ECONOMICS 602: GRADUATE MACROECONOMICS
HOMEWORK ASSIGNMENT 1
SPRING 2016
CHAPTER 3: CAPITAL ACCUMULATION AND GROWTH
Exercise 1: The Basic Solow Model in Continuous Time
This exercise asks you to analyze the Solow model in continuous time as given by the s
Figure 1: The Phillips Curve in the United Kingdom (Left: 18611913, Right: 19581957)
LECTURE NOTES 09
Chapter 18: Inflation, Unemployment and Aggregate Supply
[The Theory of Aggregate Supply]
Main Objective
Major Question: Why study Aggregate Supply?
Ans
LECTURE NOTES 07
Chapter 16: Consumption, Income and Wealth
[Life-Cycle Consumption Theory]
Main Objective
Major Question: Why study consumption?
Answer: Private consumption is by far the largest component of aggregate demand.
In year 2012, US GDP = $1
LECTURE NOTES 04
Chapter 6: Education and Growth
[The Solow Model with Human Capital]
Main Objective
Major Question: Whats wrong with the General Solow Growth Model in Chapter 5?
Answer: Using the model in Chapter 5, we got two systematic discrepancies
LECTURE NOTES 11
Chapter 20: Stabilization Policy
[The Theory of Optimal Monetary Policy]
Main Objective
Major Question: How to minimize business cycles?
Answer: Stabilization Policy
Next Question: Why should society be concerned about the variability
LECTURE NOTES 01
Chapter 2: Some Facts about Prosperity and Growth
1
Seven Stylized Facts
1. Some countries are rich and some are poor, the dierences are enormous, and it has pretty much stayed like that in
relative terms over the last 40 years. However,
LECTURE NOTES 03
Chapter 5: The General Solow Model: Technological Progress
Main Objective
Major Question: Whats wrong with the Basic Solow Growth Model?
Answer: The basic Solow model presented in Chapter 3 did not perform well empirically
In the basic S
LECTURE NOTES 12
Chapter 21: Stabilization Policy with Rational Expectations
[The Hypothesis of Policy Ineectiveness]
Main Objective
Major Question: How many kinds of expectation hypotheses in the macroeconomic literature?
1. Static (naive) expectations:
Figure 1: A Brief History of Economic Thought
LECTURE NOTES 08
Chapter 17: Monetary Policy and Aggregate Demand
[The Theory of Aggregate Demand]
Main Objective
Major Question: Why study Aggregate Demand?
Answer: Keynesian Economics: The study of governm
Figure 1: NBERs Definition of Business Cycles
LECTURE NOTES 10
Chapter 19: Explaining Business Cycles
[The Theory of Aggregate Equilibrium]
Main Objective
Major Question: What are business cycles?
Gregory Mankiw (Principles of Macroeconomics: Page 13): T
LECTURE NOTES 02
Chapter 3: The Basic Solow Model
Main Objective
Question: How can a country initiate a growth process that will lead it to a higher level of GDP and
consumption per person?
The basic Solow model predicts how the evolution and the long-run
LECTURE NOTES 05
Chapter 8: Endogenous Growth Theories (Part I)
[Productive Externalities and Endogenous Growth]
Main Objective
Major Question:
Answer:
What's wrong with the Solow's idea on economic growth?
Solow model has one major limitation:
By treat
Economics 602: Macroeconomics: Theory/Application
Handout for the Midterm Examination
[THEORIES OF ECONOMIC GROWTH]
Chapter
Chapter
Chapter
Chapter
Chapter
1
3.
5.
6.
8.
9.
Capital Accumulation and Growth: The Basic Solow Model
Technological Progress and
LECTURE NOTES 02
Chapter 3: The Basic Solow Model
Main Objective
Question: How can a country initiate a growth process that will lead it to a higher level of GDP and
consumption per person?
! The basic Solow model predicts how the evolution and the long-r
LECTURE NOTES 03
Chapter 5: The General Solow Model: Technological Progress
Main Objective
! Major Question: Whats wrong with the Basic Solow Growth Model?
Answer: The basic Solow model presented in Chapter 3 did not perform well empirically
" In the bas
7 Stylized Facts
(1) Some countries are rich and some are
poor, the differences are enormous, and
Lecture One
it has pretty much stayed like that in relative
terms over the last 40 years.
Some Facts about Prosperity and Growth
However, there is some tende
Economics 602: Macroeconomics: Theory/Application
Chapter
Chapter
Chapter
Chapter
Chapter
Chapter
1
16:
17:
18:
19:
20:
21:
Consumption Theory
The Theory of Aggregate Demand (IS-LM Model)
The Theory of Aggregate Supply (Phillip Curve)
The Theory of Aggreg
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ECONOMICS 602: GRADUATE MACROECONOMICS
HOMEWORK ASSIGNMENT 3
CHAPTER 16: CONSUMPTION, INCOME AND WEALTH
Exercise 1: Important Concepts and Results in the Theory of Private
Consumption
Explain the conflicting evidence on the relationship between the averag
ECONOMICS 602: GRADUATE MACROECONOMICS
HOMEWORK ASSIGNMENT 2
SPRING 2016
CHAPTER 5: TECHNOLOGICAL PROGRESS AND GROWTH
Exercise 1: The General Solow Model in Continuous Time
In continuos time the general Solow model consists of the seven equations:
1
Y
=
LECTURE NOTES 06
Chapter 9: Endogenous Growth Theories (Part II)
[Research and Development and Endogenous Growth]
Main Objective
Major Question: Whats wrong with the model with Productive Externality assumption in
Chapter 8 ?
Answer: The key assumption