PROBLEM SET 2
ECON 202 - MACROECONOMICS I
SPRING 2010
UNIVERSITY OF CHICAGO
INSTRUCTOR: RAFAEL LOPES DE MELO
TAS: RUI MANO AND LEONARDO DAVID ESPINOSA ROLDN
This problem set is due Monday, April 12, in class.
You will need Excel for Question 1.
1.
Robinso
Econ 202/05: Problem Set 1 Solutions
Lloyd Han
March 27, 2015
1. (a) In this economy, nominal GDP at time t is given by:
C
C
Nominal GDPt = PtG QG
t + Pt Qt
(b) Real GDP at time t using 2010 as the base year is given by:
G
C
C
Real GDPt = P2010
QG
t + P2
PROBLEM SET 3
ECON 202 - MACROECONOMICS I
SPRING 2010
UNIVERSITY OF CHICAGO
INSTRUCTOR: RAFAEL LOPES DE MELO
TAS: RUI MANO AND LEONARDO DAVID ESPINOSA ROLDN
This problem set is due Thursday, April 22, at your TA section.
1.
Capitalists and the Proletariat
4/14/2010
Post-Scarcity Prophet - Reason Magazi
http:/reason.com/archives/2001/12/01/post-scarcity-prophet
Post-Scarcity Prophet
Economist Paul Romer on growth, technological change, and an
unlimited human future.
Ronald Bailey from the December 2001 issu
Macroeconomics I - Econ 202
Part 3c - The Neoclassical Growth Model (cont.)
Rafael Lopes de Melo
University of Chicago
Spring 2013
(University of Chicago)
1 / 41
Modern Growth
(University of Chicago)
2 / 41
The Neoclassical Growth Model
Last class we saw
Macroeconomics I - Econ 202
Part 5a - Money and Ination
Rafael Lopes de Melo
University of Chicago
Spring 2014
(University of Chicago)
1 / 36
Money and Ination
So far we have studied "real" economies.
Aggregate prices had no real implications.
However, in
Macroeconomics I - Econ 202
Part 3d - Endogenous Growth
Rafael Lopes de Melo
University of Chicago
Spring 2014
(University of Chicago)
1 / 24
Endogenous Growth
Human Capital
I will introduce the SIMPLEST endogenous growth model.
This is inspired in the wo
Macroeconomics I - Econ 202
Part 4b - A Simple Business Cycle Model
Rafael Lopes de Melo
University of Chicago
Spring 2014
(University of Chicago)
1 / 32
A Real Business Cycle Model
I introduce next a simple business cycle model.
The source of cycles in t
Macroeconomics I - Econ 202
Part 3c - The Neoclassical Growth Model
Rafael Lopes de Melo
University of Chicago
Spring 2013
(University of Chicago)
1 / 29
Modern Growth
(University of Chicago)
2 / 29
Modern Growth
Today we study the NEOCLASSICAL growth mod
Macroeconomics I - Econ 202
Part 3b - The Classical Model
Rafael Lopes de Melo
University of Chicago
Spring 2014
(University of Chicago)
1 / 37
Growth in History
(University of Chicago)
2 / 37
Growth in History
(University of Chicago)
3 / 37
Growth in His
Macroeconomics I - Econ 202
Part 2c - Intertemporal Consumption
Rafael Lopes de Melo
University of Chicago
Spring 2014
(University of Chicago)
1 / 26
General Equilibrium
Last class we saw a basic general equilibrium model:
one period.
N
workers, who chose
Macroeconomics I - Econ 202
Part 2d - More on Intertemporal Consumption
Rafael Lopes de Melo
University of Chicago
Spring 2014
(University of Chicago)
1 / 27
Intertemporal Consumption
Last class:
Basic intertemporal consumption problem in two periods.
One
Macroeconomics I - Econ 202
Part 1 - Introduction
Rafael Lopes de Melo
University of Chicago
Spring 2014
(University of Chicago)
Part 1 - Intro
Econ 202 - Spring 2014
1 / 23
What is Macroeconomics?
The discipline that studies the aggregate (market) econom
Macroeconomics I - Econ 202
Part 2a- Consumption and Leisure
Rafael Lopes de Melo
University of Chicago
Spring 2014
(University of Chicago)
Part 2a - Consumption and Leisure
Econ 202 - Spring 2014
1 / 18
Consumption
Last class we dened GDP and looked at t
MACROECONOMICS I - ECON 202
PART 2C AND D - MARKET CLEARING IN A MULTI-PERIODS CREDIT
ECONOMY
This note is to clarify how market clearing and Walras law work in a multi-periods economy
with credit.
