Transcription of Lecture notes for Macroeconomics I, 2004
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Lecture notes for Macroeconomics I, 2004
Lecture notes for Macroeconomics I, 2004 Per KrusellPlease do NOT distribute without permission!Comments and suggestions are 1 IntroductionThese Lecture notes cover a one-semester course. The overriding goal of the course isto begin provide methodological tools for advanced research in Macroeconomics . Theemphasis is on theory, although data guides the theoretical explorations. We build en-tirely on models with microfoundations, , models where behavior isderivedfrom basicassumptions on consumers preferences, production technologies, information, and so is always assumed to be rational: given the restrictions imposed by the primi-tives, all actors in the economic models are assumed to maximize their studies emphasize decisions with a time dimension, such as variousforms of investments.
Proof outline. (1) Find a K⁄ candidate; show it is unique. (2) If K0 > K⁄, show that K⁄ < Kt+1 < Kt 8t ‚ 0 (using Kt+1 ¡ Kt = sF (Kt;L) ¡ –Kt).If K0 < K⁄, show that K⁄ > Kt+1 > Kt 8t > 0. (3) We have concluded that Kt is a monotonic sequence, and that it is also bounded. Now use a math theorem: a monotone bounded sequence has a limit. The proof of this theorem establishes not ...
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