EC417 Question List

EC417_Macroeconomics

This page serves as a questions list to answer the questions might help better understand EC417 Advanced Macroeconomics

General

• What drives planner’s allocation vs decentralized economy allocation?
  • Borrowing Constraint.
  • Incomplete Insurance
  • Externalities: households only consider their own utility, not the social welfare.
  • Notice: 当市场完全且无扭曲时,两种配置一致(第一福利定理)。差异产生于市场摩擦阻止了个体实现帕累托最优配置。

$$\frac{\partial p(a_1+a_2)}{\partial a_2}=p^{\prime }(a_1+a_2)\cdot \frac{\partial (a_1+a_2)}{\partial a_2}=p^{\prime }(a_1+a_2)$$

$T(x_1,x_2)=\{\begin{array}{ll}0& \text{if }(x_1,x_2)=\left(\frac{1}{2\sqrt{3}},\frac{1}{2\sqrt{3}}\right)\\ +\infty & \text{otherwise}\end{array}$

Lecture 8

• What does a stationary distribution mean?
  • It normally denotes to $g(a,y)$. If given policy function $a^{\prime }(a,y)$ and transition probability $p_{j{j}^{\prime }}$, if $g(a,y)$ remains the same overtime, then we say $g(a,y)$ is a stationary distribution. $g$ simply means the fraction of agents holding asset level $a$ and income level $y$.