# Diary of Econ 7210, Spring 23, 2nd Session

## 14. Apr 26 We discuss a Climate Change Model and maybe an Epi-Macro models and we conclude the course.

## 13. Apr 24 An Endogenous Growth Model and a Model with Small Businesses

## 12. Apr 19 Extreme Value Shocks and Macro and Pandemics

We look at what are extreme value shocks and how they should be used in Macro.

## 11. Apr 17 Towards New Keynesian Models

We start looking at monopolistic competition. We discuss Calvo and Rottemberg pricing. I may name this paper for alternative preferences with interesting properties.

## 10. Apr 12 Other Issues in Aiyagari Type Economies

We continue looking at undirected search using as framework the Aiyagari Economy. We look at unsecured debt.

## 9. Apr 10 Aiyagari Economy

We look at the Aiyagari Economy and Policy Changes, Welfare and Business cycles in this Economy. We look at search.

## 8. Apr 5 We Finish Computation of MIT shocks and start the Farmer's problem

We apply the Boppart et al to the standard Social planner Model. We start looking at the farmer's problem with shocks and linear technology. We also look at the Huggett economy.

## 7. Apr 3 Midterm

## 6. Mar 29 We finish Industry Equilibria

We look at endogenous entry and exit, stationary equilibrium, adjustment costs. We talk about non-stationary equilibrium. We start the Boppart et al MIT shock approximation.

## 5. Mar 24 We review again Competitive finish Measure Theory and start Industry Equilibria

## 4. Mar 22 We went over endogenous productivity and competitive search. We start Measure Theory

## 3. Mar 20 Pricing Securities and Competitive Search

- We use no arbitrage conditions to price all kind of securities. We discuss the role of Preference Shocks. We start endogenous productivity and competitive search.

## 2. Mar 15 Recursive Equilibria without and with Distortions and the Lucas Tree

- We talk about the economy with a stock market. We start talking about economies with heterogeneity, starting with wealth. We talk about other types of heterogeneity (skills) and move into a two country economy. We start the Lucas tree. We look at Lucas trees and derive a pricing condition.

## 1. Mar 13 Intro

- I describe the course and discussed some context of what are the
main facts over which macro has to be organized around:
- output per capita has grown at a roughly constant rate
- the capital-output ratio has remained roughly constant (where capital is measured using the perpetual inventory method based on past consumption foregone)
- the capital-labor ratio has grown at a roughly constant rate equal to the growth rate of output
- the wage rate has grown at a roughly constant rate equal to the growth rate of output
- the real interest rate has been stationary and, during long periods, roughly constant
- labor income as a share of output has remained roughly constant
- hours worked per capita have been roughly constant.

- I discuss what restrictions do these facts pose on the models that we use.
- I discuss some of the limitations of this point of view.
- I discuss what is the meaning of an equilibrium (a mapping from environment to allocations)
- I go very fast over RCE equilibrium. First an optimal one. Then a few that are not optimal: We pose a government that spends.
- We describe equilibrium of economies where the welfare theorems are of no use: a government financing a public good with capital income taxes.
- We discuss an environment with capital income taxation and government debt.
- We talk about various forms of habits and/or externalities in consumption.