Problem Set 1
MSU EC 410
Prof. Ahlin
due 9/27/16
1. Two fictitious countries, Bigsea and Tadloch, produce only two products: boats, which are traded
internationally, and seafood restaurant meals, whic
Problem Set 4
MSU EC 410
Prof. Ahlin
due 11/22/16
1. Imagine there are two types of potential borrowers in a village, those with pi=0.7 and those with pi=0.9. As
in the adverse selection model discuss
Problem Set 2
MSU EC 410
Prof. Ahlin
due 2/22/18
1. Consider a country in which Y = 200 K25N3/5. Assume in this country they save 20% of
their income, population grows at 3% per year, and depreciation
Problem Set 3 Answers
MSU EC 410
Prof. Ahlin
due 11/8/16
1a.
Use the H-augmented Solow model to determine the a) instantaneous impact on GDP per capita, b)
instantaneous impact on consumption per capi
Problem Set 2
MSU EC 410
Prof. Ahlin
due 10/13/16
1. Consider a country in which Y = 200 K2/5N3/5. Assume in this country they save 20% of
their income, population grows at 3% per year, and depreciati
Problem Set 3
MSU EC 410
Prof. Ahlin
due 11/8/16
1a.
Use the H-augmented Solow model to determine the a) instantaneous impact on GDP per capita, b)
instantaneous impact on consumption per capita, c) l
Problem Set 2 Answers
MSU EC 410
Prof. Ahlin
due 10/13/16
1a.
Y = AF(K,N) = 200 K2/5 N3/5 , so A=200, F(K,N) = K2/5 N3/5.
f(k) F(k,1) = k2/513/5 = k2/5
In the long run, kt = sAf(k*) (n+d)k* = 0
sAf (k
Problem Set 4 Answers
MSU EC 410
Prof. Ahlin
due 11/22/16
1. Imagine there are two types of potential borrowers in a village, those with pi=0.7 and those with pi=0.9. As
in the adverse selection model
Midterm Review Guide
The midterm exam will be held on Wednesday, February 28 and will include one or two essay questions
and a series of short answer questions. The topics that might be covered can in
Growth rate: 1960-85
Growth rate: 196 O- 85
Growth rate21960- 85
A. Unconditional
J30)
N
5.5 6.5 7.5 8.5 9.5 10.5
Log output per working age adult: 1960
B. Conditional on saving and population growt
Practice Midterm 1
MSU EC 410
Prof. Ahlin
60 minutes/total points
Choose the best answer.
1. (1) The Harrod-Domar and Solow models disagree on which one of the following points:
a. a one-time increase
Problem Set 5
MSU EC 410
Prof. Ahlin
due 12/7/17
1.
Here we explore how dynamic lending can help solve the problem of limited
enforcement/strategic default. In particular, consider the model introduce
Problem Set 2
MSU EC 410
Prof. Ahlin
due 2/22/18
1. Consider a country in which Y = 200 K2/5N3/5. Assume in this country they save 20% of
their income, population grows at 3% per year, and depreciatio
Problem Set 1 Answers
MSU EC 410
Prof. Ahlin
due 9/28/17
1a.
If the exchange rate does a perfectly good job equating prices of traded goods, we know the
price of boats is the same in both countries, a
Problem Set 2 Answers
MSU EC 410
Prof. Ahlin
due 2/22/18
1. Consider a country in which Y = 200 K2/5N3/5. Assume in this country they save 20% of
their income, population grows at 3% per year, and dep
Introduction
What is economic development?
Level of economic development primarily
measured by:
average income = income per person GDP per
capita
(GDP = gross domestic product)
Rate of progress in d
Introduction
How did we get here? A brief History
0 AD 1000
Essentially zero growth in average income, living standards
Relatively equal average incomes across countries
Total income rose, and pop
Problem Set 3
MSU EC 410
Prof. Ahlin
due 11/7/17
1. Consider the Solow model with total factor productivity At constantly growing at rate g>0.
a. Determine the a) instantaneous impact on GDP per capit
Problem Set 2
MSU EC 410
Prof. Ahlin
due 2pm 10/13/17, to 201 Old Botany (leave under door)
1. Consider a country in which Y = 200 K2/5N3/5. Assume in this country they save 20% of
their income, popul
1
Data and Variables
The Merriam-Webster dictionary defines data as factual information (as measurements or statistics) used as a basis for reasoning, discussion, or calculation
(http:/www.merriam-web
Macroeconomics
Homework Set A
Behzad Diba
Fall 2017
1. In a stylized economy, only two goods are consumed. The relevant price and quantity data
for 1993 and 1999 are shown in the following table.
Pric
Practice Midterm 1 Answers
MSU EC 410
Prof. Ahlin
60 minutes/total points
Choose the best answer.
1. (1) The Harrod-Domar and Solow models disagree on which one of the following points:
a. a one-time
PRODUCTIVITY A
What is A?
A is called total factor productivity
An increase in A increases production directly by increasing efficiency of use of inputs
Technology interpretation:
A includes ideas, pa
?
Policy Implications of this model:
IF THE GOAL IS TO INCREASE GROWTH RATE
Increase the savings rate.
Government saving tax, and invest in firms or public capital (e.g. Soviet Union)
Reduce taxes on
Economic Growth
I)
Growth Calculations
Small differences in growth rates add up
Ex.
Australia vs. Japan
US vs. UK
1870
GDP/cap.
1999
GDP/cap.
Ratio
Avg. Annual
(1999 $)
(1999 $)
1999/1870
Growth
$4,77
We will bury you
3)
What if MPK varies with y?
Solow Model:
Same as Harrod-Domar except production function changes:
1)
Yt = AF(Kt,Nt)
Now labor and capital matter for how much is produced
Key Assumpt
Variables
National Level:
Yt
national income (GDP) at time t
Kt
national capital stock at time t [equipment]
A
total factor productivity [techniques]
A embodies knowledge, ideas, and methods of organi