Department of Economics, University of Minnesota,
Minneapolis, MN 55455.
Tue and Th 12:20 pm to 13:50. In Hanson Hall,
4-168. Off Hours: Before and after class and by
appointment. http://www.econ.umn.edu/~vr0j/ec8503-13/,
email:
vr0j@umn.edu,
Phone-(612) 625-0941 Fax: (612) 624-0209
Fed Phone (612) 204-5528
The web page to sign up for homework presentations is
ready. Click
here Use the days where there is class. The page
is shared with the labor workshop.
What are we doing? A
class by class ex-post diary and a forecast of next class.
Mar 25.
We talked about the class and what it is
about. We discuss what are the possible topics to cover
(see below). We discussed every student's interests in
labor and how they may relate to the class covering
interesting issues for each of those interests. I asked
for somebody to start talking about labor leisure choice
presenting the details that can be found
in Per Krusell's Chapter 8
of his new macroeconomic textbook.
Mar 27.
Gabriel Zucman's seminar at the Fed. This was food for
thought. Can we think of reasons, this is, real models
that could deliver such wild oscillations in capital and
wealth to output ratios?
Apr 1.
Ming volunteered to describe chapter 8 of
Per's book. She did a great job. Thanks Ming. She told us
what restrictions are imposed on preferences by a balanced
growth path. She went over the proofs. I then argued that
maybe balanced growth path preferences in an unwarranted
requirement based on the logic of socialization. We then
talked about wages over the life cycle which are
hump-shaped. We started talking about 3
theories. Exogenous wages, learning by doing and learning
by not doing (Ben Porath).
Apr 3.
We wrote the dynamic problem associated
to the learning by doing and to the Ben Porath models. We
discussed what are their differences and showed that to
solve the implied problems we had to take advantage of the
end period conditions. We also discussed to what extent
can the problem be separated between income maximization
and consumption allocation. Mons then presented some ideas
of how to integrate both models simultaneously and how to
let data tell them apart. Thanks Mons. There are some
homeworks that ask you to solve these problems. I then
talked about issues of matching from AIDS to assortative
matching, and what kind of explanations may be behind its
increase.
April 8.
I ended up discussing the problem of
an impatient firm manager that faces a time inconsistent
problem described
here. This type of problem shows up in many contexts
including family contexts.
April 10.
I talked about the Skill premium
in wages
using
this paper and Sergio talked
about
this paper
on the characterization of the changes in distributions of
a variable with many associated characteristics.
April 15.
We discussed how decisions are
made within families and how families shapes
preferences. We went
Families as Shocks to argue that families matter.
April 17.
We discussed how to use family
models to measure how family type shapes preferences
using
using this paper.
April 22.
We started with a theory of household
formation
using
this paper as an example.
Joaquin will talked
about the
Shimer puzzle. Thanks Joaquin. We then discussed the
shortcomings of standard theory in accounting for the
volatility of labor and of how macro models handle the
issue.
We talked about wealth
heterogeneity. Dirk presented
Piketty and Zucman's recent paper
using these
slides. Thanks Dirk. I also talked
about the stuff on Piketty's book. This finished the
course. Thanks to all.
List of Homeworks Organized
by batchs.
First Homework batch. Do
it by April 8.
A Ben Porath problem.
1.A In the last model of human capital investment
that we saw in class ( agents die every period with
probability λ and are replaced. The newborns are born
with measure x0 over h. Assume further that
x0
puts positive measure only over a finite number of values
hi of h.
The evolution of human
capital is h'=h(1+y ε) and income is given by
h(1-α y2/2). Calculate a formula for the
long run value of average income.
1.B Give another formula for the long run variance
of income.
1.C State the problem with a progressive income tax
and lump sum redistribution. Comment it.
1.D Change the functional form for income so that
whether effort or luck matters is a function of one
parameter. Comment it.
