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A lot of my peers are writing empirically oriented bachelor projects, where they take some topic ("tax evasion", "pollution", "ricardian equivalence", "liquidity trap", "fiscal multiplier") and look at the data, and seek to explain the mechanics behind the data by use of models. So it's mostly empirical and investigative, with a bit of theory to support the arguments made.

My question is, what would be a good idea for a purely theoretical bachelor project in macroeconomics? Is there something like that which would be a good idea for a bachelor project, as opposed to an empirical study?

The reason is that I have a very strong background in mathemathics, so I would like to use that to my benefit and write a technical project, but I am not sure what kind it would be.

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  • $\begingroup$ if you want something theoretical and that will pay you off in the future (ME) program, take a look at Mathematical annex of Barro's book on Macroeconomics. Interteporal choice is nice option. But the real challenge is some comparisons of modelling economic expectations (a lot of math and phylosophy (theory) behind this). $\endgroup$
    – garej
    Apr 5, 2017 at 18:35

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I would be careful about confusing topics and tools. Theoretical mathematics and data analysis are ways that you can approach a specific topic. No matter what topic you choose, you can apply your mathematical tools. I would recommend looking for something that interests you at a conceptual level and then seeing how you can apply your given set of tools to answer it.

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First of all, you have to find yourself a research question. Then, your research question would give you the clue to use either theoretical or an empirical framework.

To be precise, I give an example. If you try to find out in which cases, pollution tax could discourage or encourage economic growh ? What are the main mechanisms that allow a higher/lower growth with a pollution tax ? In this case, probably you should use a theoretical model (mainly an endogenous growth model)

On the contrary, if you would like to "measure" the effect of pollution tax on growth, you could make an empirical analysis. Maybe a VAR (vector autoregressive) or a cointegration model.

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With theory, it is hard to innovate unless you go to the actual knowledge frontier. My suggestion are several, and complementary:

  • go to seminars in your faculty about topics that you might be interested on. Although you might not understand everything, you can get some ideas what people is researching on, and the questions and method they use.

  • Talk to a professor/teacher/PhD student which works in areas of your interest. Ask her/him about what issues people is researching on, and gaps in knowledge they see. They might point you to papers which could inspire you.

  • Check recent working papers in which people is working on. You can find many here. Yous select your area of interest.

  • Check recently published papers. Your library should have a place displaying latest journal editions. Alternatively, search them online. Here is a list of journals, in a ranking fashion.

  • Follow Hal Varian's suggestion about writing models.

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If you want to explore and flex your mathematical knowledge, try to derive a model for an environment not usually modeled.

For example; try and derive a growth model for your university, and back test it across other universities and their growth

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  • $\begingroup$ But to know that is an environment "not usually modeled", it is better to consult the "experts". $\endgroup$
    – luchonacho
    Apr 5, 2017 at 8:44

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