EC 813A PROBLEM SET 3 TO BE HANDED IN ON FRIDAY OCTOBER 17TH Exercise 1. Infinite horizon pure consumption economy (Difficulty: Easy/Average) Consider the household maximizing the utility of consumption from present to future under certainty:
t
t=0
EC 813A Problem Set 6: Money and Nominal Rigidities Please, prepare for the week 24-28th November 1. Dornbusch-Frenkel, 1973. Money as a factor of production.
Consider the Sidrauski model assuming that money services are also an input in production.
Algebraic Addendum to second part slide 36. The algebraic details are as follows: Take the expectation at t=1 of both right and left hand side of b.c. " T # " # T X X E1 Ct = E1 B0 + Yt
t=1 t=1
Since B0 is known at t=1, this can be rewritten as
T X
Page 9. Equation 4.11. Last term becomes %CHANGE C 1 C2 %CHANGE1 r Page 30. Equation 9.6. Last term becomes #
Yt B0
T Page 42. Equation 11.1. Eliminate dots . Equation 11.2. BC. is B s1 RB s Y s C s Page 44. Equation 12.2 becomes RB s Y s Y
EC813A. PROBLEM SET 5. PLEASE HAND IN FRIDAY OCTOBER 21ST. 1. (Durables and Money). Consider the following model. Assume that the household can hold its financial wealth in money or foreign bonds with gross interest rate R. The household derives util
Addendum to Slide 116
Below you find the explicit derivation of the right hand side of the last equation on slide 116 (the explicit solution for the constant consumption C). This derivation can also be obtained by combining the intertemporal b.c. as
Syllabus for EC 813A Macroeconomics I
Dr. Raoul Minetti. Office: Marshall Hall 25A. E-mail: minetti@msu.edu. Phone: 355-7349 Web Page: http:/www.msu.edu/~minetti/ (you can find all the course material) Office hours: Tu-Th 2.30-4.00 Teaching Assistant
EC 813A. Exercise 2. Please hand in on Friday September 26th.
1) (Non-Tradable Inputs). Consider a small open economy that lasts for two periods (t = 1, 2). The economy can trade bonds with the rest of the world at the interest rate r. The population
EC 813A MACROECONOMICS PROBLEM SET 4. PLEASE HAND IN ON FRIDAY OCTOBER 24TH
1) Financial market imperfections. Consider a two period small open, production economy (t = 1, 2). There are two goods: fruits and machines (denote K the stock of machines)