Macro 1 - Tepper School of Business

Class Notes - [PDF] - updated: 12/10, 1:53PM

Lecture 1: Slides - [PDF]

• We went over basic observations that we are interested in macro and tried to develop a two-sector model that speaks to it.
• 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:

• We further developed and simplified the two-sector model. Talked about aggregation, how to solve it and started thinking about its implications.
• New paper by Per Krusell and Timo Boppart on the decline of hours worked: Labor supply in the past, present, and future: a balanced-growth perspective - [PDF]

​Lecture 3: Slides - [PDF]

• Discussed various implications of the one-sector growth model. Started thinking about endogenous growth models.

Lecture 4:

• Discussed various version of the AK and AKH model as well as a special case of Romer's growth with externality paper and their implications
• Worked on a continuous time version of the one-sector growth model
• Started thinking about growth through productivity improvements or innovations.

Lecture 5 and 6:

• Discussed the basic version of Romer (1990)'s endogenous growth model via product innovation
• Started thinking about government policy and optimal policy problems

Lecture 7:

• Further discussed Uniform Commodity Taxation
• Extended our analysis of optimal taxation to dynamic models and showed the famous or infamous(!) Chamley-Judd result of zero capital taxation.

Lecture 8:

• Started introducing risk and randomness to our model.

Lecture 9:

• Discussed stationarity and long-run dynamics in stochastic models.
• Started discussing asset pricing

Lecture 10:

• ​Discussed The Equity Premium Puzzle and some of its resolutions
• Started the discussion of unemployment by looking at the McCall search model and the DMP model

Lecture 11:

• Discussed Rothschild and Diamond Paradox
• Solved the Burdett-Judd model
• Discussed Nash bargainging and the DMP model

Lecture 12:

• Finished the exposition of the DMP model

Problem Sets
Problem Set 1 - [PDF] Due on 11/3/2016 - Solution by Hakki [PDF]
Problem Set 2 - [PDF] Due on 11/15/2016 - Solution by Hakki [PDF]
Problem Set 3 - [PDF] Due on 11/23/2016 - Solution by Hakki [PDF]
Problem Set 4 - [PDF] Due on 12/7/2016 - Solution by Ali [PDF]
SL parts [PDF]
Problem Set 5 - [PDF] Due on 12/15/2016 - Solution by Ali and Hakki [PDF] SL parts [PDF]

Exams
Midterm - [PDF]; Solution - [PDF]
Final - [PDF]; Solution - [PDF]