What This Document Is
This is a homework assignment for an introductory graduate-level Macroeconomics I course (ECON 501) at Washington University in St. Louis. It focuses on applying theoretical models to analyze consumer behavior and economic growth. The assignment challenges students to demonstrate a strong understanding of dynamic optimization techniques and their application to representative agent models. It builds upon core macroeconomic principles related to consumption, investment, and capital accumulation.
Why This Document Matters
This assignment is ideal for students currently enrolled in a graduate-level macroeconomics sequence, particularly those focusing on growth and dynamic general equilibrium models. It’s most beneficial when used *after* initial lectures and readings on intertemporal optimization, representative agent frameworks, and neoclassical growth theory. Working through these problems will solidify your understanding of how to model long-run economic outcomes and the factors influencing them. It’s also valuable practice for students preparing for more advanced coursework or research in macroeconomics.
Common Limitations or Challenges
This assignment presents complex analytical problems. It does *not* provide step-by-step solutions or worked examples. Students will need a solid foundation in calculus, optimization, and economic modeling to successfully complete it. The assignment assumes familiarity with concepts like value functions, decision rules, and depreciation rates. It also doesn’t offer explanations of the underlying economic principles – it expects you to *apply* those principles.
What This Document Provides
* Two distinct problem sets, each exploring different aspects of dynamic economic modeling.
* Scenarios involving representative consumers with specific preference structures.
* Production technologies with varying characteristics (e.g., Cobb-Douglas, linear).
* Opportunities to apply “guess-and-verify” methods to solve for optimal consumption and investment policies.
* A framework for interpreting economic models through relatable analogies (e.g., the “cake-eating” problem).
* Questions prompting analysis of conditions leading to unbounded consumption growth.
