Introduction to Macroeconomics
Key Macroeconomic Questions
1. What determines long run growth?
2. What causes business cycles?
3. What is the impact of the global economy on domestic business cycles and economic growth?
4. What i
George Washington University
1. Households are price takers, treating r as exogenous.
2. The household can borrow and lend (save) at the same rate of interest.
Utility and Production Functions
1. A set X is convex is if (1 )x + x0 X whenever x X, x0 X and [0, 1].
More simply, a straight line between any two points in the set X is contained in the
Notes on Macroeconomic Theory
Dept. of Economics
Washington University in St. Louis
St. Louis, MO 63130
Simple Representative Agent
This chapter deals with the simplest kind of macroeconomic model,