Course offerings

Preliminary Module

Course Professor
Introductory Mathematics Pedro Mira, Álvaro Remesal

Introductory Mathematics:
The goal of this course is to serve as "warm up" and to prepare students for the first-year maths course and for those courses which rely more heavily on mathematical methods at CEMFI's graduate program.

- Preliminaries: Sets, functions and methods of proof.
- Single-variable calculus.
- Linear algebra.

Introductory Statistics Laura Crespo , Martín Almuzara

Introductory Statistics:
This course pursues three goals:
1. Reviewing basic statistical notions such as a probability distribution, a correlation, a test of hypothesis…
2. Illustrating of those notions using examples taken from recent economic research papers.
3. Helping students gain familiarity with the concepts by means of computer simulations.

The detailed program of the course is as follows.
- Basic notions
- Describing univariate distributions
- Describing multivariate distributions
- Distributions of sample statistics
- Using statistical methods in economic applications

Summer between years 1 and 2

Activity Professor
Summer Internships Dante Amengual (coordinator)

Summer Internships:


Module I: Core courses / Term 1

Course Professor
Mathematics Dante Amengual

This course provides a complete and rigorous review of the main mathematical methods used in economics.

- Mathematical analysis: continuity and differentiability.
- Static optimization.
- Dynamic analysis: differential and difference equations.
- Dynamic optimization.
- Introduction to dynamic programming.

Microeconomics Guillermo Caruana

This course studies the behavior of the fundamental microeconomic agents -consumers and producers- and revises the main results of competitive general equilibrium theory. Likewise, this course provides a rigorous introduction to game theory with complete information.

- Consumer choice and demand theory.
- Production costs and supply theory.
- Competitive general equilibrium theory.
- Fundamental welfare theorems.
- Game theory with complete information.

Statistical Methods in Econometrics Pedro Mira

Statistical Methods in Econometrics:
This course provides students with the required knowledge in statistics for econometric courses and for the topics with statistical content in other courses of the Program. This course reviews the basic concepts of probability theory, inference and asymptotic theory, with special reference to regression models.

- Random variables and probability distributions.
- Multivariate random variables.
- Sample distributions.
- Estimations and hypothesis testing.
- Asymptotic theory.

Module II: Elective courses / Term 4

Course Professor
Labor Economics Joan Monrás

Labor Economics:
This course is an introduction to various topics in labor economics. We will start by discussing models of labor supply and labor demand, and the determinants of the market equilibrium. We will then analyse imperfections in the labor market, market failures, and inequality – all potential reasons for public policy intervention. We will conclude by introducing methods for the evaluation of public policies. Throughout the course we will combine theory with empirical evidence.


Microeconometrics Manuel Arellano

This course is concerned with econometric techniques for the analysis of micro data. Topics in both theoretical and applied econometrics are covered, with a view to illustrate the interaction between models, data and methods.

- GMM & optimal instruments.
- Linear panels.
- Discrete choice.
- Duration models.
- Endogenous selection and treatment effects.
- Differences in differences and synthetic controls.

Urban Economics Diego Puga

Urban Economics:
In this course in urban economics we will study theory and evidence on how productivity, amenities and congestion determine the size and composition of cities and their evolution. We will examine the determinants and consequences of location choices made by firms and workers. We will also explore the importance of cities for aggregate economic development. The research strategies, modelling tools and problems of measurement and identification discussed, while examined in the context of urban issues, are intended to be useful to students interested in a wide variety of topics.


Economics of Banking Javier Suarez

Economics of Banking:
This course focuses on understanding the role of banks in the markets for credit and liquidity. Starting with the industrial organization approach to banks, it covers contributions to financial intermediation theory based on information economics, as well as the analysis of the foundations and main tools for the micro- and macro-prudential regulation of banks.

- The industrial organization approach to banks.
- Credit market imperfections.
- Banks as delegated monitors.
- Banks as liquidity providers.
- The prudential regulation of banks.
- Systemic and macro-prudential aspects of banking.

Quantitative Macroeconomics Josep Pijoan-Mas

Quantitative Macroeconomics:
This course introduces the techniques of modern quantitative macroeconomics to study economies with household heterogeneity, with a special focus on the life cycle dimension.
One important aspect of the course is the emphasis on learning how to solve these economies in the computer. To this end, there is sequence of problem sets that will guide you to solve the canonical models of Aiyagari (QJE 1994) and Huggett (JME 1996).
In addition, the course devotes an increasing amount of time to study economies with firm heterogeneity and the problem of optimal allocation of factors across production units.

