Macroeconomic Theory, Fall 2014
Instructor: Dr. Yulei Luo
SEF, HKU
October 2014
Suggested Solution to ECON6012: The Midterm Exam
1. [26 points] Suppose that a rm facing the market interest rate r has the following production function:
yt = at kt ;
where k
Econ6012: Macro Theory
Instructor: Dr. Yulei Luo
SEF, HKU
October 2014
Suggested Solutions to Problem Set 1
1. [10 points] Consider the following lifetime optimal consumption-saving problem:
T
X c1
1
t t
v (a0 ) = max
(1)
1
fct ;at+1 g
t=0
subject to
at+1
Problem set 3
Dynamic Macroeconomic Analysis
Marcel Jansen
1. Elasticity of Intertemporal Substitution Consider the consumption-savings problem
of an agent who has the following preferences over consumption in the two periods of his
life:
c1 1
c1 1
U (c1
ECON 6022B
Problem Set 1
Suggested Solutions
Fall 2011
September 15, 2011
1
Shocking the Solow Model
Consider the basic Solow model in Lecture 2. Suppose the economy stays at its steady state in Period 0 and
there is an one-time increase in the depreciati
MACROECONOMIC THEORY
Lecture Notes
Alexander W. Richter1
Department of Economics
Auburn University
January 2015
1
Correspondence: Department of Economics, Auburn University, Auburn, AL 36849, USA. Phone:
+1(334)844-8638. E-mail: arichter@auburn.edu.
Conte
ECON 202 MACROECONOMICS I
PROBLEM SET 1
DUE: TUESDAY, JUNE 26, 2012, IN CLASS
1. Nominal GDP vs. Real GDP
In this question we ask you to compute the GDP for a hypothetical economy that produces two goods
(computers and gasoline). The prices and quantities
Macroeconomics
Lecture 5: Optimal Growth Models
Richard G. Pierse
1
Introduction
The Solow-Swan model treats savings as a constant, exogenously given, proportion of income. Though we saw in Lecture 1 that, in that model there is a savings
rate s that maxi
Lecture Notes in Macroeconomics
John C. Driscoll
Brown University and NBER1
December 21, 2003
1
Department of Economics, Brown University, Box B, Providence RI 02912. Phone
(401) 863-1584, Fax (401) 863-1970, email:John Driscoll@brown.edu, web:http:\
econ
Teaching Intermediate Macroeconomics using the
3-Equation Model
Wendy Carlin and David Soskice
Much teaching of intermediate macroeconomics uses the IS-LM-AS or ADAS approach. This is far removed both from the practice of interest rate setting,
ination-ta
Econ6012: Macro Theory
Instructor: Dr. Yulei Luo
SEF, HKU
September 2013
Solution to Problem Set 1
1. [10 points] Consider the following lifetime optimal consumption-saving problem:
v (a0 ) = max
fct ;at+1 g
T
X
1
t ct
1
(1)
1
t=0
subject to
at+1 = R (at
Q1 a)
In order to increase a countrys GDP, firm tends to increase their production of
goods and services. Production brings to an economy undesirable effect,
including pollution. Factories and power plants will emit pollutants into
environment that negati
Macroeconomic Theory, Fall 2014
Instructor: Dr. Yulei Luo
SEF, HKU
October 2014
Suggested Solution to Problem Set 2
1. [10 points] Consider the following Ramsey-Cass-Koopmans model with scal
policy. First, we assume that the private sector (households-rms
Macro Theory, Fall 2014
Instructor: Dr. Yulei Luo
SEF, HKU
November 2014
Suggested Solutions to Problem Set 4
1. [9 points] In equilibrium, the fundamental equation of the consumption-based
CAPM is:
u1 (ys )ps = Es [u1 (ys+1 ) (ys+1 + ps+1 )] ;
(1)
where
Macroeconomic Theory, Fall 2014
Instructor: Dr. Yulei Luo
SEF, HKU
November 2014
Suggested Solution to Problem Set 3
1. [30 points] Consider the following baseline version of the stochastic growth
model without leisure:
#
"1
X
t
(1)
max E
ln Ct ;
fCt ;Kt+