Introduction to Macroeconomics
Pamela Labadie
Fall 2016
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
Economics 8305
George Washington University
Pamela Labadie
Fall 2016
Two-Period Model
1
Partial Equilibrium
Assumptions:
1. Households are price takers, treating r as exogenous.
2. The household can borrow and lend (save) at the same rate of interest.
3.
Utility and Production Functions
Econ 8305
Pamela Labadie
Fall 2016
1
Preliminary Concepts
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
set X.
2
Notes on Macroeconomic Theory
Steve Williamson
Dept. of Economics
Washington University in St. Louis
St. Louis, MO 63130
September 2006
Chapter 1
Simple Representative Agent
Models
This chapter deals with the simplest kind of macroeconomic model,
which ab