Econ 502, Spring 2012
Franois Gourio
Homework 5 Answer Key
Instructor: Francois Gourio
Problem 1: Investment
Consider a rm that chooses capital to maximize the expected present discounted value of prots:
!
1
s
X
1
Vt = Et
( t+s ; Kt+s ) PtK s It+s C (It+s
Econ 502
Franois Gourio
Midterm - Spring 2011
Intructions: Budget your time carefully. The exam is 1h20mn and there are 80pts: 1pt = 1mn.
Any attempt to cheat will be severely punished I will give a failing grade for the course and report
the cheater to t
Econ 502
Franois Gourio
Midterm - Spring 2011
Intructions: Budget your time carefully. The exam is 1h20mn and there are 80pts: 1pt = 1mn.
Any attempt to cheat will be severely punished I will give a failing grade for the course and report
the cheater to t
EC 502, Spring 2012
Midterm sample
Short questions (answer in 5 lines no proof required but a graph or a couple of
equations may be useful)
(1) Explain how a rational consumer adjusts his consumption and savings after winning the lottery.
(State whatever
Econ 502, Spring 2012
Franois Gourio
Homework 1
ANSWER KEY
Problem 1: A technology shift in the Solow model
Consider the discrete-time Solow model:
kt+1 =
sf (kt ) + (1
)kt
;
(1 + n) (1 + g )
k0 given, with kt = Kt =(At Lt ):
p
(1) Suppose that f (k ) = A
Econ 502, Spring 2012
Francois Gourio
Homework 2
Due Friday, Feb 10rd in the TF session, or Thursday Feb 9nd in class
Cross-country variation in income per capita and convergence: Empirics
This problem requires you to analyze real data using econometric t
CAS EC 502 A1: Macroeconomics
Spring 2012
Instructor
Francois Gourio, assistant professor of economics.
O ce: room 400, 264/270 Bay State Road.
O ce hours: Mon 3-5, Fri 2-3.
Email: fgourio@bu.edu.
Logistics
Lectures: Tu-Th 11-12:30, room GCB 209.
Review s
Econ 502, Spring 2012
Francois Gourio
Homework 1
Due Friday, Feb 3rd in the TF session, or Thursday Feb 2nd in class
Problem 1: A shift in the production function in the Solow model
Consider the discrete-time Solow model:
kt+1 =
sf (kt ) + (1
)kt
;
(1 + n
Econ 502, Spring 2012
Franois Gourio
Homework 6 - Answer Key
Instructor: Francois Gourio
Problem 1: Simple General Equilibrium Model: a shock to demand
Consider the two period model we solved in class, with xed labor supply and government spending,
C1 + G
Econ 502, Spring 2012
Franois Gourio
Homework 7 - Answer Key
Instructor: Francois Gourio
Problem 1 Monetary and Fiscal Policy
Consider an economy where output is growing at 2% per year, i.e.
Yt+1
= 1:02;
Yt
and the real interest rate is 4%. The current pu
Econ 502, Spring 2012
Franois Gourio
Homework 7
Due in class, Thursday, April 26th
Instructor: Francois Gourio
Problem 1 Monetary and Fiscal Policy
Consider an economy where output is growing at 2% per year, i.e.
Yt+1
= 1:02;
Yt
and the real interest rate
Econ 502, Spring 2012
Franois Gourio
Homework 6
Due Thursday, April 12
Instructor: Francois Gourio
Problem 1: Simple General Equilibrium Model: a shock to demand
Consider the two period model we solved in class, with xed labor supply and government spendi
Econ 502, Spring 2012
Francois Gourio
Homework 5
Due Friday, March 30th in the TF session, or Thursday March 29th in class
Instructor: Francois Gourio
Problem 1: Investment
Consider a rm that chooses capital to maximize the expected present discounted val
Econ 502, Spring 2012
Franois Gourio
c
Homework 3 Answer Key
Problem 1: Distribution of Income Dynamics in the Solow Model
Consider the Solow model, with the following modication. There are two types of people, workers
and capitalists. There are Lt worker
Econ 502, Spring 2012
Francois Gourio
Homework 3
Due Friday, Feb 17rd in the TF session, or Thursday Feb 18nd in class
Problem 1: Distribution of Income Dynamics in the Solow Model
Consider the Solow model, with the following modi cation. There are two ty
Econ 502, Spring 2012
Francois Gourio
Homework 4
Due Thursday, March 3rd in the TF session, or Thursday March 2nd in class
Consumption Smoothing: Empirical Tests
Like Homework 2, this problem requires you to analyze real data using econometric tools. Agai
Econ 502, Spring 2012
Francois Gourio
Homework 5
Due Friday, March 30th in the TF session, or Thursday March 29th in class
Instructor: Francois Gourio
Problem 1: Investment
Consider a rm that chooses capital to maximize the expected present discounted val
Econ 502, Spring 2012
Franois Gourio
Homework 4 Answer key
Consumption Smoothing: Empirical Tests
Note: I posted on blackboard a Stata do-le that does all the computations of this problem set.
Question 1
(b) Provide a set of summary statistics including m
Ec 502: Financial crisis
Franois Gourio
Boston University
2012
Franois Gourio (BU)
Ec 502
2012
1 / 43
2007-2009 Financial crisis I
1
Housing boom in the 2000s
Prices and construction rose
2
House prices fall starting in 2006
subprime borrowers start defau
MONETARY AND ECONOMIC STUDIES /MAY 2000
A Theoretical Analysis of Narrow Banking Proposals
A Theoretical Analysis
of Narrow Banking
Proposals
Shuji Kobayakawa and Hisashi Nakamura
The purpose of this paper is to examine narrow banking proposals.
First, we
Ec 502: notes on a monetary model with sticky prices
Franois Gourio
1
Motivation and Introduction
In the model of monetary policy with
exible prices, we saw that monetary policy aects the
nominal interest rate and in
ation, but has no eect on real output
Economic QuarterlyVolume 96, Number 1First Quarter 2010Pages 83122
Monetary Theory and
Electronic Money:
Reections on the Kenyan
Experience
William Jack, Tavneet Suri, and Robert Townsend
I
n 2007, the leading cell phone company in Kenya, Safaricom Ltd.,
Ec 502: Notes on Consumption and Savings
Franois Gourio
1
Motivation
These notes focus on an important economic choice: how much to consume vs. save.
When we analyzed the Solow model, we assumed that people saved a constant share s of their
income.
But, t
Lectures on Growth Overview
Franois Gourio
2012
Franois Gourio ()
Lectures on Growth Overview
2012
1/3
Key facts we introduced at the beginning of class
Fact 1: positive, stable growth of 2% per capita in US and developed
countries, since around 1800 (ind
Econ 502, Spring 2012
Franois Gourio
c
Homework 2
ANSWER KEY
Question 1 Summarize your data: to summarize data, we often compute summary statistics and
plot key relationships of interest to the researcher. The summary statistics and scatter plot provide a