Econ 429: Advanced Macroeconomics III

Welcome to this web page! This class is taught by Christian Zimmermann. This class meets on Tuesdays and Thursdays 7:45-9:30 AM in room 311, Monteith Building.

Office hours for this class are Wednesdays 8-12 AM or by appointment.


This class will use the following textbook: Lars Ljungvist and Thomas J. Sargent, Recursive Macroeconomic Theory, MIT Press 2000. A second edition was published in 2004, you can use either for this class. It should be available at the UConn Bookstore (Co-op). Also, if you have David Romer, Advanced Macroeconomics, McGrawHill 1996, from Econ 419, keep it. We will also cover a few chapters in Thomas F. Cooley (ed.), Frontiers of Business Cycle Research, Princeton University Press, 1997, which you may want to buy if you intend to specialize in macro.

We will not cover every chapter of the textbook, and I will cover some material not covered in the textbook. In particular, some recent working papers or articles will also be covered. They are mentioned below, whenever possible with a link to an online version.


  1. Value functions and Bellman equations

    Ljungqvist and Sargent, Chapters 3, 4, 5. A refresher with emphasis on numeraical solutions.

  2. Recursive equilibria

    Ljungqvist and Sargent, Chapters 7, 8, 12.

  3. Real business cycles

    Cooley, Chapters 1, 2. More details than in ECON419.

  4. Ricardian Equivalence

    Ljungqvist and Sargent, Chapter 10.

  5. Asset Pricing

    Ljungqvist and Sargent, Chapter 13.

  6. Search

    Ljungqvist and Sargent, Chapters 6, 26.

  7. Self-Insurance

    Ljungqvist and Sargent, Chapter 16, as well as Deaton (1991) and Hansen-Imrohoroglu (1992).


There will be a mid-term and a final exam. Each will last a full class. I will also sprinkle a certain number of homeworks here and there, both to entice you to work without delay and to allow me to check we are on the right track. You will also be asked to write a short essay on a rather narrow topic from Ljungqvist and Sargent. The formula will be:

A word about grades. When I grade, the average is usually around 60%. This allows me to reward better those who do well. Do not be too alarmed when you get a grade that is lower than those you get in other classes. But if it is really low, you should do something about it...

Essay Topics

The essay should be 8 pages long, plus a bibliography of at least 10 items. At least three must be articles (no more than two from the same journal), at least three must be unpublished working papers. Topics can be from those in the Ljungqist and Sargent textbook that we will not cover, or another topic. The topic needs to be first approved by me. Topics covered by other students in recent years are not eligible.

A few links

To contact me: Phone: 6-3272, Email: