Homework #10
Economics 411
Fall, 2011, Due Thursday, December 2.
Christiano
1. Consider the `Moral Hazard I' model in the manuscript, `Government
Policy, Credit Markets and Economic Activity'. Consider the following
parameter values:
N = 1; y = 5;
= 1:1;
Homework #9
Economics 411
Due Wednesday, November 23
Christiano
1. (Financial friction theory of Solow residual). Consider an economy
in which a nal good is produced using the following Dixit-Stiglitz
aggregator:
y=
Z
1
0
1
yi di
; 0<
< 1:
A representativ
Homework #8
Economics 411, fall 2011
Due Wednesday, November 16
Christiano
1. Consider the Christiano-Harrison model analyzed in the previous homework. You established a characterization result for that economy. Now,
we consider a stochastic version that
Homework #7
Economics 411, fall 2011
Due Wednesday, November 9
Christiano
1. (Dynamic Ine ciency in OG Models). Consider the overlapping generations model in which the utility of the generation born at t is
u(ct ; ct+1 ) = log(ct ) +
tt
t
log(ct+1 ):
t
Th
Homework #6
Economics 411
Due Wednesday, November 2
Christiano
1. Consider a two-sector economy with the following preferences:
1
X
t
u (ct ; lt ) ;
t=0
where
u (c; l) =
(
[c(1 l) ]1
1
; 6= 1; > 0
:
log c + log (1 l) ; = 1
Consumption goods are produced u
Homework #5
Economics 411, Fall 2011
Due Wednesday, October 26.
Christiano
1. Consider the neoclassical growth model in the second question of homework 4, in which 6= : Consider two alternative de nitions of a sequence of markets equilibrium. De nition 1
Homework #3
Economics 411-1
Due Wednesday, October 12
Christiano
1. Consider the version of the neoclassical growth model in which preferences have the following form:
1
X
t
u (ct
c) ;
t=0
where c > 0 and ct denotes consumption. The resource constraint is
Homework #2
Economics 411-1
Due Wednesday, October 5
Christiano
1. This question is designed to illustrate Blackwell's Theorem, Theorem
3.3 on page 54 of S-L. That theorem represents a set of conditions that
are su cient for a mapping, T; to be a contract
Economics 411
Christiano
(Revised)
Financial Frictions Under Asymmetric Information and Moral Hazard
In the past two decades several economies have experienced a `Sudden Stop':
over a brief period of time, output collapsed and the current account shifted