The course presents first the basic neoclassical real business cycle model. Second, it describes modern asset pricing theory covering the equity and risk free rate puzzles both in endowment and in production economies. Third, it briefly introduces the student to the role of financial frictions in macroeconomics. Fourth, it presents an introduction to macroeconomics with heterogeneous agents. Finally, the student is exposed to some basic numerical solution techniques like value function iteration and simulation of a simple heterogeneous agent economy without aggregate uncertainty.