Grad Macro I – First Issues and challenges

Posted: October 23, 2015 in Grad Macro I Fall 2015-2016

I just got back from our first TA meeting – and I am worried. The fact that you did not review differential calculus or Optimal Rodin thinkerControl techniques during the preparatory classes of September, but you are only scheduled to review them later in the semester, means that you are ill-prepared to follow the basic Growth models of Solow and Ramsey (and Dynamic Macroeconomics in general), at their mathematical levels.

The professor has uploaded in the main site of the course some material on these matters. Also, there are abundant relevant resources freely available over the web. The coming week during which you will not have a new class, please focus on reading about these mathematical techniques, and try to solve and understand the solution of the Solow and Ramsey models of optimal growth. Note that while the Solow model involves only a single differential equation (or difference equation) of the first order, the Ramsey model involves both Optimal Control techniques and a system of two differential equations of first-order.

I would recommend also Barro & Sala-i-Martin (2004) Economic Growth (2nd ed.) book. I find it a very good educational resource for graduate beginners on Growth Theory, with accessible and intuitive mathematical appendices. Try it.

I will also upload here some notes on these matters, to help you cope.

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