Problem Set 1 (Growth Models)
Part 1 of 3: Solow-Swan
ECON 6002, Semester 2 2015 (Lect: Dr. Denny Lie)
Due date: Thurs, 3 September, 6pm
Problem 1
Consider the Solow model with production function
Yt = F (Kt ; Lt ) = Kt (ALt )1
with A = 1 and = 0:3. Yt ,

Problem Set 1 (Growth Models)
Part 3 of 3: New Growth Theory
ECON 6002, Semester 2 2015 (Lect: Dr. Denny Lie)
Due date: Thurs, 3 September, 6pm
Problem
Consider the case in the lecture where
_
in the steady state is gA = L=L
= n and
= 1 and
= 0 so that th

Problem Set 1 (Growth Models)
Part 2 of 3: Cass-Ramsey
ECON 6002, Semester 2 2015 (Lect: Dr. Denny Lie)
Due date: Thurs, 3 September, 6pm
Problem 1
Consider the Cass-Ramsey model with the folowing dynamics:
c_t
rt
=
ct
k_ t = f (kt )
g
ct
(n + g)kt
As usu

Lecture 1: Concepts and Stylized Facts of
Economic Growth
ECON 6002
Denny Lie
Lecture Slides 1
Outline
Stylized Facts of Economic Growth
Important Mathematical Concepts (see also CJ, Appendix A)
Outline
Stylized Facts of Economic Growth
Important Mathemat

The Solow-Swan Model
ECON 6002, Sem 2 2015
Denny Lie
Lecture Slides 2
Suggested readings
I
CJ (Jones and Vollrath) 2
I
DR 1.21.7
2 / 48
Outline
Intro
The Model
Assumptions and Structure
Technological Progress
The Balanced Growth Path/Steady State
Transiti

Tutorial Questions (Solow Model)
Week 2-3
ECON 6002
Lect: Dr. Denny Lie
NOTE: The tutorial problems are covered by the online tutor. If you have any
questions about the tutorial questions that are covered by the tutor, please post the
questions (after you

Tutorial Questions and Solutions (Solow Model)
ECON 6002
Lect: Dr. Denny Lie
Problem 1 (Comparative dynamics)
Question:
1. Income tax: Examine the short-run and long-run eects of an income tax. Instead of
receiving wL + rK, households receive (1
)(wL + rK

Application of the Solow Model: Growth and
Level Accounting
ECON 6002
Denny Lie
Lecture Slides 3
The Solow-Swan Model: Applications
1
Readings:
1. CJ Chapter 2.4, 3
2. Mankiw, N. Gregory, David Romer, and David Weil (1992) A Contribution
to the Empirics o