1. WALRA S L AW
Read Section 5.1-5.3 of DLS.
Take the one
Macroeconomics I - Econ 202
Part 2b - A Market Economy
Rafael Lopes de Melo
University of Chicago
Spring 2014
(University of Chicago)
Part 2b - A Market Economy
Econ 202 - Spring 2014
1 / 24
A Market Economy
In the previous Section we studied an economy t
Text
It
Ct
= sYt
= (
Var I t = Var Y t = Var C t
s) Yt
Nt =
t
xt+s
s
x
t
u ctt , ct+
c
t
t
= ln ctt + ln ct+
t +s
ctt + st = wt
t
ct+ = (
+ rt+ ) st
ctt +
(
t
ct+
= wt
+ rt+ )
Y t = A t L Kt
t
MaxL,K
Y
= At L K
wt L
rt K
Lt =
K t = st
ctt
+ ctt + st = At
PROBLEM SET 6
ECON 202 - MACROECONOMICS I
SPRING 2010
UNIVERSITY OF CHICAGO
INSTRUCTOR: RAFAEL LOPES DE MELO
TAS: RUI MANO AND LEONARDO DAVID ESPINOSA ROLDN
This problem set is due Monday, May 24, in class.
1.
Understanding European Unemployment (40 Point
PROBLEM SET 5
ECON 202 - MACROECONOMICS I
SPRING 2010
UNIVERSITY OF CHICAGO
INSTRUCTOR: RAFAEL LOPES DE MELO
TAS: RUI MANO AND LEONARDO DAVID ESPINOSA ROLDN
This problem set is due Monday, May 17, in class.
1
You will need Excel for Questions 1 and 2.
1.
National Accounting
TA Session 1
January 11, 2014
Structure
Three approaches to measuring GDP
From nominal to real GDP and price level measures
Some more exercises
Three approaches to measuring GDP
Motivation: Exchanges in the economy
Source: BEA.com
Thre
Application
Decentralized Economy
TA Session 3
January 26, 2014
Structure
1
Denition of a competitive equilibrium
2
Solving for the competitive equilibrium
Denition of competitive equilibrium
Recall: Centralized solution of Corn problem
In the centralized
2. Focus on the treasury constant maturity rates DGS10 (10-Year Treasury Constant Maturity Rate,
Percent, Quarterly) and DGS5 (5-Year Treasury Constant Maturity Rate, Percent, Quarterly). Their
plot is below. What do these two series measure?
3. The plot
5
Land Reclamation in the Malthusian Model
Lecture References and Goal You use the Malthusian model to analyze the eects of land reclamation
both in the short and in the long run. See Lecture 14.
Land reclamation is the process by which people bring unuse
3
The Price Misperceptions Model
Lecture References and Goal Our economic models have stressed real factors, such as shifts in technology, as sources of business fluctuations. Some economists believe that monetary shocks - created
by the monetary authorit
2
Inflation in a General Equilibrium Model
Lecture References and Goal You consider an equilibrium model for the macroeconomy in which production uses labor and the CB engages in lump sum transfers of banknotes to the individuals populating
the economy. Y
4
A Variant of the CIA Model with a Cash and a Credit Good
Lecture References and Goal You practice with a variant of the CIA model See Lecture 13.
The RI has preferences represented by lifetime utility
U=
1
X
t=0
t [u (c1t ) + (1 ) u (c2t ) + v (lt )] ,
ECON 202: Exercises in Preparation to the Final Exam
Melissa Tartari
1
Expected versus Actual Inflation
Lecture References and Goal When inflation is zero we do not have to distinguish between the nominal
and real interest rate. Here you first clarify thi
(a) What eventually happens to the labor supply curve?
(b) Is money neutral in the long run in the price misperceptions model?
5. Suppose that there are distortions in the economy, such as those from taxation and welfare programs,
that can lead to labor a
(b) Commodity demand and supply are functions of r. Sign their dependence on r by replacing "?"
with + or - in (9) where we use "." in place of the other determinants e.g. f (.):
!+ "
! "
yt r; . and ct r ; . .
(9)
(c) Argue that commodity market clearing
(a) What is the value of these real assets next year?
(b) By how much can the household raise consumption next year?
(c) What would make the household defer consumption from today to next year? Explain.
(d) What would make the household defer leisure from