Macro 1 - Tepper School of Business

Lectures
  • Lecture Notes [PDF]: Updated Thursday 12/6/2018 at 10:48 PM
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  • Lecture 1 (Slides: [PDF]):
    • Started by discussing basic stylized facts in macro; developed the two sector G.E. model
    • If you want to read more on growth facts and observations, this is a very nice paper by Chad Jones and Paul Romer - The New Kaldor Facts: Ideas, Institutions, Population, and Human Capital - [PDF]
  • ​Lecture 2:
    • ​Further developed the two sector model. Proved first welfare theorem and discussed aggregation
  • ​Lecture 3:
    • ​Talked about aggregation and long-run behavior in the standard growth model. Started talking what causes lack of growth and fixed factors as well as population growth
  • ​Lecture 4:
    • ​Examined the long-run properties of the model in presence of population and productivity growth; started thinking about endogenous growth
    • See the paper by Houthakker on how aggregation of a continuum of Leontief production functions can lead to Cobb-Douglass in the aggregate (With the heavy use of Pareto distributions)
  • ​Lecture 5:
    • ​Showed how endogenous growth can be generated by AK and AKH models and discussed their various properties
    • Worked on the one-sector growth model in continuous time to see how to solve the model in continuous time
    • Started thinking about increasing returns to scale
  • ​Lecture 6:
    • Worked out Romer (1986)'s model of growth with increasing returns and externalities
    • Described how the equilibrium of an economy with monopolistic competition looked like
    • Started describing Romer (1990)'s model of innovation and growth
  • ​Lecture 7:
    • ​Finished the discussion of Romer (1990)'s model of innovation and growth
    • Started introducing government into our model
  • ​Lecture 8:
    • ​Talked about the Laffer curve and equivalent tax systems
    • Discussed Diamond and Mirrlees (1971)'s result on production efficiency
    • Started working on the primal approach to optimal taxation in a static economy
  • ​Lecture 9:
    • ​​Finished discussion of the primal approach in the static problem and talked about how elasticities affect optimal taxes
    • started working on the dynamic model
  • ​Lecture 10:
    • ​Finished discussion of optimal dynamic taxation
    • Started on the model with uncertainty
  • ​Lecture 11:
    • ​Discussed further the model with uncertainty
    • The very nice paper by Yaari on an alternative way to approach preferences under uncertainty: Link
  • ​Lecture 12:
    • ​​Asset pricing and the Equity Premium Puzzle

Problem Sets
Problem Set 1 - [PDF] Due on 11/1/2018 - Solutions by Diana and Zahra - [PDF]
Problem Set 2 - [PDF] Due on 11/8/2018 - Solutions by Diana and Zahra - [PDF]
Problem Set 3 - [PDF] Due on 11/18/2018 - Solutions by Diana and Zahra - [PDF]
Problem Set 4 - [PDF] Due on 12/3/2018
Problem Set 5 - [PDF] Due on 12/12/2018

​Last year's class page