Advanced Computational Economics
Advanced Computational Economics
Block course, September 30th – October 11th 2024
The MA course "Advanced Computational Economics" will be taught over two weeks in October 2024. The lecture will take place from 9:00 to 12:30 and the exercise class from 14:00 to 17:00, both in room 319. The aim of the course is to introduce students to state-of-the-art computational techniques for quantitative economic research. Using the FORTRAN programming language, students will learn to apply numerical solution techniques to mathematical problems and economic models that cannot be solved analytically.
The course has no mandatory requirements. However, some programming experience any other language will proof beneficial. For those without any programming experience, participation in the undergraduate course Computational Economics is recommended. Of course, alternatively, working through the first chapter of Fehr and Kindermann (2018) (which provides an introduction to FORTRAN) is also possible.
In the following, the course content, structure and timeline, the course material, as well as requirements to complete the course successfully are explained in more detail. The course combines seven days of intensive lectures and exercise classes. Students need to bring their own computer to lectures and exercise classes. We encourage you to download the free programming language FORTRAN and other material from our website
on your computer before classes start. In case of problems, we will help you with the installation in the first class of the course. Then you will learn to write code and solve simple numerical exercises in FORTRAN. On this basis we can study the theoretical structure of various economic models and implement these models in FORTRAN.
Over the weekend, you will have to prepare a task in which you will write code in FORTRAN in a team of no more than two members. Once the exercises have been completed, you will prepare for the final exercise and/or ask questions. On the last day of the course, you will have to solve a programming exercise on your own. In this exercise, you will be given a FORTRAN code containing a number of programming errors. You have to correct these errors and run the programme. Both the programming exercise and the team assignment will be marked. The average of the two marks will be your final mark. However, you must pass both tests to complete the course successfully.
Daily time schedule for classes:
9:00-10:30 & 11:00-12:30 - Lecture class, where the specific material is explained.
14:00-17:00 - Exercise class, where you mostly programme by yourself.
Both classes take place in room 319. The course starts at 9am on 30 September - not (!) 15 minutes past 9am.
It is absolutely necessary to attend the lecture classes in order to manage the exercises! If there is an exam on a specific day, we will try to reorganize the schedule. Every participant will receive a set of Lecture Notes free of charge in the first lecture. The material there can (and should) be studied before attending the respective lectures.
Detailed course plan:
Day 1: Introduction to Fortran 90
Day 2: Numerical Solution Methods
Day 3: Numerical Solution Methods
Day 4: Indroduction to Dynamic Programming
Weekend: Prepare teamwork assignment
Day 5: Dynamic Programming: Value Functions and policy function
Day 6: Dynamic Macro I: Infinity horizon
Day 7: Life cycle models and risk: Labor supply and saving
Day 8: Exercise classes
Day 9: Programming exercise
More information, advanced study or preparation:
In case you need more information, want to prepare in advance or study additional material, you can consult selected chapters of the following book, which you can find in the library:
Hans Fehr and Fabian Kindermann (2018): Introduction to computational economics using Fortran, Oxford: Oxford University Press.
