Lutz Hendricks - UNC - Department of Economics

Econ821: “Monetary Economics”

Spring 2016. Prof. Lutz Hendricks. UNC

Matlab and Programming | OLG model | Wealth distribution | Economic Growth | Cross-country income gaps


Mar–4: Please pick a paper on cross-country income gaps and human capital to present, starting Mar–12.

Feb–4: From next week onwards, the class will meet at 3:30 in Gardner 008.

As we go along, I will update the code (and data) for this class on Github

The title is misleading. The course will focus on real macroeconomics. No money here.

In preparation for this class, I recommend:

  1. install Matlab on your laptop (see my Matlab Intro)
  2. familiarize yourself with Matlab
  3. read something about good programming practices (see Notes on programming)
  4. start reading QuantEcon

Class meets Tu/Th 2–3:15pm in Gardner 007

Check this web site ( regularly for updates.



  1. Learn about state of the art research in selected areas of macro.
  2. Learn how to compute models and take them to the data.
  3. Identify potential topics for dissertation research. See my notes on finding research topics.

We cover the following broad topics:

  1. Economic growth
  2. Cross-country income gaps
  3. Within country income / wealth inequality.

Class structure

A mixture of lectures, student presentations, and hands-on programming.

The lectures present key papers in each topic.

We will then replicate the results of select papers using Matlab.

This class is somewhat experimental. We will have to figure out how to efficiently do programming in class as we go along. Suggestions are welcome.


The class is graded based on participation in class.

Students are expected to present and discuss state-of-the art papers on the topics we will cover.


Matlab and Programming

Jan–12 to 21: The material for this section is hosted at ReadTheDocs

Solving heterogeneous agent OLG models

Jan–26: Partial equilibrium (these are slides presented in class)

Jan–28: Stochastic model

Feb–2: Many period stochastic model

Feb–4: Computing the multi-period model

Wealth Distribution

Feb–9: Background lecture

Feb–11: Entrepreneurship

Feb–16: Student presentations (notes on their format)

Feb–18: Student presentations



Feb–25: Redistribution I

Mar–1: Redistribution II

Economic Growth

Mar–3: Growth facts

Cross-Country Income Differences

Mar–8: Background on cross-country income gaps

Human Capital

Mar–8: Human capital quality

Mar–10: Immigrant earnings

Mar–15 to 17: Spring break

Mar–22 to 29: Presentation and discussion of current papers (by students).


Mar–31: Misallocation: Agriculture

Apr–7 to 12: Student presentations

Computing Manuelli & Seshadri (2014 AER)

Apr–19: Notes on the model

Apr–21: Computation: household problem

Apr–26: Last class

End of Class