Lecture 5

Question 1

Define the Arrow-Debreu Competitive Equilibrium for the standard growth Model.

Answer 1

Question 2

Define the Sequence of Markets Competitive Equilibrium for the standard growth Model.

Answer 2

Question 3

Define the Bellman Equation formulation for the standard Growth Model.

Answer 3

Very similar to this.

Question 4

In stochastic heterogeneous models, we must provide a probabilistic process for our random variable, for example income. Describe the process of creating a Discrete State Markov Process.

Answer 4

Question 5

Write down the Bellman equation and the conditions needed in the Heterogeneous stochastic consumer savings problem.

Answer 5