Course Description
This course should be thought of as a Labor course with a
close link to Macro that should be of interest to people that
care about both areas. Its main purpose is to link models and
data i.e. to answer quantitative questions that we are
interested in (in the process of doing so, some interesting
theoretical questions arise). We will develop tools by stating
general questions, and then discussing how to approach its
answer.
This is a Ph.D. course not a Masters course. We are not here
to learn about existing work but to learn about how to do
work, and, therefore, it requires to do some things.
Format.
Every class except the first one we will devote the first
twenty minutes or so to students presentations of
homeworks. I expect professional competence in this regard.
Relation to 8501. This course
complements 8501. We will overlap a bit, but there are enough
differences to make them all worthwhile to the enthusiast.
Content. This year, I want to change
the course a bit to taylor students' particular interests.
In terms of possible content here is a list of some of the
issues that we may also cover. In the end we will do a combo
of both things depending on interest, energy, and mood.
Wage formation. Over ages,
education, sexes, occupation, marital status,
states, cities, what not.
Household Types. Single,
cohabitating, married, with children, with other
adults, with elderly, sharing dwellings. How does
it shape people?
Household Formation. How does
it change? How is it chosen? Both children and spouses.
Time Allocation. What do we do
with our time? Is labor/leisure useful?
Engagement in the labor market.
Female labor force participation, choices of hours,
retirement.
Really?
The Frisch elasticity of labor and how the
macro and the micro relate to each other.
Occupational Choice. What career
to choose (in a parallel sense). This includes
entrepreneurship, and even which legal status to
choose.
Crime. We will think of it in
part as a form of occupational choice (for property
crime). But we will also talk in terms of murder. How
could we think of it.
Savings and borrowing. With
special emphasis on the particular set of U.S. laws
that guarantee the right to bankruptcy.
Death and Health. Death is
unequal why people die? Does health care matter?
Really?
Aggregate Search Models. We will
look at how to build protoypical search models with
flows of workers entering and exiting the labor
force.
Aggregate Fluctuations and Macro in
general. Are any of these things changing over
time?
Course Requirements
Students will place the solution to the homeworks and to
other requirements in electronic form.
You should have a subdirectory with your id name and the write to
read an write in /pkg/8503-13
If you do not have such a directory, please email
4help@umn.edu asking for one.
There are various types of requirements that are a necessary
part of the course, all of which have to be fulfilled.
Regular Homeworks.The ones posted
here. Full credit only if on time. Partial credit otherwise.
Class Presentations Every student
will make at least two class presentations with at least
one being of a subset of a homework. The first
presentation should take no more than 15 minutes and it
will be absolutely professional. Every second wasted,
every statement not planned, every bad thing will be
highlighted. The second presentation (that will depend on
class size and interests) maybe on a paper or on another
homework.
Referee Report. I will assign a
paper to each of you as we go along to write a referee
report and perhaps also to present the paper in no more
than 20 minutes. The refere report should be no longer
than five pages and should contain a clear and concise
exposition of the main points of the article as well as a
critical evaluation of the article's contributions. In
addition, you should write a letter to the editor with your
personal recommendations. If very good, I will use them,
anonymously.
Wikipedia Article. Optional, but
excellent training. This is something that should be done by
the end of the course. The moment you post it email me and
place a copy in your directory. Think of a topic of the
course no matter how silly.
This course believes drastically in Learning by Doing. To learn
the material that we cover requires that students do all the
homeworks in a timely manner. Given the way to collect the
homeworks, timeliness is automatically recorded. I will look at
what is done weekly.
Grading Rules and Registration.
To do superbly in the course, registered students have to do all
the requirements well.
For those that do not register but take the course, I recommend
that they do the homeworks. We learn to solve problems by facing
them. Learning jointly with others greatly speeds the
process.
In any case, the University is to help you learn and become
a great economist not to issue grades, so use the course in
the way you say it is best for you. If all equal, register
so that there is evidence that the course is useful.
What about the prelim?
The prelim will consist on some problem or question or
discussion of something that has been at the core of the
course. Take a look at the last two prelims (from Kara, I think)
and the homepages of the courses of previous years (via my
homepage) for clues.