Problem Set 2 - ECON 203: Elements of Economic
Analysis IV, Spring 2014
Sketch Solutions
April 21, 2014
1
Income Inequality
1. Households maximize the following optimization problem:
(wi ) (1 )1i ,
i
max
for i = cfw_a, b. The solutions are:
c = wi i
i
i =
Theory of MoneyMoney in the Utility (MIU)
November 18, 2013
Introduction
MIU models assumes that households receive broader benets
of holding money.
Started by Sidrauski (1967)
The representative households utility function is
U(Ct , Lt , Mt ) where
UC >
ECON 203: Macroeconomics II
Problem Set 3
(Due: April 25, Thursday, in TA session.)
1
A Mini Survey of The Main Results
Are the following statements true or false? Briey explain your reasoning, based on the models
we discussed in class.
1. Suppose the gov
Econ 204: Problem Set 4 Suggested Solution
Daniel XIE
5/16/2013
(120 points)
1
A Stochastic Money Demand Model: Perfect Foresight (25 points)
1. (5 points) pt+1 pt = ln(1 + t) t by Taylor expansion. Then money demand equation becomes
md pt = Et [t ]
t
so
Problem Set 3 - ECON 203: Elements of Economic
Analysis IV, Spring 2014
Sketch Solutions
April 27, 2014
1
Optimal Taxation in an Overlapping Generation Model
1. Young's budget constraint is: ct + st y(1 ).
t
t
2. Old's budget constraint is: ct1 (1 + n) y
ECON 203: Macroeconomics II
Problem Set 2
(Due: April 18, Thursday, in TA session)
1
Taxation and Redistribution
In an economy, there are two types of agents: type A and type B. The agents are indexed by i
and have a common utility function over consumpti
Econ 204: Problem Set 5 Suggested Solution
Daniel XIE
5/30/2013
1
Short Questions (25 Points)
1.
(8 points) Monetary base consists of currency in circulation plus reserves held by banks. Money supply
consists of currency and deposits, which can be readily
ECON 203: Macroeconomics II
Problem Set 4
(Due: At the Beginning of Lecture, November 9, Monday)
1
MIU Model
We are going to introduce money in the model we studied for pset 2. Suppose that the representative household is innitely-lived and cares about th
Problem Set 4 - Solutions
Elements of Economic Analysis IV - Econ 203
Fall 2015
November 12, 2015
1
MIU Model
1.1
Householdss problem
1
L (cfw_Ct , Lt , Kt+1 , Bt+1 , Mt+1 , mt+1 t=0 )
+
1
X
t
t
t=0
=
1
X
t
t
t=0
1.2
t
t=0
k
Pt wt Lt + rt Kt + (1 + Rt )Bt
Econ 203: Problem Set 3 Suggested Solution
Daniel Xie
(180pts in total)
4/25/2013
1
1.1
A Mini Survey of The Main Results (4pts*8=32pts )
Suppose the government nances its spending solely by lump-sum taxes. Since this
will take away some resources from th
ECON203 Spring 2013
Problem Set2 Solutions
Daniel Xie
April 18, 2013
1
Taxation and Redistribution (Total =20)
1.1 The budget constraint (Total =4)
faced by agent A is
CA
(1
)wA LA :
And for B,
CB
1.2
wB LB + F
Setup the maximization problem for A. (Total
This PDF is a selection from an out-of-print volume from the National
Bureau of Economic Research
Volume Title: Inflation: Causes and Effects
Volume Author/Editor: Robert E. Hall
Volume Publisher: University of Chicago Press
Volume ISBN: 0-226-31323-9
Vol
ECON 203: Macroeconomics II
Problem Set 4
(Due: At the Beginning of Discussion Section, November 10, Thursday)
1
MIU Model
We are going to introduce money in the model we studied for pset 2. Suppose that the representative household is infinitely-lived an
Federal Reserve Bank of Minneapolis
Quarterly Review
Fall 1981
Some Unpleasant Monetarist Arithmetic
District Conditions
Thomas J. Sargent
Neil Wallace (p. l)
(p.18)
Federal ReseNe Bank of Minneapolis
Quarterly Review
vo1.
s. No
3
This publicaiion primari
WHAT DO WE KNOW ABOUT THE EFFECTS OF FISCAL POLICY?
