lecture notes updated
Language used
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Course description and aims

This course covers the intermediary macroeconomics. The basic knowledge covered in Macroeconomics I and II is required. This course focuses on the micro-foundation for macroeconomics. Students study the Ramsey growth model and its application including the New Keynesian theories.

This course has two aims. The first is to explain the importance of the micro-foundation for macroeconomics. The second is to understand the Ramsey growth model as an intermediary for the graduate level macroeconomics.

Student learning outcomes

By the end of this course, students will acquire
1) Basic knowledge of the Ramsey growth model
2) Basic knowledge of business cycle theory
3) Basic knowledge of economic growth theory


Macroeconomics, Mico-foundations, Ramsey model, New Keynesian model, Economic Growth

Competencies that will be developed

Specialist skills Intercultural skills Communication skills Critical thinking skills Practical and/or problem-solving skills

Class flow

This course uses slides to explain the basic knowledge. Complicated calculations and proofs of theorems are explained in detail using blackboard.

Course schedule/Required learning

  Course schedule Required learning
Class 1 Introduction Explain the micro-foundations for macroeconomics.
Class 2 The Ramsey Growth Model (1) - Introduction Explain the motivation of the Ramsey Growth Model.
Class 3 The Ramsey Growth Model (2) - The Euler Equation Explain the optimal consumption path.
Class 4 The Ramsey Growth Model (3) - Capital Accumulation and Consumption Explain the dynamics of consumption and capital.
Class 5 Implications of the Ramsey Growth Model (1) - Theory of Consumption Explain the permanent income hypothesis.
Class 6 Implications of the Ramsey Growth Model (2) - Tobin's q Explain the optimal investment.
Class 7 Implications of the Ramsey Growth Model (3) - The Real Business Cycle (RBC) Theory Explain theories of business cycles.
Class 8 Implications of the Ramsey Growth Model (4) - Fiscal Policy Explain fiscal policies in the Ramsey growth model.
Class 9 Labor Market (1) - Job Search Explain job search and the matching function.
Class 10 Labor Market (2) - Downward Wage Rigidity Explain the downward wage rigidity.
Class 11 The New Keynesian (1) - The Micro-foundation for the AD-AS model Explain the micro-foundation for the AD-AS model.
Class 12 The New Keynesian (2) - The New Keynesian Phillips Curve Explain the New Keynesian Phillips curve.
Class 13 The New Keynesian (3) - The AD-AS model Explain the New Keynesian AD-AS model.
Class 14 Economic Growth - The Solow Model Explain the Solow Growth Model.
Class 15 Summary Summary

Out-of-Class Study Time (Preparation and Review)

To enhance effective learning, students are encouraged to spend approximately 100 minutes preparing for class and another 100 minutes reviewing class content afterwards (including assignments) for each class.
They should do so by referring to textbooks and other course material.


Makoto Saito et. al. "Macroeconmoics" Yuhikaku ISBN978-4-641-05372-4

Reference books, course materials, etc.

No reference books are set.

Assessment criteria and methods

Final Exam

Related courses

  • IEE.B203 : Macroeconomics I
  • IEE.B204 : Macroeconomics II
  • IEE.B402 : Advanced Macroeconomics

Prerequisites (i.e., required knowledge, skills, courses, etc.)

The basic knowledge covered in IEE.B203 : Macroeconomics I and IEE.B204 : Macroeconomics II is required.

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