Economics 10b Study Guide - Final Guide: Taylor Rule, Overlapping Generations Model, Utility
13 Dec 2018
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Please use a separate blue book for each question and write the. Question number on the front of the blue book. Please put your exam number on each book. Please do not write your name on your blue books. This part of the exam has two questions designed to take 48 minutes in total: 23+25. Problem 1 (growth model: 23 minutes) recall the growth model that we discussed in class. Note that 0 1 problem. a. Interpret this equation economically and re-express it as a sequence: solve the bellman equation using guess and check. Start by guessing that the form of the solution is. Your grade depends on the quality of your explanation. : let ( ) be brownian motion. The expected distance, 0| ( ) (0)| rises linearly with : a bellman operator either has a unique xed point or no xed points, consider a consumer who has constant relative risk aversion, .
