Thank you for watching the video! For the other central macroeconomic model (the Ramsey-Cass-Koopmans model), please see The Ramsey-Cass-Koopmans model Part 1: th-cam.com/video/yzUm6JkccXg/w-d-xo.html The Ramsey-Cass-Koopmans model Part 2: th-cam.com/video/2KU52fLH2UU/w-d-xo.html If you are interested in modelling poverty traps in an overlapping generations model, please see th-cam.com/video/ZtpFlRQ7s20/w-d-xo.html For the effects of automation in an overlapping generations model, please see th-cam.com/video/FQn0DzCiHgU/w-d-xo.html If you are interested in macroeconomics, please see the following playlist on Advanced Macroeconomics: th-cam.com/play/PLHCd4G3qW92kRLjoJN32TNz5QyhftE83j.html Thank you very much for your kind comments that I appreciate a lot.
Klaus, if only you knew how much of my life i owe to you - I just passed my Msc in Economics and i genuinely could not have achieved it without the macroeconomics lectures you provide. Its always clear consise and detailed. No matter what other videos i watch, yours are consistently the best and most thorough expose of the material, much better than my lecturer! If i could buy you a beer as a thank you for what you have done for me, i would!!!
Thank you so much for your positive feedback! I am very happy that the videos were helpful to you. Congratulations on successfully passing the Msc in Economics. Perhaps one day we meet and drink the beer :)
Here is a link to the Playlist on the endogenous growth framework that also contains further extensions (such as the semi-endogenous growth model and a semi-endogenous growth model with endogenous human capital accumulation): th-cam.com/play/PLHCd4G3qW92nPlJKqx-tcoOQ64jdOGkGk.html Please note that the AK growth model is often used as a shortcut formulation of the Romer (1990) model of endogenous technological progress that is discussed in the first two videos of the playlist. However, as compared to the Romer (1990) model, it has several shortcomings (e.g., it leaves no room for technological progress in explaining long-run growth and it implies a capital income share of one). I hope this is useful.
Thank you! I am glad you find the video helpful! For intertemporal models of open economies, I would recommend the freely available textbook of Schmitt-Grohe, Uribe, and Woodford, where the latest version I am aware of is available here: www.columbia.edu/~mu2166/UIM/suw.pdf. Also the book by Obstfeld and Rogoff: Foundations of International Macroeconomics is a very good source although it is from the late 1990s.
Thank you professor Klaus, your explanations are spectacular!. I have a question, please. In the 22:30 min (slide 10), why is the marginal productivity of capital sometimes equated with r_{t+1} and other times with r_{t}?. For example, in your paper (with Ana Abeliansky): "Population Growth and Automation Density: Theory and Cross-Country Evidence", in the optimization firm problem, you consider R_{t+1}=marginal productivity of capital, but in others papers, it is R_{t}=marginal productivity of capital. I get confused, since in my OLG model I consider that adult agents consume in t and save for old-age consumption in t+1: U = log (c_t) + \beta log (R_{t+1} s_ {t} ), but my question arises how to determine R_{t+1}. Is it determined in the marginal productivity of capital en time t or t+1? Thank you very much!
Yes, this is mainly an issue of convention in notation. The standard way of proceeding is to assume that interest is paid at the end of the period and this is then denoted by r_{t+1} although the interest rate is determined in period t as the marginal product of the capital used in production at time t. I hope this helps!
Under very special assumptions, these OLG models with more than two periods can still be solved analytically. However, the standard approach in the OLG literature with more than two periods is to use numerical methods to simulate the models. The standard source for this method is the book "Dynamic Fiscal Policy" by Auerbach and Kotlikoff. If you assume perfect intergenrational altruism (full bequests), then the solution of the model would converge to the solution of the infinitely-lived representative agent model, i.e., the Ramsey-Cass-Koopmans model.
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Thank you for watching the video!
For the other central macroeconomic model (the Ramsey-Cass-Koopmans model), please see
The Ramsey-Cass-Koopmans model Part 1: th-cam.com/video/yzUm6JkccXg/w-d-xo.html
The Ramsey-Cass-Koopmans model Part 2: th-cam.com/video/2KU52fLH2UU/w-d-xo.html
If you are interested in modelling poverty traps in an overlapping generations model, please see
th-cam.com/video/ZtpFlRQ7s20/w-d-xo.html
For the effects of automation in an overlapping generations model, please see
th-cam.com/video/FQn0DzCiHgU/w-d-xo.html
If you are interested in macroeconomics, please see the following playlist on Advanced Macroeconomics:
th-cam.com/play/PLHCd4G3qW92kRLjoJN32TNz5QyhftE83j.html
Thank you very much for your kind comments that I appreciate a lot.
