ECONOMICS 7344, Spring 2006
Bent E. Srensen
April 24, 2007
Final Exam, May 3 4 questions. All sub-questions carry equal weight except when
stated.
1. (10%) Explain in detail what is meant by Excess Smoothness of Consumption. (Note: Start by
explaining whi
ECONOMICS 7344, Spring 2006
Bent E. Srensen
February 25, 2007
Midterm Exam 1, February 22 4 questions. All sub-questions carry equal weight
except where indicated.
1. (15%) Assume that income follows the AR(1) process
yt = 20 + 0.2 yt1 + et ()
where et is
ECONOMICS 7344, Spring 2006
Bent E. Srensen
March 22, 2006
1
The eect of income shocks on consumption in Halls 78 model
This note basically summarizes pp.8187 of Deatons (1992) book Understanding Consumption
(with an attempt to spell out some issues in mo
Bent E. Srensen
ECONOMICS 7344 MACROECONOMIC THEORY II, Spring 2007
Homework 3. Monday February 5, due Wednesday February 14.
1. Romer, problem 6.1, pp. 339340. (Note: This demonstrates the workings of Jensens
inequality. Log-linear approximations used to
ECONOMICS 7344, Spring 2006
Bent E. Srensen
March 21, 2007
Midterm Exam 2 6 questions. All sub-questions carry equal weight.
1. (20%) Assume that Halls PIH-model holds. Assume that the rate of interest is 10% and
that labor-income follows the ARMA-process
ECONOMICS 7344, Spring 2005
Bent E. Srensen
March 1, 2005
The Euler Equation-general form
Consider a consumer who maximize the expected utility of present and future consumption subject
to some constraints. (Typically, a life time budget constraint but th
ECONOMICS 7344, Spring 2012
Bent E. Srensen
February 24, 2012
The eect of interest rates on consumption
Consider the Euler Equation and let us for the moment assume that the interest rate is timevarying and known (i.e., the interest rate is non-stochastic
ECONOMICS 7344, Spring 2005
Bent E. Srensen
March 28, 2005
The consumption CAPM (CCAPM).
There are many versions of the consumption CAPM, depending on the assumed utility function of
consumers. The choice made in Romer is one, but I dont like that choice
ECONOMICS 7344, Spring 2006
Bent E. Srensen
March 27, 2006
Excess Sensitivity tests of Halls 78 model
The implication of Halls 1978 model is that consumption is a Martingale, i.e.,
Et1 Ct = 0 .
The natural way to test this implication (on micro or macro d
ECONOMICS 7344, Spring 2005
Bent E. Srensen
April 8, 2005
Midterm Exam 2, April 13 4 questions. All sub-questions carry equal weight.
1. (30%) Consider the PIH model. Assume that a consumers income follows the AR(1) process
yt = 2 + 0.5yt1 + et ()
where e
ECONOMICS 7344, Spring 2007
Bent E. Srensen
January 30, 2007
1
Reading Guide to Romer Chapter 5.
This chapter can be confusing but does make some interesting points which is why we cover it.
This note is intended to help making it less confusing.
Section