# Diary of Econ 244, Spring 18

## 1 Jan 10

Wu went go over the rules of the course and some of the facts of the U.S. public sector

## 2 Jan 17

I talked about the plan of the course and continued with the facts of the U.S. public sector.

## 3 Jan 22

I started the two period model with the description of the objective function, the constraints, the first order conditions and the guarantee of a unique solution.

## 4 Jan 24

I continued the two period model with the graphic description of the problem and we performed comparative statics.

## 5 Jan 29

We finished solving the model with perfect borrowing. We looked at borrowing constraints. We discussed bankruptcy and some properties of the U.S. bankruptcy code. We started looking at the general equilibrium model.

## 6 Jan 31

We discussed again the proof of the proposition that states that borrowers are better off after a decrease in the interest rate. We continued the discussion of the two period Overlapping Generations Model Model.

## 7 Feb 5

We continue discussing the general equilibrium model. We looked at what happens when there is population growth and households discount the future. We looked at the dynamics of this model. We started posing taxes and lumps sum taxes in the agents’ problem.

## 8 Feb 7

We finished Part I continuing with the discussion of taxes to the simple life cycle model including its general equilibrium Overlapping Generations implementation. We started the many period model

## 9 Feb 12

We finished the many period model. We started the model with income risk.

## 10 Feb 14

We will finish income risk. We will look at the data counterparts of the model predictions. We will talk about what could account for the differences. We may start the third part.

## 11 Feb 19

We had the first midterm

## 12 Feb 21

We started with the positive theory of Government Activity and we talked talk about the Ricardian Proposition.

## 13 Feb 26

We talked about the Ricardian Propositions and its exceptions: Borrowing constraints, transfers of the tax burden (to the extent that altruism is not operational), and non lump sum taxation. We also discussed briefly the tax of height.

## 14 Feb 28

We went go over a summary of Gokhale’s Generational Accounting findings.

## 15 Mar 12

We went go over the history of U.S. income taxes, the U.S. income tax rates and we will talk about properties of the tax system (progressivity, regressivity). We discussed the marriage tax penalty and whether it is a good idea and why do people marry nevertheless.

## 16 Mar 14

We discuss Social Welfare Functions. We start looking at the problem of a household with consumption, and labor and capital income taxes.

## 17 Mar 19

We finish the problem with various taxes. We started to look at how our theory accounts for international differences in hours worked. properties.

## 18 Mar 21

Class cancelled by the University’s suspension of normal operations.

## 19 Mar 26

We will finish looking at how our theory accounts for international differences in hours worked. We looked at Social Security, its history and institutional properties. We started the theory of Social Security.

## 20 Mar 28

We have the second midterm

## 21 April 2

We look at household behavior when they face social security and to what it takes for people to prefer it. We talk about Unemployment Insurance. We posed the problem of how to think of computing an optimal policy (taking as given the reaction function of households).

## 22 April 4

We finish talking about unemployment insurance. We talk about the Pigou Tax.

## 23 April 9

We start climate change with a discussion of forcing and how the greenhouse effect affects long term temperatures. We define Equilibrium Climate Sensitivity.

## 24 April 11

We continue with climate change discussing the heating of oceans and the historical climate. We started to look at the Carbon cycle with two Reservoirs

## 25 April 16

We look at three reservoirs in an easy linear stock-flow model. We start looking at the blend of two modeling alternatives (Non-structural or reduced form and Structural of the Stock-flow approach), the carbon-climate response (CCR).

## 26 April 18

We discuss the damages created by the temperature increase.

## 27 April 23

We finish the damages created by the temperature increase. We look at how to calculate the best thing that can be done under the circumstances.

## 28 April 25

We look at the details of how to calculate the best thing that can be done and what are the first order conditions that it satisfies. We also look at some of how to implement that allocation. This is how to ensure that private agents do the actions that the social planner problem yield as best. This is how to find the Pigou taxes. We look at some of the properties of the optimal policy.

This finishes the course.