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New WEB page (Journal of Economic Education, 52(4), 372, 2021):

A collection of Dynamic Macroeconomics models, solved with Excel, can be found in the following webpage:

Dynamic macroeconomic models, perhaps with the exception of the Solow growth model, presents a number of difficulties to be taught in undergraduate economic courses. In this Web, we present a collection of spreadsheets for solving a variety of dynamic macroeconomics models in discrete time numerically, using as a computer tool a Microsoft Excel spreadsheet. The collection of models includes dynamic macroeconomic models with rational expectations, both non-microfounded and microfounded, constituting a novel approach that facilitates the learning and use of dynamic macroeconomic models in undergraduate Advanced Macroeconomics courses and, in particular, for the teaching of dynamic general equilibrium models, which have become the principal tool for macroeconomic analysis nowadays, at an undergraduate level. Models solved in Excel include a dynamic IS-LM model, the Dornbusch model of exchange rate overshooting, the basic household maximization problem, the household maximization problem with labor supply, the Tobin’s Q model, the basic Real Business Cycle (RBC) model, a RBC model with Specific-Investment Technological Change (ISTC), the Solow growth model, and the Ramsey optimal growth model.

Two alternative methods are used for solving dynamic macroeconomic models in Excel. The first one consists in using the Solver tool included in Excel for solving micro-founded models in which some economic agent objective function must be maximized. Whereas this approach offers a simple way to solve models, as we only need to directly introduce in the spreadsheet the initial equations of the models, and no analytical solution is needed, this method suffers from the “black-box” problem, just like other more advanced codes and software available for solving these type of models. The second method consists in numerically simulate the model, by simply introducing the equations in Excel and calibrating the exogenous variables and parameters of the models when the model is linear. For micro-founded dynamic macroeconomic models where non-linearities appears, the model must first be solved analytically and linearized before numerically simulated directly in the spreadsheet. In this second method, no computer optimization algorithm is needed.

The main objective of this Web is to offers a spreadsheet-based method for numerically solving dynamic macroeconomic models, including Dynamic General Equilibrium models, without the requirement of learning computing languages as MatLab or R. The reason why we use a spreadsheet like Microsoft Excel is because this software is easy to learn and is already well known, at least to some degree, by students.