Advanced Economic Theory II

Part 1 of the course teaches students the fundamentals of applied theory: technical issues as well as classical insights that can be ported to a variety of environments. The course provides some perspective on why we do applied theory and how to make applied theory actually applicable. Students are graded on rapid modeling exercises. Part 2 of the course covers dynamic decision making and dynamic contracts with a focus on continuous time models. The second half introduces a large toolset from stochastic calculus and shows how these techniques can be used in a variety of economic problems. Grades are based on two homework assignments.