Economic Modelling

Code:

2ECON16

Acronym:

MEC

Keywords
Classification	Keyword
CNAEF	Economics

Instance: 2020/2021 - 2S

Active?	Yes
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	18	Bologna Syllabus	1	-	7,5	56	202,5

Teaching language

English

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 job 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. Some economic models, for instance: price variation, housing market and Solow, the Core-Periphery model.

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; the Core-Periphery model with more than two regions; Game Theory models.

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. Discrete versions of the Core-Periphery model.

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

Distributed evaluation without final exam

Assessment Components

Designation	Weight (%)
Teste	50,00
Apresentação/discussão de um trabalho científico	50,00
Total:	100,00

Amount of time allocated to each course unit

Designation	Time (hours)
Estudo autónomo	146,50
Frequência das aulas	42,00
Apresentação/discussão de um trabalho científico	14,00
Total:	202,50

Eligibility for exams

The student is approved if the final mark is greater than or equal to 9,5 points.

Calculation formula of final grade

Final mark through continuous assessment= (mark of the written part + mark of the oral part)/2

The written part is made up of 5 small written tests and the mark is obtained from the 4 best. These tests take place in class.
The oral part is the result of the discussion/intervention/presentation of models, or part of models, or solution techniques for models, during class.

The final exam in the "Época de Recurso" is available only to those students of special status and can take the form of an oral exam, or any other considered adequate.

Special assessment (TE, DA, ...)

The exams in special periods or occuring because of special status may be oral, or any other considered adequate.

Observations

There may be an oral exam to certify the mark obtained in the written part.

While using remote learning, the oral part will be assessed using
(i) your participation in the Forum not just from questions you ask but also from answers/comments to another student's or my posts,
(ii) your participation in the Homework (even if you cannot solve a problem, you can comment on your difficulty),
(iii) your activity on Zoom, if this works well.