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 24.
We talked about the class and what it is
about. We discuss what are the possible topics to cover
(see below). I asked
for somebody to start talking about time use. Another important
thing to talk about that I am still asking is a recent paper by
Taber and Vejlin.
Mar 26.
Tsan-Yao (Yao) talked about time use
(Thanks Yao). We also talked about how to highlight
important properties of it. Then I went on to talk about
the learning by doing model and the learning by not doing
model (the Ben Porath model). Jorge volunteered
some slides on this model
(Thanks Jorge). I asked how to solve these two models by
posing shooting algorithms.
Mar 31.
Sergio presented the solution to the
human capital accumulation model. The learning by doing
model. We talked about various features of this model. I
asked everybody to write and solve a life-cycle problem of
savings with discrete shocks to earnings. ALl should do
(or be able to do) this. This problem should be posed
recursively. I also ask for some people to look at how to
solve the problem with two dimensions, assets and a
continuous shock, and to propose innovative ways of
solving it. A possible place to start
is
here. We started talking about what a family could be
by posing possible arguments of the utility function. We
also talked about how a decision can be arrived to when
there are private and locally public goods.
April 2.
We discussed how decisions are made
within families and how families shapes preferences. We
talked about various features of family models. How to
pose preferences, how to pose bequests, what is the
meaning of complete markets. We ended with the posing of
the problem of the single agents.
April 7.
Jorge presented how to solve the
Aiyagari model with labor as a continuous variable. Thanks
Jorge. During the presentation we talked about many issues
associated with the strategy to solve the problem as well
as with the meaning of the solution and where are the
difficulties. Thanks Jorge.
April 9.
We went over the problem of a married
couple that has to choose savings. We discussed three
possible mechanisms to make such a choice. We will see
how important marital formation is by looking
at
Families as Shocks.
April 14.
I talkef about how to extract
information from life insurance data
using
these slides. We started discussing endogenous
family formation. For this we
used these
slides.
April 16.
We talked about how to model
endogenous family formation jointly with fertility. For
this we
used these
slides.
April 21.
We talked about how mortality varies
using
these slides.
April 23.
We talked about how to measure what
health does to people
using
these slides.
April 28.
Emily talked about
Preventive vs. Curative Medicine using Serdar's
research. We started talking about wages with a cursory
description of the things that allows us to organize our
thinking about changes in wages.
April 30.
Vegard presented "Allostatic
load". Thanks Vegard . We talked about crime and
self-employment as occupational choice. While doing it, we
discussed the possiblity of having an endogenous earnings
distribution via career choices.
May 5.
I talked about bankruptcy and
default. In doing this, I developed the GEE of a problem
without commitment.
May 7.
I continued talking about bankruptcy and
default. I
used
these slides to get to the GEE of these problems. We
discuss the extent of these tools. This finishes the
course. I emphasized the need to know how to solve in the
computer a simple OLG model with shocks.
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 x^{0} over h. Assume further that
x^{0}
puts positive measure only over a finite number of values
h_{i} of h.
The evolution of human
capital is h'=h(1+y ε) and income is given by
h(1-α y^{2}/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.
Second Homework batch. Do
it by April 15.
A Life Cycle Aiyagari problem.
2.A Pose and solve a model where agents live I
periods, and have a Markov chain process for the endowment
of efficiency units of labor (finite support).
2.B Solve the same model where the process for
labor is Markovian but has continuous, bounded
support. Discuss the computational methods that you followed.
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.