# Diary of Econ 4230, Spring 24

## 14. Mar 13

We talk a bit about the extent to which the U.S. has a progressive tax system. (sort of, but there is a bit of regressivity around receiving some transfer payments, the issue of social security, and excise taxes).

## 13. Mar 11

We review the Ricardian Proposition. We start looking at The Fiscal Situation in the U.S. and Generational Accounting. We go over a summary of Gokhale's Generational Accounting findings. Please read Short Version of Generational Accounting. We may start talking about the U.S. income tax system, , the history of the U.S. income tax and the meaning and properties of a tax code. and its properties.

## Mar 4, and 6 Spring break

## 12. Feb 28

We discuss the budget constraint of the government. We describe how to link model and data in terms of fiscal policy and we start the Ricardian proposition and its exceptions: Borrowing constraints, transfers of the tax burden (to the extent that altruism is not operational), and non lump sum taxation. Please read Why do Retired Households Draw down their Wealth so Slowly?

## 11. Feb 26

We review constant relative risk aversion preferences. We start income risk. We talk about various issues involved with quadratic utility. We go over income risk in detail. We characterize the solution under quadratic utility. We pose the problem of expected utility maximization using the probabilities of each state. We finish uncertainty going over the problem of log utility. We start Part IV, Positive Theory of Government Activity.

## 10. Wed Feb 21

We have the first midterm. It covers all we have seen except income uncertainty.

## 9. Mon Feb 19

We finish the many period lifemodel including an example and how it fares with respect to the empirical evidence. We discuss various explanations for consumption over the life cycle to be humped shape. We look at constant relative risk aversion preferences.

## 8. Wed Feb 14

We discuss the views of Elsby, Hobijn, and Sahin on the Decline of the U.S. Labor Share. We revisited the effects of fiscal policy with and without lump sum taxation. We start with Part III, the many period life cycle model.

## 7. Mon Feb 12

We look at the fall of labor share and its 3 candidate explanations. We discuss distortionary taxation with lump sum transfers. We discuss the effects of distortionary taxation with a tax in first period consumption.

## 6. Wed Feb 7

We talk about 2 special topics: first bankruptcy and some properties of the U.S. bankruptcy code and then some of the problems of measuring GDP. We review the general equilibrium model (the two period Overlapping Generations Model). We look at population growth.

## 5. Monday Feb 5

We talk about inequality in the U.S. and Health. Please read the linked material before class to then have a thorough discussion.

## 4. Wednesday Jan 31

We finish borrowing constraints. We went over a general equilibrium environment: the Overlapping Generations Model with Production discussing the steady state (capital, wages, interest rate, consumption) and dynamics. I asked you to go over a surprise change in the production function.

## 3. Monday Jan 29

We continue the two period model. We discuss an example, and comparative statics, and solving the model with perfect borrowing. We look at the proposition of welfare consequences of interest rate changes. We start borrowing constraints.

## 2. Wednesday Jan 24

We finish with the facts of the US. (cyclical behavior, debt). We start the two period model with the description of the objective function.

## 1. Monday Jan 22

We go over the rules of the course and some of the facts of the U.S. Government sector (Slide 17).