- The neoclassical growth model with heterogeneous households and incomplete markets
- Numerical methods for solving heterogeneous agents economies
- Some model extensions: life cycle, endogeneous labor, and out of steady state
- Human capital investment and endogenous earnings inequality
- Endogenous market incompleteness and partial insurance
- Firm heterogeneity

Module I: Core courses / Term 2

Course Professor
Uncertainty and Information Guillermo Caruana

Uncertainty and Information:
This course revises the main models of modern information economics, using the analysis of choice under uncertainty and game theory with incomplete information as a benchmark.

- Theory of choice under uncertainty.
- Game theory with incomplete information.
- Adverse selection and signaling.
- Moral hazard, incentives and contracts.
- Mechanism design.
- Auctions.

Macroeconomics I Josep Pijoan-Mas

Macroeconomics I:
This course provides the student with a basic knowledge in macroeconomics through the analysis of the neo-classical growth model and its implications for aggregate allocations in the long run.

- The Neoclassical Growth Model.
- Multi-Sector Models and Growth.
- Overlapping Generations.
- Firms.
- Households.
- Money.

Econometrics Manuel Arellano

This course introduces the main models and methods for estimation and inference used in econometrics both for time series and for panel and cross-sectional data.

- Regression.
- Maximum likelihood and large sample testing.
- Bayesian inference.
- Heteroskedasticity and grouped data.
- Stochastic processes.
- Time series regression.
- Instrumental variables.
- Treatment effects.

Module II: Elective courses / Term 5

Course Professor
Development Economics Monica Martinez-Bravo

Development Economics:
This course focuses on the understanding of the process of economic development. The central questions of the course are:
1) why are some countries so much poorer than others?
2) what are the main barriers to the process of economic development?
3) what are the main barriers that prevent the poor to escape from poverty?
4) why do these barriers exist and persist?
The purpose of the course is to give you a sense of the frontier research topics and a good command of the methodologies used in the field of Economic Development. The main emphasis will be in empirical and micro-studies, although some applied theory studies and macroeconomic analysis will also be discussed.

- Global trends in growth, development and poverty. - Credit and insurance markets. - Health, nutrition, productivity. - Education and human capital. - Technical change and technology adoption. - Institutions as a fundamental cause of long-run development. - Corruption and local accountability.

Topics in Empirical Economics Susanna Esteban

Topics in Empirical Economics:
This is an advanced course in Industrial Organization. This course is designed to bridge between theory and empirics, and, for the most part, aims to understand how empirical models in the structural IO literature arise naturally from the theoretical literature.

With this aim, the course will be structured around frontier topics in Industrial Organization. Throughout the course, we will follow this structure: first, we will identify the economic (Industrial Organization) question that we want to answer to then determine which tools are needed to answer it. This will often lead us to follow an ordered sequence. We will start by analyzing the main models in the theoretical literature that have asked the question that we want to address (or part of it), covering the models' assumptions and findings---this will be important as it will allow us to identify the theoretical findings that our empirical model should embody. Then we will work on developing an empirical model and place special emphasis on highlighting how our empirical model embodies existing theoretical work and findings. We will also address why a structural empirical approach may or may not be necessary. Lastly, we will discuss the models’ computational requirements and their empirical implementation. Among the topics covered, we will include IO topics that bridge between different fields in Economics and that belong to very active research fields.

Asset Pricing II Dante Amengual

Asset Pricing II:
This course discusses continuous-time asset pricing theory and continuous-time derivative pricing models. Intuitively, we relate some asset returns to other asset returns (derivative assets), appealing to absence of arbitrage and risk-neutral pricing arguments. To do so, some knowledge of stochastic calculus is needed, so we introduce it. Finally, we look at some applications, specifically, interest rate and credit risk models.


International Economics Paula Bustos

International Economics:
The course covers the main theories of international economics and the associated empirical evidence.

- Gains from Trade.
- Neoclassical Models of Trade.
- Economies of scale and product differentiation.
- Heterogeneous firms, selection and intra-industry reallocations.
- Multinational Firms.
- International Trade and Productivity.
- Globalization and Inequality.

Public Economics Caterina Calsamiglia

Public Economics:
The goal is to understand the different components that determine human capital accumulation in a society. We will then proceed to analyzing how policy can shape the levels and quality of education attained and describing different attempts to empirically verify such impacts.

