MACRO HW3 - whereas.75.9 and.95 initially have a positive...

Info icon This preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
HW # Anvar Suyundikov 2. a) “OUTPUT” Diagram: If theta is less that 5, output returns to zero but takes longer to return as theta increases. If theta is equal to five, it goes horizontal at 2. If theta is ten capital continues increasing and does not return to the steady state. “CONSUMPTION” Diagram: -For theta equal to .5, 1, and 2, consumption begins increasing and then approaches zero. As theta increases from .5 to 2, a larger theta has a smoothing effect. Theta=5 still has an increased smoothing affect but approaches .5. For theta=10, sharp increase with consumption approaching infinity as t approaches infinity. “CAPITAL” Diagram: -As with consumption and output, theta equal to .5, 1, and 2, capital eventually approaches 0. The other values of Theta also act similarly to those in consumption and output. “TECHNOLOGY” Diagram: -Not dependent on change in theta, therefore, exactly the same for all theta. b) “OUTPUT” Diagram: - Rho equal to 0, .25, and .5 has a negative slope for all the domain,
Image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: whereas .75, .9, and .95 initially have a positive slope and then goes down to zero like the others. As rho increased, maximum output level also increased and the affects of the shock lasted longer “CONSUMPTION” Diagram:-For all Rho observed, as rho increased, maximum output level also increased and the affects of the shock lasted longer. For Rho equal to 0, the slope was negative for all the domain and for all the others, slope was initially positive and then negative. “CAPITAL” Diagram:-For all rho, it begins with a positive slope and then a negative slope as it approaches zero. As Rho increases, maximum output increases and the time to return to the steady state increases. The initial slope is greater for smaller values of rho which means as rho increases, the shock has a slower affect on capital. “TECHNOLOGY” Diagram:-As Rho increases, the absolute value of the slope decreases. Note: all shocks began at one regardless of rho as anticipated....
View Full Document

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern