ECON407, Fall 2020

Course material and schedules for ECON407 in 2020 fall

Syllabus

Check Syllabus for more details.

Final Project. Due date: December 22nd, the last day of exams.

Jupyter Hubs

You can either use UBC Syzygy Jupyter Hub or Google Colab for a free Jupyter hub.

Lectures

1. September 8th: Imagine Day at UBC. Class cancelled.

2. September 10th: Logistics, Syllabus, Math Review

3. September 15th:

   • Finish Math Review: Leftover proof; Example of constrained optimization; Probability part
   • Introduction to Python
     • Setting up Environment: Local installation, or UBC Jupyter Hub
     • Jupyter Notebook Basics: Code block / Markdown block, running codes, function help, etc
     • Try running codes as in An Introductory Example. Make yourself familiar with Jupyter notebook
   • Python Basics
     • In addition, go over Writing Good Code by yourselves

4. September 17th:

   • Collections and Numpy vector/matrix operations
     • Please go over Numpy by yourselves
   • Control Flow, Functions
     • For those who don't have programming experience before, please go over Python Essentials for reference and details.

5. September 22nd:

   • Briefly cover Numpy vector/matrix
     • Please go over the Jupyter notebook carefully. We won't go over all of them in detail.
   • Finite Markov Chains. Some Python code examples here

6. September 24th:

   • Finish Finite Markov Chains: properties of Markov chain, distribution simulation, etc.
     • Python code examples here

7. September 29th:

   • Introduction to Dynamic Programming:
     • Maximum Path Sum
   • The definitions of value function and policy functions
   • Handle questions and discussions for Problem Set 1

8. October 1st:

   • Dynamic Programming continued: Shortest Paths on a directed acyclic graph
   • An example in Economics: McCall Model

9. October 6th:

   • Problem Set 1 Review
   • Lab session for Basic Python coding for the rest of the class
     • Check Programming Examples for details

10. October 8th:

    • More formal introduction to Discrete Dynamic Programming
    • McCall Model continued

11. October 13th:

    • Code to solve Discrete Dynamic Programming problems with McCall Model
      • Code example used in class is here
      • Note: We will differ a bit from the QuantEcon lectures, therefore going through the webpages might not be sufficient.
    • Practice formulating Bellman equations and coding to solve them
      • An example similar to An Extension of McCall Model

12. October 15th:

    • Two more examples for variations of McCall Model
      • Formulate the Bellman equations
      • Code to solve the model
      • If you are interested, you can check the following lectures here (you don't have to)

13. October 20th:

    • Problem Set 2 Review
    • Stochastic Growth / Real Business Cycle Models
      • Motivation
      • Check RBC Notes

14. October 22nd:

    • RBC model continued

15. October 27th:

    • Problem Set 3 Review
    • Solve the model
    • The simplest General Equilibrium: adding labor into RBC
      • Motivation
      • Check RBC Notes

16. October 29th:

    • Risk Aversion
      • We will further talk about it when covering simple asset pricing applications
    • Policy function analysis
      • Check the updates of Solve the model
    • Shortcomings of RBC
      • Check a comment from Larry Summers
      • Parameters? Shocks? Market Clear? Monetary Policy?

17. November 3rd:

    • Discretize an AR(1) process
    • Lucas Asset Pricing Model
      • Check this lecture for further reading

18. November 5th:

    • Lucas Asset Pricing Model continued
    • CAPM and CCAPM
    • Asset Pricing in Finite State Space

19. November 10th:

    • Example of CCAPM asset pricing
    • Incomplete Markets on the household side: Income fluctuation and Aiyagari model

20. November 12th:

    • Problem Set 4 Review
    • Incomplete Markets on the household side: Income fluctuation and Aiyagari model, continued
      • Permanent Income Hypothesis

21. November 17th:

    • Natural borrowing limit
    • Solving the Income fluctuation Problem
      • Comparative statics and further discussions
    • Inequality and redistribution implications

22. November 19th:

    • Incomplete Markets on the firm side: The firm investment problem
      • Notes
    • Tobin's q, and the value of the firm

23. November 24th

    • Average Q vs Marginal Q
    • Hayashi (1982), convex adjustment cost
    • The value premium
      • check updated Notes

24. November 26th

    • Entry, Exit, and Firm Dynamics
      • Model with Entry and Exit
      • Empirical motivations

25. December 1st

    • Modeling COVID in macroeconomics
      • Check this paper and their slides

26. December 3rd

    • Optimal government policy: Ramsey problem

Assignments

1. Problem Set 1 due on September 30th
2. Problem Set 2 due on October 14th
3. Problem Set 3 due on October 25th
4. Problem Set 4 due on November 9th
5. Problem Set 5 due on December 6th