LSE Economics Department
EC210 Macroeconomic Principles 2012/2013
Michaelmas Term
Rachel Ngai
S675, x7017
l.ngai@lse.ac.uk
Problem Set 7: Consumption
1. Household optimality conditions : Suppose that an agent has only current income y1
and is expecting to
LSE Economics Department
EC210 Macroeconomic Principles 2012/2013
Michaelmas Term
Rachel Ngai
S675, x7017
l.ngai@lse.ac.uk
Problem Set 6: to be handed to class teachers in week 8
1. Short question, Exam 2007 : Consider two countries that have experienced
Outline and Readings (Michaelmas Term)
Overview and Measurement (week 1)

Measures of GDP and discussion of other factors that are left out by GDP measures
Decomposition of GDP changes into growth and business cycles
Required reading: Williamson (chapter
LSE Economics Department
EC210 Macroeconomic Principles 2012/2013
Michaelmas Term
Rachel Ngai
32L.1.15, x7017
l.ngai@lse.ac.uk
Problem Set 10: to be handed to class teachers in week 2 LT
1. Short question, 2012 Exam : Some economists have found a negative
LSE Economics Department
EC210 Macroeconomic Principles 2012/2013
Michaelmas Term
Rachel Ngai
S675, x7017
l.ngai@lse.ac.uk
Problem Set 10: to be handed to class teachers in LT Week 2
As a test of how well you have understood the materials (after revision)
LSE Economics Department
EC210 Macroeconomic Principles 2012/2013
Michaelmas Term
Rachel Ngai
32L.1.15, x7017
l.ngai@lse.ac.uk
Problem Set 9: Unemployment
1. The eciency wage model :
(a) What is the conceptual dierence between unemployment accounted for b
LSE Economics Department
EC210 Macroeconomic Principles 2012/2013
Michaelmas Term
Rachel Ngai
S675, x7017
l.ngai@lse.ac.uk
Problem Set 9: Unemployment
1. The eciency wage model :
(a) What is the conceptual dierence between unemployment accounted for by th
LSE Economics Department
EC210 Macroeconomic Principles 2012/2013
Michaelmas Term
Rachel Ngai
S675, x7017
l.ngai@lse.ac.uk
Problem Set 8: Investment, Consumption and the Financial Crisis
1. A Nobel prizewinning economist, James Tobin (19182002) theorise
LSE Economics Department
EC210 Macroeconomic Principles 2012/2013
Michaelmas Term
Rachel Ngai
S675, x7017
l.ngai@lse.ac.uk
Problem Set 8: Investment, the Financial Crisis, and Population Ageing
1. Investment : A Nobel prizewinning economist, James Tobin
LSE Economics Department
EC210 Macroeconomic Principles 2012/2013
Michaelmas Term
Rachel Ngai
S675, x7017
l.ngai@lse.ac.uk
Problem Set 7: Consumption
1. Household optimality conditions. Suppose that an agent has only current income y1
and is expecting to
LSE Economics Department
EC210 Macroeconomic Principles 2012/2013
Michaelmas Term
Rachel Ngai
S675, x7017
l.ngai@lse.ac.uk
Problem Set 5: Endogenous Growth Models
1. Research & development model : Suppose that Apple Inc. decides to transfer all
its resear
Handout 13
Issues in the Labour
Market
Slide #1
Issues in Labor Market
Topics
Topics
Unemployment differences across OECD
Wage inequality
Sectoral shifts from manufacturing to
services
Rise in female employment rate
Slide #2
Unemployment
Differences a
Handout 12
Handout
Unemployment
Unemployment
Slide #1
Labour Market
Topics:
Topics:
Labour Market Measurement and patterns in
the OECD
Theories of Unemployment
The efficiency wage model
A search model of unemployment
Slide #2
Labor Market Measurement
Labo
Handout 11
Handout
Investment
Investment
Topics
Topics
Current versus expected profit
Marginal product of capital and user cost of
capital
Stock market and investment: Tobins q
Investment and Asymmetric Information
Slide #2
Investment
Three different
Handout 9
Handout
Consumption
Consumption
In the Solow model, we assume consumers
save a fixed fraction of income.
Here we analyze the optimal consumption
saving decision.
Its closely related to the optimal decision in
the oneperiod model: saving is
Handout 8
Endogenous Growth
Models
Slide #1
Endogenous Growth Models
Topics
Topics
Endogenous Growth Learning by doing
Endogenous Growth Human capital
Endogenous Growth research and
development
International technology transfer
Slide #2
Learning by Do
Handout 7
Beyond the Solow Model
Slide #1
Beyond the Solow Model
Topics:
Topics:
Why doesnt capital move from rich to poor
countries?
Growth Accounting
Development Accounting
Why is there technological progress?
The AK model
Slide #2
Beyond the Solow
Handout 6
The Solow Model
Slide #1
The Basic Solow Model
Topics
Topics
The basic Solow model
The
dynamics of capital accumulation
Effects
of changes in the saving rate,
population growth rate and total factor
productivity.
The Solow model with technol
Handout 5
The Malthusian
Model
Slide #1
Notation
In most of the discussions, we do not distinguish
between the size of population and the size of labor
force, i.e. total population is equal to the number of
workers.
Upper case variables stand for aggregat
Handout 4
Growth Facts
Slide #1
The Facts of Growth
Topics:
Topics:
Measuring Growth
Why growth matters
Growth Facts
Convergence
Slide #2
The Facts of Growth
Hall and Jones 1999, QJE "In 1988 output
per worker in the United States was more
than 35 ti
Handout 2
Handout
Measurement
Measurement
Topics
Topics
Measuring GDP
Price indices comparing real GDP
across time and countries
Slide #2
Measuring GDP
Three approaches:
1. the product approach;
2. the expenditure approach;
3. the income approach.
Slide #
Handout 1
Handout
Overview
Overview
Topics
Topics
Macroeconomic models.
Economic growth and business cycles.
Slide #2
Overview
Macroeconomics is the study of the
economy as a whole
Models built to explain
macroeconomic phenomena.
Important phenomena are l