Facoltà di Economia

You will find a treatment of the Certainty Equivalent Principle and an introduction to consumption-based asset pricing theory in Chapter 8 (Consumption) of Romer’s Advanced Macroeconomics, as well as in Chapter 7 (The model under uncertainty) of Rechilin’s Notes on Macroeconomic Theory.

Dear all, I have spotted a typo in the budget constraint of the last exercise of practice 4. You find the correct version on the website.

Sorry for the inconvenience,

Federico

The exam has been rescheduled on Friday, April 5, at 9:30am.

• Constant returns to scale and Euler's Theorem
• The law of motion of capital in Solow growth model
• Existence and uniqueness of a steady state in Solow growth model
• Transitional dynamics and long-run convergence in Solow growth model
• Types of technological progress
• Technological progress and Uzawa’s Theorem
• Necessary conditions for the dynamic efficiency of a steady state
• Sufficient conditions for the dynamic efficiency of a steady state
• Dynamic programing and the Bellman equation
• Euler equation and the transversality condition
• Derivation of the Euler equation in the Ramsey growth model
• Long-run convergence in the Ramsey growth model
• Saddle-path stability in the Ramsey growth model
• Competitive equilibrium and Ramsey optimal growth
• Euler equation for Ramsey optimal growth in a stochastic environment
• Euler equation in the deterministic optimal saving framework
• Euler equation in the stochastic optimal saving framework
• Exact determination of optimal saving in a deterministic environment with CES utility
• The law of motion of capital in an overlapping generations economy
• Substitution and wealth effects in an overlapping generations economy
• Dynamic inefficiency in an overlapping generations economy
• Social security and dynamic inefficiency in an overlapping generations economy
• First Welfare Theorem in an overlapping generations economy
• Consumption under uncertainty and the Certainty Equivalent Principle
• Interest rate and saving
• Precautionary saving
• Consumption-based asset pricing

Dear all,

The last practice class for the course will be held on March 28, from 2 pm to 4 pm.

Best,

Federico

Dear All,

I have uploaded the last problem set for the course. I am available for discussing the exercises with you if you need.

Best, Federico

Growth with overlapping generations is exhaustively discussed in Chapter 9 (Growth with Overlapping Generations) of Acemoglu’s Introduction to Modern Economic Growth, excluding Sections from 9.6 to 9.8.

You will find an introduction to optimal consumption and saving in a deterministic environment in Part 2 (Consumption and savings) of Reichlin’s Notes on Macroeconomic Theory.

In addition, interest rate and saving in the two-period case is presented in Chapter 8 (Consumption) of Romer’s Advanced Macroeconomics.