Diary of Econ 4230, Spring 23

We have the third midterm.

We discuss the problem set, we summarize the issues involved in climate change and we talk briefly about COVID and Economics and especially, inequaltiy.

We finish damages; we look at the problem of what to do and we say some things about the nature of the solution.

We look at the optimization problems. We start damages.

We start at Non-Structural Carbon Circulation Models

We continue with the model of climate change. We look at non-linearities and tipping points and start the carbon cycle.

We begin to look at climate change (pg 22).

We finished looking at externalities.

We finish social insurance. We start to look at externalities.

We have the second midterm.

We finish Social Security. We talk about social insurance. Second Homework is due.

We finish looking at how our theory accounts for international differences in hours worked. We talk about Social Security (247).

We finish social welfare functions. We look at the problem of a household with consumption, and labor and capital income taxes. We look at the proposition that labor and consumption taxes are the same with and without labor income. We start looking at how our theory accounts for international differences in hours worked.

We talk about the Modern Monetary Theory and about crypto currencies, especially bitcoin. We finish discussing the marriage penalty and go over the advantages of marriage. We then go over the alternative minimum tax, the earned income tax credit and capital gains. Then we go into normative stuff and social welfare functions.

We talk about a few other properties of the U.S. tax system such as progressivity and regressivity. 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). We talk briefly about the marriage penalty. (slide 209)

We finish Generational Accounting. We start talking about the U.S. income tax system and its properties (193).

We continue 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 (looking for examples of it, like the poll tax or the tax of height). 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.

We finish uncertainty going over the problem of log utility. We start Part IV, Positive Theory of Government Activity discussing 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. (165)

We have the first midterm. It covers up to what we have seen, including income uncertainty with quadratic utility and how to pose a maximization of expected utility.

The first homework is due. We answer some questions of the homework. 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 answer questions about the homework. We go over income risk. We talk about various issues involved with quadratic utility.

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. We start income risk. (Slide 131)

We discuss distortionary taxation with lump sum transfers. We talk about 3 special topics, bankruptcy, GDP measurement and the fall of labor share and its 3 candidate explanations. We start with Part III, the life cycle model. (to 104)

We discuss comparative statics, solving the model with perfect borrowing. I look at the proposition of welfare consequences of interest rate changes. We look at borrowing constraints. We discuss bankruptcy and some properties of the U.S. bankruptcy code. We start the general equilibrium (slide 60)

We start the two period model with the description of the objective function (slide 30).

We finish with the facts (cyclical behavior, debt). We talked about inequality in the U.S. and Health. Please read the linked material to have a more thorough presentation/discussion at a later date.

Because of poor student attendance on the first day of class, we repeated the first class going over the main properties of the course. We discussed some properties of National Income and Product Accounts aggregates in the U.S. and we went up tp discussing the main receipts and outlays of the U.S. jurisdictions (Federal vs State and Local). (Slide 19)

We go over the rules of the course and some of the facts of the U.S. Government sector (up to slide 19).