- Human capital accumulation and returns to education.
- Education as a local public good.
- School Choice.
- The determinants of school quality:
- Class size.
- Teacer.
- Peer Effect.
- Incentives (expectations, extrinsic payoffs, intrinsic).
- Outcomes in the short run vs long run.

Module II: Elective courses / Term 3

Course Professor
Industrial Economics Gerard Llobet

Industrial Economics:
This is an introductory course to the classical topics in industrial organization together with some recent developments. Due to the lack of a comprehensive model, we shall cover different applications that range from the internal organization of the firm to the implications of product differentiation, including other topics like the strategic decisions of firms to enter or exit a market or the effects of advertisement policies. Although we will mostly focus on theoretical models, we will use empirical applications to widen our understanding of the main concepts.

- Theory of the firm.
- Monopoly and price discrimination.
- Oligopoly.
- Product differentiation.
- Entry and exit.
- Advertising.

Macroeconomics II Nezih Guner

Macroeconomics II:
This course expands the knowledge acquired in the Macroeconomics I course, extending the set of models and theories following recent developments in the discipline.

- One Sector Growth Model (LN).
- Dynamic Programming under Certainty (LN).
- Numerical Methods for DP problems.
- Dynamic Programming under Uncertainty.
- Real Business Cycles.
- Analyzing stochastic version of one-sector growth model with linearization techniques.
- Labor Market Frictions.
- Goods Market Frictions.

Time Series Econometrics Enrique Sentana

Time Series Econometrics:
This course studies econometric models for describing and predicting economic and financial time series, and analyzing the interrelations suggested by economic theory.

- Univariate and multivariate time series.
- Unit roots and cointegration.
- Non-linear models.
- Inference with dependent observations.
- Specification tests.
- Dynamic regression models.

Asset Pricing I Enrique Sentana

Asset Pricing I:
This course analyzes of the main models for the valuation of risky assets and their applications to different financial instruments.

- The Fundamental Theorem of Asset Pricing.
- Mean-Variance Frontiers.
- Static Asset Pricing Models.
- Dynamic Asset Pricing Models.
- Derivatives.
- Fixed-Income.
- Microstructure of Financial Markets.

Corporate Finance Javier Suarez

Corporate Finance:
This course reviews the different theories on the determinants of firms’ financial decisions, most notably those concerning their financial structure as well as events such as mergers and acquisitions, and initial public offerings.

- Modigliani-Miller irrelevance propositions.
- Theories based on taxes and financial distress costs.
- Theories based on conflicts of interest and agency problems.
- Asymmetric information theories.
- Payout policies.
- Mergers and acquisitions.
- Initial public offerings.

Module III: Introduction to research / Term 2-6

Course Professor
Applied Economics Workshop Pedro Mira, Irma Clots

Applied Economics Workshop:
The workshop has two main goals. First, to learn and to practice the techniques of an academic presentation. Second, to become acquainted with some of the methodological issues and the empirical evidence in different areas of Applied Economics. Each session consists of a couple of presentations by students, based on selected papers, followed by an informal discussion in class. Each session will be attended by the coordinator of the workshop and another faculty member whose area of expertise is close to the topic of the session.

- Regulation in electricity markets.
- Transmission of monetary policy.
- Growth.
- Experimental economics.
- Natural experiments in labor economics.
- Intergenerational transmission of human capital.
- Economics of ageing.
- Corporate finance and investment.
- Business cycles and structural VAR’s.
- Industry entry models.
- Asset pricing.

Economic Policy Workshop Rafael Repullo

Economic Policy Workshop:
The purpose of this workshop is to discuss important economic policy issues using the tools provided in the Master courses. The focus is not just on the issues themselves but on economic policy angles related to them. Each session will consist of two paired presentations and, for some of them, discussions, based on the recommended readings. The readings highlight different aspects of the topic at hand. A general discussion will take place during and after the presentations, in which all students are expected to participate.

- Active Labor Market Policies.
- Education Policies.
- Economic Inequality.
- Fiscal Policy.
- Financial Regulation.
- Intellectual Property.

Master Thesis Manuel Arellano (coordinator)

Master Thesis:
The Master Thesis is an original research piece in the field chosen by the student. Each student is assigned an adviser who helps him or her in identifying a suitable research topic and oversees the whole process.

In the course of their work on the thesis, students make two preliminary presentations. The first one is in February and consists of a presentation of the research project. The second takes place in May and allows students to present their first results. The Master Thesis defense takes place in a public session in June. This work is evaluated by the adviser and another examiner, and it is later graded in a plenary faculty meeting.


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