SEPARATING EVIDENCE FROM IDEOLOGY
Christina D. Romer
Hamilton College
November 7, 2011
I. INTRODUCTION
Tonight I want to talk about fiscal policythose decisions the government makes
about spending and ta
1 MODEL ENVIRONMENT
1
Ramsey Optimal Taxation in an Innite Horizon Model:
1
Model Environment
Consider an economy that has three sectors: innitely many idential households, ininitely many rms, and government.
The representative household owns capital an
ChristinaD. Romerand David H. Romer
BERKELEY
UNIVERSITY CALIFORNIA,
OF
Does
Test
Monetary
in the
Spirit
Matter?
Policy
of Friedman
A
New
and
Schwartz
1. Introduction
This paper investigates whether nominal disturbanceshave important
real effects. What dif
11/17/2014
Speech: Credibility and Commitment (March 6, 2007) - Philadelphia Fed.
Speeches
Credibility and Commitment
Presented by Charles I. Plosser, President and Chief Executive Officer
Federal Reserve Bank of Philadelphia
New York Association for Busi
NBER WORKING PAPER SERIES
OPTIMAL TAXATION IN THEORY AND PRACTICE
N. Gregory Mankiw
Matthew Weinzierl
Danny Yagan
Working Paper 15071
http:/www.nber.org/papers/w15071
NATIONAL BUREAU OF ECONOMIC RESEARCH
1050 Massachusetts Avenue
Cambridge, MA 02138
June
ECON 203: Macroeconomics II
Problem Set 2
(Due: October 13, Thursday at the beginning of discussion section)
1
True, False or Uncertain?
Your answers are evaluated on clarity of your argument. Make your assumptions explicit and
defend your answer virorous
Nobel Lecture: Monetary Neutrality
Author(s): Robert E. Lucas, Jr.
Reviewed work(s):
Source: Journal of Political Economy, Vol. 104, No. 4 (Aug., 1996), pp. 661-682
Published by: The University of Chicago Press
Stable URL: http:/www.jstor.org/stable/21388
Federal Reserve Bank of Minneapolis
Quarterly Review
Some Unpleasant
Monetarist Arithmetic Thomas
Sargent, ,
^
Neil Wallace (p. 1)
District Conditions
(p.18)
Federal Reserve Bank of Minneapolis
Quarterly Review vol. 5, no 3
This publication primarily pres
ECON 203: Macroeconomics II
Problem Set 1
(Due: Monday, October 5, at the beginning of lecture.)
1
Two ways to model government spending
Consider an economy populated by many identical infinitely-lived households and many identical
firms. The per period-u
ECON 203: Macroeconomics II
Problem Set 3 - Suggested Solutions
1
A Mini Survey of The Main Results
1 False. The lump-sum taxes reduce households resources, so the consumption decreases. However, the
investment is not affected in the steady state. Since i
Econ 203, Midterm, Spring 2014
Name:
Instructions:
This midterm consists of three problems (T/F and two long questions) and a total
of 100 points.
No books, notes or calculators are allowed.
You have 1 hour and 20 minutes to complete this exam.
Show i
Summary of Fiscal Policy So Far:
1
Intro to Fiscal Policy (No Government Debt)
Innite Horizon, lump-sum Taxes, no labor.
No distortion. Only wealth eect.
Innite Horizon, proportional income taxes, no labor.
Steady state capital depends on .
Innite Ho
International Trade
December 2, 2013
Summary of Lecture
Gains of TradeComparative Advantage
Purchasing Power Parity
Interest Rate Parity
Motivation
Borders are more open now than they have ever been before.
1st Globalization: pre-WWI increase in trade; en
Taylor Rule
Inflation Targeting
First adopted first in New Zealand in 1990,
followed by Canada in 1991, the United
Kindgom in 1992, Sweden and Finland in
1993, and Australia and Spain in 1994.
Israel, Chle, and Brazil, among others
have also adopted a for