APPLIES TO ACADEMIC YEAR 2016/2017

DRE 7005 Topics in Search Theory

Responsible for the course
Plamen Nenov

Department
Department of Economics

Term
According to study plan

ECTS Credits
6

Language of instruction
English

Introduction
The aim of the course is to give the students an introduction to search theory, and its applications to labor economics, housing economics, and financial economics.

Learning outcome
The course aims to take the students to the research frontier on topics related to search theoretic models

Prerequisites
Admission to a PhD Programme is a general requirement for participation in PhD courses at BI Norwegian Business School. The course builds on DRE 4007 Advanced Macroeconomics and DRE 4010 Advanced Microeconomics.

External candidates are kindly asked to attach confirmation of admission to a PhD programme when signing up for a course with the doctoral administration. Other candidates may be allowed to sit in on courses by approval of the course leader. Sitting in on courses does not permit registration for courses, handing in exams or gaining credits for the course. Course certificates or conformation letters will not be issued for sitting in on courses.

Compulsory reading
Books:
Pissarides, Christopher A. 2000. Equilibrium unemployment theory. 2nd ed. MIT press. Selected chapters

Articles:
Blanchard, O and P. Diamond. 1989. “The Beveridge Curve". Brookings Papers on Economic Activity. 1989 (1). 1-76
Burdett, K. and Mortensen, D.T. 1998. Wage Differentials, Employer Size, and Unemployment. International Economic Review. 39. 257-273
Duffie, D., N. Garleanu and L. Pedersen. 2005. “Over-the-Counter Markets”. Econometrica. 73. 1815-1847
Hagedorn, M and I. Manovskii. 2008. “The Cyclical Behavior of Equilibrium Unemployment and Vacancies Revisited”. American Economic Review. 98 (4). 1692-1706
Hall, R. 2005. “Employment Fluctuations with Equilibrium Wage Stickiness”. American Economic Review. 95 (1). 25-49
Jovanovic, B. 1979. “Firm-specific Capital and Turnover”. Journal of Political Economy. 87 (6). 1246-1260
Jovanovic, B. 1979. “Job Matching and the Theory of Turnover”. Journal of Political Economy. 87 (5). 972-990
Kiyotaki, N. and R. Wright. 1989. “On Money as a Medium of Exchange”. Journal of Political Economy. 97. 927-954
Kiyotaki, N. and R. Wright. 1993. “A Search-Theoretic Approach to Monetary Economics”. American Economic Review. 83 (1). 63-77
Lagos, R. and R. Wright. 2005. “A Unified Framework of Money Theory and Policy Analysis”. Journal of Political Economy. 113. 463-484
Lucas, R. and E. Prescott. 1974. “Equilibrium Search and Unemployment”. Journal of Economic Theory. 7. 188-209
Moen, E. 1997. “Competitive Search Equilibrium”. Journal of Political Economy. 105 (2). 385-411
Rocheteau, G. and P.O. Weill. 2011. “Liquiditiy in Frictional Asset Markets”. Journal of Money, Credit, and Banking. 43 (7). 261-282
Rogerson, R., R. Shimer, and R. Wright. 2005. “Search-Theoretic Models of the Labor Market: A Survey”. Journal of Economic Literature. 43 (4). 959-988
Shimer, R. 2005. “The Cyclical Behavior of Equilibrium Unemployment in Vacancies”. American Economic Review. 95 (1). 25-49
Weill, P.O. 2007. “Leaning Against the Wind”. Review of Economic Studies. 74. 1329-1354
Wheaton, W. 1990. “Vacancy, Search, and Prices in a Housing Market Matching Model”. Journal of Political Economy. 98 (6). 1270-1292

Recommended reading

Course outline
In the first part of the course, the main search models of the labor market are discussed. These include the Diamond- Mortensen- Pissarides model, the Lucas and Prescott model, the Jovanovic model, and the Burdett- Mortensen model. Then we look at various extensions of the models with applications to product market search, monetary theory, financial markets and housing.

Students are required to participate in class – both in discussions and by presenting models/material from the reading lists.

Computer-based tools


Learning process and workload
Workload (6 ECTS)
Lectures 30 hours
Specified learning activities (including reading) 75 hours
Autonomous student learning (including exam preparation) 75 hours
Total 180 hours



Examination
30 hours home exam.
The course is graded pass/fail
Examination code(s)
DRE 70051 home exam accounts for 100% of the final grade in the course DRE 7005

Examination support materials
All written material

Re-sit examination
Re-takes are only possible at the next time a course will be held. When the course evaluation has a separate exam code for each part of the evaluation it is possible to retake parts of the evaluation. Otherwise, the whole course must be re-evaluated when a student wants to retake an exam.

Additional information
Honour Code
Academic honesty and trust are important to all of us as individuals, and represent values that are encouraged and promoted by the honour code system. This is a most significant university tradition. Students are responsible for familiarizing themselves with the ideals of the honour code system, to which the faculty are also deeply committed.

Any violation of the honour code will be dealt with in accordance with BI’s procedures for cheating. These issues are a serious matter to everyone associated with the programs at BI and are at the heart of the honor code and academic integrity. If you have any questions about your responsibilities under the honour code, please ask.