Economic Modelling

Code:

2ECON16

Acronym:

MEC

Keywords
Classification	Keyword
CNAEF	Economics

Instance: 2014/2015 - 2S (of 18-02-2015 to 17-06-2015)

Active?	Yes
Responsible unit:	Agrupamento Científico de Economia
Course/CS Responsible:	Master in Economics

Cycles of Study/Courses

Acronym	No. of Students	Study Plan	Curricular Years	Credits UCN	Credits ECTS	Contact hours	Total Time
ME	10	Bologna Syllabus	1	-	7,5	56	202,5

Teaching language

Portuguese

Objectives

The successful students will be able to use models in their work as economists. The successful students will be able to (i) solve dynamic models; (ii) introduce changes in existing models; (iii) construct simple models; and (iv) interpret the result obtained from the models both from the point of view of information gained and the model's limitations.

Learning outcomes and competences

The successful students will have acquired the technical skills and the critical capacity essential for a successful career in a market where these characteristics are more and more an indispensible asset.

Working method

Presencial

Pre-requirements (prior knowledge) and co-requirements (common knowledge)

Elementary micro- and macro-economics. Calculus and elementary linear algebra.

Program

1. Dynamics: differential and difference equations.

1.1- Methods for solving 1-dimensional differential equations: separable, exact and Bernoulli. Economic models: price variation, housing market and Solow.

1.2- Qualitative study of 1-dimensional differential equations. Qualitative properties of the Solow model.

1.3- Systems of differential equations. Solution for linear systems and qualitative study of linear and non-linear systems. Dynamics models for Cournot duopoly and IS-LM.

1.4- Solution and qualitative study of difference equations. Geometrical methods for phase diagrams on the line. The logistic equation and its applications to Economics. Samuelson's multiplier-accelerator model and Cournot's discrete model for duopoly.

2. Parametric models: consequences of parameter variation; benefits and drawbacks of introducing further parameters.

2.1-Differential equations on the line depending on parameters: bifurcation and robustness. Robustness of the Solow model. Bifurcation in a model of price variation in general equilibrium  and in the core-periphery model.

2.2-Saddle-node bifurcation. Invariant spaces for the study of the dynamics. An endogenous growth model with R&D.

2.3-Parametric study of the multiplier-accelerator model, of the discrete Cournot duopoly and discrete version of the core-periphery model.

Mandatory literature

Wei-Bin Zhang; Differential Equations, Bifurcations, and Chaos in Economics, World Scientific, 2005
Wei-Bin Zhang; Discrete Dynamical Systems, Bifurcations and Chaos in Economics, Elsevier, 2006
Giancarlo Gandolfo; Economic Dynamics: Study Edition, Springer, 2005

Comments from the literature

Scientific papers will be used when appropriate.

Teaching methods and learning activities

Presentation of the essential theoretical results together with examples and followed by the study of economic examples.

Evaluation Type

Evaluation with final exam

Assessment Components

Designation	Weight (%)
Exame	100,00
Total:	100,00

Amount of time allocated to each course unit

Designation	Time (hours)
Frequência das aulas	0,00
Total:	0,00

Calculation formula of final grade

The final mark is tht of the exam.