Klaus, if only you knew how much of my life i owe to you - I just passed my Msc in Economics and i genuinely could not have achieved it without the macroeconomics lectures you provide. Its always clear consise and detailed. No matter what other videos i watch, yours are consistently the best and most thorough expose of the material, much better than my lecturer! If i could buy you a beer as a thank you for what you have done for me, i would!!!
Thank you so much for your positive feedback! I am very happy that the videos were helpful to you. Congratulations on successfully passing the Msc in Economics. Perhaps one day we meet and drink the beer :)
Thank you so much for posting it, professor Prettner. You are helping a lot of self-taught students like me with these precious lectures!
Thank you very much for your positive feedback that means a lot to me! I am very happy that the lectures are helpful!
Thank you Professor, excellent lessons.
Thank you for your positive feedback.
Thanks Professor. Your video is really helpful for understanding economics...
Thank you! I am glad that you find the video helpful!
Professor@@KlausPrettner. Could you make a video for AK Model of Growth (Endogenous growth model)? It would be great help for me...
Here is a link to the Playlist on the endogenous growth framework that also contains further extensions (such as the semi-endogenous growth model and a semi-endogenous growth model with endogenous human capital accumulation):
th-cam.com/play/PLHCd4G3qW92nPlJKqx-tcoOQ64jdOGkGk.html
Please note that the AK growth model is often used as a shortcut formulation of the Romer (1990) model of endogenous technological progress that is discussed in the first two videos of the playlist. However, as compared to the Romer (1990) model, it has several shortcomings (e.g., it leaves no room for technological progress in explaining long-run growth and it implies a capital income share of one). I hope this is useful.
Prof. thank you so much.
You are welcome and thank you for your interest!
Thank you sir for the video, it is really helpful. How can I make the OLG model for open economy? Can you make some video's regarding it.
Thank you! I am glad you find the video helpful!
For intertemporal models of open economies, I would recommend the freely available textbook of Schmitt-Grohe, Uribe, and Woodford, where the latest version I am aware of is available here: www.columbia.edu/~mu2166/UIM/suw.pdf.
Also the book by Obstfeld and Rogoff: Foundations of International Macroeconomics is a very good source although it is from the late 1990s.
thank you so much Prof. this is so helpful. mind sharing the ppt presentation?
I can send you the pdf file per email if you send me a short note
Thank you professor Klaus, your explanations are spectacular!. I have a question, please. In the 22:30 min (slide 10), why is the marginal productivity of capital sometimes equated with r_{t+1} and other times with r_{t}?.
For example, in your paper (with Ana Abeliansky): "Population Growth and Automation Density: Theory and Cross-Country Evidence", in the optimization firm problem, you consider R_{t+1}=marginal productivity of capital, but in others papers, it is R_{t}=marginal productivity of capital.
I get confused, since in my OLG model I consider that adult agents consume in t and save for old-age consumption in t+1: U = log (c_t) + \beta log (R_{t+1} s_ {t} ), but my question arises how to determine R_{t+1}. Is it determined in the marginal productivity of capital en time t or t+1?
Thank you very much!
Yes, this is mainly an issue of convention in notation. The standard way of proceeding is to assume that interest is paid at the end of the period and this is then denoted by r_{t+1} although the interest rate is determined in period t as the marginal product of the capital used in production at time t. I hope this helps!
Thank you very much professor@@KlausPrettner !!
What about OLG model with 3 time periods and with bequests?
Under very special assumptions, these OLG models with more than two periods can still be solved analytically. However, the standard approach in the OLG literature with more than two periods is to use numerical methods to simulate the models. The standard source for this method is the book "Dynamic Fiscal Policy" by Auerbach and Kotlikoff. If you assume perfect intergenrational altruism (full bequests), then the solution of the model would converge to the solution of the infinitely-lived representative agent model, i.e., the Ramsey-Cass-Koopmans model.