Econ 3002 - Fall 2019

Syllabus

-  Course Description and Outline

Assignments

-  Assignment 1  (Due September 24)
-  Assignment 2  (Due October 29)

Lecture Slides

Lecture 1 (Outline)
Lecture 2 (Outline)
Lecture 3 (Outline)
Lecture 4 (Outline)
Lecture 5 (Outline)
Lecture 6 (Outline)
Lecture 7 (Outline)
Lecture 8 (Outline)
Lecture 9 (Outline)
Lecture 10 (Outline)
Lecture 11 (Outline)
Lecture 12 - Revised QE Lecture by T. Sargent on "Ramsey Plans, TIme Inconsistency, Sustainable Plans" (video, part1, part 2)
Lecture 13 - Thoughts on Credible Public Policies + "Consumption and Tax-Smoothing for Babies" by T. Sargent (video link. To
                     access the video, you may need to subscribe to Sargent's youtube channel).
                  - Slides on "American War Finance" by G. Hall & T. Sargent provide fascinating illustration of these ideas
Lecture 14 - Two youtube lectures by T. Sargent on the Lucas-Stokey (1983) model. This model provides the foundation for the
                     entire dynamic optimal taxation literature. It introduces the so-called "primal approach". It also provides a nice illustration
                     Dynamic Programming Squared.  "Consumption & Tax Smoothing for Adults" (part 1,  part 2). The key difference from
                     the previous "baby" lectures is that prices are now endogenous, and the government optimally exploits this endogeneity.
                    (Again you may need to login to Sargent's youtube channel).

                     The following Jupyter notebook, recently written by T. Sargent, returns to the issue of "invertibility" in linear state space
                      models, which is a topic we touched on briefly in Lecture 3 when discussing Quah's paper. Sargent compares the behavior
                      of two LQ/PI agents who receive identical labor income processes. However, one agent has an informational advantage, i.e.,
                      his innovations provide "news" about his future labor income. Sargent provides an interesting fiscal policy/Ricardian Equivalence
                      interpretation of this informational advantage. Here is the notebook:  "Information and Consumption Smoothing".  I don't think it's
                      on the QuantEcon site yet.

Papers

Hansen (2014),  "Nobel Lecture: Uncertainty Outside and Inside Economic Models",  Journal of Political Economy

Sargent (2004),  "Autoregressions, Expectations, and Advice",  American Economic Review

Anderson, Hansen, McGrattan & Sargent (1996), "Mechanics of Forming and Estimating Dynamic Linear Economies",  from Handbook of Computational Economics

Fernandez-Villaverde, Rubio-Ramirez, Sargent & Watson (2007),  "ABCs (and Ds) of Understanding VARs",  American Economic Review

Campbell & Deaton (1989),  "Why is Consumption So Smooth?",  Review of Economic Studies

Quah (1990),  "Permanent and Transitory Movements in Labor Income: An Explanation for `Excess Smoothness' in Consumption",  Journal of Political Economy

Guvenen (2007),  "Learning Your Earning: Are Labor Income Shocks Really Very Persistent?",  American Economic Review

Blanchard, L'Huillier & Lorenzoni (2013),  "News, Noise, and Fluctuations: An Empirical Exploration",  American Economic Review

Alvarez and Jermann (2005),  "Using Asset Prices to Measure the Persistence of the Marginal Utility of Wealth",  Econometrica

Hansen and Sargent (2008),  "Robustness"  (Chapters 1-3)

Hansen and Sargent (2008),  "Robustness"  (Chapters 9-10)

Hansen and Sargent (2008),  "Robustness"  (Chapter 13)

Kasa (2018),  "Notes on Brownian Motion and Stochastic Calculus"

Kasa (2018),  "Notes on Continuous-Time Dynamic Programming"

Hansen and Sargent (2011),  "Wanting Robustness in Macroeconomics",  Handbook of Monetary Economics

Barnett, Brock & Hansen (2019),  "Pricing Uncertainty Induced by Climate Change",  working paper

Dew-Becker and Nathanson (2019),  "Directed Attention and Nonparametric Learning",  working paper

Hansen, Sargent & Tallarini (1999),  "Robust Permanent Income and Pricing",  Review of Economic Studies

Barillas, Hansen and Sargent (2009),  "Doubts or Variability?",  Journal of Economic Theory

Hansen and Sargent (2010),  "Fragile Beliefs and the Price of Uncertainty",  Quantitative Economics

Hansen and Sargent (2019),  "Structured Uncertainty and Model Misspecification", working paper

Hansen and Sargent (2019),  "Macroeconomic Uncertainty Prices when Beliefs are Tenuous",  working paper

Sargent and Velde (1999),  "Optimal Fiscal Policy in a Linear Stochastic Economy",  from Computational Methods for the Study of Dynamic Economies

Evans and Sargent (2013),  "History-Dependent Public Policies",  from Macroeconomics at the Service of Public Policy

Bhandari, Evans, Golosov & Sargent (2017),  "Fiscal Policy and Debt Management with Incomplete Markets",  Quarterly Journal of Economics

Hansen and Sargent (2012),  "Three Types of Ambiguity",  Journal of Monetary Economics

Colocito, Croce & Liu (2019),  "Recursive Allocations and Wealth Distribution with Multiple Goods: Existence, Survivorship, and Dynamics",  Quantitative Economics

Bray and Kreps (1987),  "Rational Learning and Rational Expectations",  from Arrow and the Ascent of Modern Economic Theory

Marcet and Sargent (1989),  "Convergence of Least-Squares Learning Mechanisms in Self-Referential Linear Stochastic Models",  Journal of Economic Theory

Hansen (2007),  "Beliefs, Doubts, and Learning: Valuing Macroeconomic Risk",  American Economic Review

Adam, Marcet & Nicolini (2016),  "Stock Market Volatility and Learning",  Journal of Finance

Sargent (2008),  "Evolution and Intelligent Design",  American Economic Review

Fudenberg and Levince (2009),  "Self-Confirming Equilibrium and the Lucas Critique",  Journal of Economic Theory

Cho and Kasa (2015),  "Learning and Model Validation",  Review of Economic Studies

Data Sets and Programs

LQPIData.xls