Deutsch Intern
  • none
Chair of Public Finance

Computational Economics

Computational Economics

Goal:

The goal 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 how to apply numerical solution techniques to mathematical problems and economic models that cannot be solved analytically. The following section explains the course content, structure, timeline and course material, as well as the requirements for successfully completing the course.

Requirements:

In order to prepare for the course, please ensure that you have the code and Fortran compiler installed and running (!) on your laptop (which you should bring to the lectures and exercises). Go to ce-fortran.com and download the repository on the GitHub website. Click on the green "Code" button and download the ZIP package. Unzip the ZIP file on your laptop and select your operating system (Windows, Mac or Ubuntu) in the "Installation" folder. Finally, run the relevant installation file, which usually takes around 10 minutes depending on your laptop's speed. You will then be able to install a suitable Fortran compiler on your operating system, allowing you to study all the codes that come with the lecture and exercise material.

If you have any problems, the chair will help you with the installation during the first class or beforehand. You will learn to write code and solve simple numerical exercises in FORTRAN. Building on this, we will study the theoretical structure of various economic models and implement these models in FORTRAN.

Knowledge of micro- and macroeconomics may be useful. For your own safety, you should already have successfully completed Makroökonomik II.

Examination:

You will have to prepare an assignment in which you will write code in FORTRAN in a team of no more than two members. On the last day of the course, you will have to solve a programming exam on your own. In this exam, 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 exam and the team assignment are marked. The average of the two marks will be your final mark. However, you must pass both tests to complete the course successfully.

 

Detailed course plan:  

  • Introduction to programming with Fortran 90
  • Numerical solution methods: Nonlinear equation systems and function minimization
  • The static general equilibrium model
  • The life-cycle model and intertemporal choice  
  • The overlapping generations model: Long-run equilibrium and transitional dynamics

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.