Introduction and overview. A dynamic portfolio balance macroeconomic model. Rational expectations: some basic issues. Rational expectations and policy neutrality. Nonuniqueness issues in rational expectations models. Macroeconomic stabilization policy under rational expectations. Rational expectations and saddlepoint behavior. The representative agent model. Equilibrium in a decentralized economy with distortionary taxes and inflation. Dynamic analysis of taxes. The representative agent in the international economy. Optimal monetary and fiscal policy. Endogenous growth models and balanced growth paths. Long-run growth and transitional dynamics. Continuous-time stochastic optimization. A stochastic intertemporal model of a small open economy.