• Students can use macroeconomic theory to understand what determines intertemporal consumption and savings decisions, and can communicate the main insights, both with accuracy and intuition.
• Students can understand theoretical work published in scientific journals, reflect upon the underlying model, and discuss the findings.
• Students can formulate and analyze research questions with the help of the appropriate model and are capable to go further with economic model building.

• Understand the intertemporal constraints of economic agents and set up their constrained optimization problems by applying the method of Lagrange. Explore the arguments put forward verbally, graphically, and mathematically.
• Solve for the constrained optimal behavior of economic agents and analyze how it depends on interest rates, subsidies, taxes, and wages.
• Identify the crucial assumptions of the standard macroeconomic intertemporal decision theory and discuss the implications for consumption behavior.
• Formulate well-defined decision problems (with the required degree of formalism) and apply the Lagrange optimization method to derive the optimality conditions for these problems.

• Recall the theoretical models used to analyze various decision problems (see course content)

Course Content

1. Intertemporal Consumption and Saving
2. Labor and Leisure choice
3. Investment and Tobin’s Q
4. General Equilibrium