Econ 501: Lab 9
Questions are based on Lecture 4.
Question 1: Suppose that the objective function of the central bank is to minimize
E(yt y)2
(1)
by either targeting interest rate or money supply where yt is the (log) actual output,
y is the (log) potenti
Lecture 3
Keynesian Models
In this lecture, we will analyze Keynesian models. To do this, we will rst develop
IS-LM and AD-AS models. These models are widely used to analyze macroeconomic
issues and policies. We will see that both models are equivalent. T
Lecture 1
Growth
There are vast dierences in the per-capita income and the standards of living across
countries. The average per-capita income of industrialized countries is about ten-times the
average per-capita income of poor countries. There are also c
Lecture 4
Conduct of Monetary Policy: Goals, Instruments, and Targets;
Asset Pricing; Time Inconsistency and Ination Bias
1. Introduction
In this chapter, we analyze the conduct of monetary policy (or the operating procedure) i.e. how is it operationalize
Lab 1: Solow Growth Model
Question 1: Consider the Cobb-Douglas production function in intensive form:
y f (k) = k ; (0, 1)
(1)
where y and k are output per worker and capital per worker respectively. Suppose
that the labor force growth rate is n and ther
Mid-Term Examination: Suggested Answer
Econ 501
21st October, 2011
Duration: 1 Hour
Total Marks 50
Question 1. Consider a Solow model with no technical progress. Suppose that savings
rate, s = 0.12, the depreciation rate is = 0.04 and the population growt
Mid-Term Examination I: Econ 501
Friday, 8th October, 2010
Duration: 1 Hour
Total Marks: 100
(1.) Solow Growth Model: Consider the Cobb-Douglas production function in the intensive
form:
y f (k) = k ; (0, 1)
where y and k are output per eective-labor and
Mid-Term Examination: Suggested Answer
Econ 501
18th October, 2013
Duration: 1 Hour
Total Marks 50
Question 1. Consider a Solow model with no technical progress. Let the production
function be
Y = F (K, L)
where K and L are capital stock and labor force r
Lab 7
Question 1. Example 7, Lecture 2. Suppose that lenders and borrowers have logarithmic utility function: ln c1,i + ln c2,i for i = b, l. Derive equilibrium allocations and
prices.
Suggested Answer: You can solve it in two ways: (i) solve the lender a
Econ 501: Lab 10
Questions are based on material covered in Lecture 4.
Question 1: Serially Correlated Shocks to LM Curve: Modify the model given in
question 1 in lab 9 as follows. Let y = 0. Suppose that shocks to LM curve follows a
rst order auto-regres
Lab 5: Dynamic Models
(1.) Suppose that the representative consumer has endowment of y units good in the rst
period and 1 unit of time in the second period. Suppose that the second period
production function is k n1 , where k is the investment made in the
Lecture 2
Dynamic Equilibrium Models : Finite Periods
1. Introduction
In macroeconomics, we study the behavior of economy-wide aggregates e.g. GDP,
savings, investment, employment and so on - and their interrelations. The behavior of
aggregates and their