CEMLA Course: Macroeconomics and Numerical Methods

The modern analysis of macroeconomics and in particular of macroeconomic policies, requires the use and mastery of numerical approximation techniques, solution of partial and general equilibrium models, and policy simulation. Since the Membership brings together a group of professionals dedicated to the proposal and solution of economic problems, focused on the formulation and conduct of monetary policy, the Course arises as an initiative of CEMLA to offer an introductory look to analysts and researchers who are familiar with theoretical aspects of modern macroeconomics, but whose exposure to quantitative methods is rather incipient. The course is interactive, combining theoretical discussions related to each particular tool and its application on the computer, for which MATLAB execution codes will be shared. Applications of interest in the field of macroeconomics will be developed, taking advantage of the flexibility of the codes so that the user can use them for their own benefit and allow them to answer their own research questions.

The discussion is organized in three sections. The first one deals with discrete approximation methods of continuous stochastic processes, necessary to implement in the computer algorithms whose theoretical properties are widely documented in the most well-known textbooks. The second section focuses on representative agent economies, whose use is widespread in the profession, thus offering the perfect prelude to the discussion of models that have been gaining popularity in times when heterogeneous effects of macroeconomic policies are of special interest. The third section will deal with the solution of heterogeneous agent economies.

CEMLA has three main projects in the area of macroeconomic and financial indicator information offered to the membership. The first is related to the compilation of selected macroeconomic data for the Membership, which is updated periodically. Among its purposes is to have a source of comparable regional conjunctural data. The second is on the estimation of term premiums for some Latin American economies. The third is on the estimation of a fiscal-monetary model for some economies in the region.