International Macroeconomics
Master in International Economic Policy
International financial crises
Nicolas Coeurdacier
Lectures 11-12
[email protected]
Motivation
Recent developments have shown that developed
countries are also affected

Graduate Macroeconomics 1 Tutorial 1
Problem set 1. - Solutions
Question 1, 1.7 in BSM
a. The production function Y = F (K, L) = AK + BL is not neoclassical.
1. Positive and diminishing marginal products with respect to each input:
Y
=
K
Y
=
L
2Y
=0
K 2
2

EPP - Macroeconomics 1
Lecture 7 - Labor markets: Introduction & the search model
Zs
ofia L. Barany
Sciences Po
2014 November
The neoclassical model of the labor market
central question for macro and labor: what determines the level of
employment and unem

Sciences Po Graduate Macroeconomics 1
Problem set 2 additional exercise
Consider a two-period discrete time model of consumption-saving choice. In particular assume that the household lives for 2 periods (t = 0, 1), has labor income wt
in period t = 0, 1.

Sciences Po Graduate Macroeconomics 1
Problem set 3
Question 1 Social security in the Diamond model
Question 2.16 from the Romer book.
Consider a Diamond economy where g is zero, production is Cobb-Douglas, and
utility is logarithmic.
a. Pay-as-you-go soc

Sciences Po Graduate Macroeconomics 1
Problem set 3 Solutions
Question 1 Social security in the Diamond model
Question 2.16 from the Romer book.
a. Pay-as-you-go social security.
i. The social security changes the life-cycle problem of the individual only

Sciences Po Graduate Macroeconomics 1
Problem set 2
Question 1 the transversality condition
Consider the following problem:
max
cfw_ct t=0
X
t ln ct
t=0
subject to:
P
t=0 ct
k0
ct 0 for t 0
k0 is given
Use the Lagrangian method to derive the optimal con

Graduate Macroeconomics 1 Tutorial 2
Problem set 2. - Solutions
Question 1 the transversality condition
1. The Lagrangian of the problem is as follows:
X
L=
t ln ct (
t=0
X
ct k0 )
t=0
Notice that there is only one lifetime feasibility constraint, with m

Sciences Po Graduate Macroeconomics 1
Problem set 4
Question 1 Scale effects
Question 6.6 from the Barro and Sala-i-Martin book.
a. Why does the varieties model of technological change from section 6.1 exhibit a scale effect in the sense that the growth r

Sciences Po Graduate Macroeconomics 1
Problem set 4 solutions
Question 1 Scale effects
Question 6.6 from the Barro and Sala-i-Martin book.
a. From equation (6.24) in the book, the growth rate of the economy is given by
1
=
1
2
L
1
1
1
A
.
(1)
It is str

Sciences Po Graduate Macroeconomics 1
Problem set 5
Question 1
Show that in the competitive demand and supply framework seen in the lecture
any technological improvement increases average wages!
Question 2
How would you introduce technologies that directl

Sciences Po Graduate Macroeconomics 1
Problem set 5 solutions
Question 1
Since any technological improvement increases wages for both the low- and the
high-skilled workers, it necessarily increases the average wages.
Question 2
1
Y (t) = [(Al (t)L(t) + Bl

Sciences Po Graduate Macroeconomics 1
Problem set 6
Question 1
Suppose the wage distribution is Pareto
F (w) = 1
w
, > 0
Note that w and assume > 1, which ensures that there is a well-defined
mean.
1. Derive the mean of the distribution and the conditi

Graduate Macroeconomics 2
Problem set 7. - Solutions
Question 1
1. See Lecture 8 for the derivation of the equilibrium of the search and matching
model with exogenous job destruction. The equilibrium market tightness
and w jointly satisfy the job creatio

Sciences Po Graduate Macroeconomics 1
Problem set 6 solutions
Question 1
Pareto Distribution:
F (w) = 1
> 0, > 1.
w
with the following properties
F 0 (w) = w1 =
[1 F (w)]
w
1. The mean:
Z
E (w) =
wdF (w) =
Z
w
dw =
w1
1
=
.
1
The conditional mean:
Z

Graduate Macroeconomics 2
Problem set 7.
Question 1 Cyclical change in the matching model
To a very good approximation, the implications of cyclical change in the matching
model can be studied by evaluating the response of the steady state unemployment
ra

Sciences Po Graduate Macroeconomics 1
Problem set 1
Question 1 The AK model
Question 1.7 in the Barro and Sala-i-Martin book
Consider the production function Y = AK + BL, where A and B are positive
constants.
a. Is this production function neoclassical? W

EPP - Macroeconomics 1
Lecture 8 - Labor markets: The search and matching model
Zs
ofia L. Barany
Sciences Po
2014 November
Last week
I
an overview of some labor market facts
I
a brief reminder of dynamic programming
we covered the search model
I
I
I
I
I

EPP - Macroeconomics 1
Lecture 5 - Long-run inequality
Zs
ofia L. Barany
Sciences Po
2014 October
Up to now
I
studied 4 growth models
I
I
I
I
I
Solow
NGM
OLG
endogenous growth varieties model
models that replicate the Kaldor facts
1.
2.
3.
4.
5.
the growt

Global Finance:
Past and
Present
D
ESPITE occasional manifestations of disappointment and distrust, the globalization of economic
life is now almost taken for granted. Nowhere has
this trend been more pervasive than in global
financial markets in the past

IMF
STAFF
POSITION
NOTE
February 19, 2010
SPN/10/04
Capital Inflows: The Role of Controls
Jonathan D. Ostry, Atish R. Ghosh, Karl Habermeier,
Marcos Chamon, Mahvash S. Qureshi, and Dennis B.S. Reinhardt
I N T E R N A T I O N A L
M O N E T A R Y
F U N D
IN

American Economic Association
The Drivers of Financial Globalization
Author(s): Philip R. Lane and Gian Maria Milesi-Ferretti
Source: The American Economic Review, Vol. 98, No. 2, Papers and Proceedings of the One
Hundred Twentieth Annual Meeting of the A