Aubhik Khan
8 October 2010
Economics 806
Assignment 3
1. Do exercise 3.6 (b) in Stokey and Lucas.
1. Do exercise 3.8 in Stokey and Lucas.
2. Do exercise 3.13 (a) and 3.13 (b) in Stokey and Lucas.
3. S
HW 5
1 (a) Planners Problem:
, nt
cfw_ct , kt+1
t=0
= arg max
X
t u(ct , 1 nt )
t=0
subject to
ct + kt+1 (1 )kt + Akt nt1
nt [0, 1]
ct > 0
k0 given
Taking first order conditions w.r.t.
ct : D1 u(ct
HW1
Stokey & Lucas Problems
2.1 The fact that f : R+ R+ is continuously differentiable, strictly increasing and strictly concave
comes directly from the definition of f as
f (k) = F (k, 1) + (1 )k
wit
Economics 806
HW 6
1 (a) Define the following notation, ci0 is the date-0 consumption of household i, i = 1, 2, and
ci1 (zj ) is its consumption in date-1 when the aggregate state is zj , j = 1, 2. Le
Aubhik Khan
30 September 2010
Economics 806
Assignment 2
1. Do exercise 2.3 in Stokey and Lucas.
2. (The method of successive approximations). Consider the sequence problem.
V (k0 ) =
max
fct ;kt+1 g1
HW2
Stokey & Lucas Problem
2.3 (a) We can write the value function using the optimal path for capital given by (8) as
X
v(k0 ) =
t log(kt kt )
t=0
X
log(1 )
+
t log kt
=
(1 )
t=0
The optimal policy
Aubhik Khan
Economics 806
9 November 2010
Assignment 5
1. Consider the neoclassical growth model without uncertainty but where the represetative
household values leisure. Production is Cobb-Douglas in
Aubhik Khan
15 October 2010
Economics 806
Assignment 4
1. There are two types of households, in equal proportion, indexed as h = 0; 1. Households of
type 0 have a l > 0 units of time endowed in even p