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ECOM-R318 Advanced Macroeconomics 4: Real Business Cycles, 5 cr 
Code ECOM-R318  Validity 01.01.2017 -
Name Advanced Macroeconomics 4: Real Business Cycles  Abbreviation Advanced Macroe 
Scope5 cr   
TypeAdvanced studies
  GradingGeneral scale 
    Can be taken more than onceno
Unit Master's Programme in Economics 

Antti Ripatti 

Target group 

Master’s Programme in Economics (Research track). Open also to doctoral students in economics.


First spring term, annually in the fourth period

Learning outcomes 

After the course, the student should

  • Understand and master the real business cycle model (RBC)
  • Be able to augment the RBC model with other economic features and shocks
  • Understand the asset pricing in general equilibrium models
  • Understand incomplete markets models
Completion methods 

The course consists of lectures (24 hours) and exercise sessions (8 hours), where solutions to the homework assignments are discussed. The lectures and exercise sessions are not mandatory. There is a written final exam based on the lecture material and the homework assignments. The homework assignments consist of analytical exercises. They familiarise the student with the theory and calculations typically required in applying and extending the models that have been studied in the lecture. They also involve the interpretation of model economies.


The course builds upon the contents of Advanced Macroeconomics 1, 2 and 3.

Recommended optional studies 

Advanced Microeconomics 1 and 2 courses would benefit learning.


The course starts with an introduction to real business cycle model (RBC). It extends it to various directions such as open economy and asset pricing. Finally, the course introduces incomplete markets models.

Study materials and literature 

In addition to the lecture material, selected parts of Recursive Macroeconomic Theory by Ljungqvist and Sargent, 3rd edition (2012, MIT Press; 2nd edition, 2004, available online); Applied Intertemporal Optimization by Wälde (2011, available online); Introduction to Modern Economic Growth by Acemoglu (2009) and Stephanie Schmitt-Grohe and Martin Uribe, Open Economy Macroeconomics (2017).

Activities and teaching methods in support of learning 

The course material is delivered through the course website. The website also contains moderated discussion groups that support learning. Problem sets are designed to support learning of the course material.

Assessment practices and criteria 

The grade on a scale from 0 (fail) to 5 is based on the points earned in the final exam (70%) and in the homework assignments (30%).


Current and future instruction
Functions Name Type cr Teacher Schedule
Registration Advanced Macroeconomics 4: Real Business Cycles   Lecture Course  Niku Määttänen  17.03.21 -02.06.21

Future examinations
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