Problem Sets:

Problem Set 1 (Due Friday, September 8)
Problem Set 2 (Due Wednesday, September 13)
Problem Set 3 (Due Wednesday, September 13)
Problem Set 4 (Due Monday, September 18)
Problem Set 5 (Due Friday, September 22)
Problem Set 6 (Due Wednesday, September 27)
Problem Set 7 (Due Friday, October 13)
Problem Set 8 (Due Friday, October 27)
Problem Set 9 (Due Wednesday, November 1)
Problem Set 10 (Due Monday, November 13)
Problem Set 11 (Due Monday, November 27)
Problem Set 12 (Due Monday, November 27)
Problem Set 13 (Due 4 pm, Thursday, December 7)

Note: You are welcome to hand in Problem Set 13 earlier than the deadline. In any case, please hand it in to the mailbox of the TA, on the 4th floor of Uris Hall.

Lecture Notes:

Lecture Notes 1 (Wednesday, August 30)
Lecture Notes 2 (Wednesday, September 6)

First Midterm Quiz:

Monday, October 2
8:40 am to 9:55 am
Goldwin Smith Hall, Kaufmann Auditorium

Second Midterm Quiz:

Monday, November 20
8:40 am to 9:55 am
Goldwin Smith Hall, Kaufmann Auditorium

Final Exam:

Wednesday, December 13
2:00 pm to 4:30 pm
Goldwin Smith Hall, Kaufmann Auditorium

Note: The final exam is designed to be finished in 120 minutes, however students will be given the full 150 minutes to work on it.

Reading List

A. Production

R. M. Solow, "A Contribution to the Theory of Economic Growth", Quarterly Journal of Economics, February 1956, 70(1): 65-94. (skim paper)

H. Uzawa, "On a Two-Sector Model of Economic Growth II," Review of Economic Studies, Vol June 1963, 30(2): 105-118. (read p. 105-110 only)

K. Shell, "Applications of Pontryagin's Maximum Principle to Economics" in Mathematical Systems Theory and Economics, I (H. W. Kuhn and G. P. Szegö, eds.), Berlin: Springer Verlag, 1969, 241-292. (The "Varenna Lectures"; read p. 257-260 only)

B. Introduction to Economic Growth

R. M. Solow, "A Contribution to the Theory of Economic Growth", Quarterly Journal of Economics, February 1956, 70(1): 65-94.

H. Uzawa, "On a Two-Sector Model of Economic Growth II," Review of Economic Studies, June 1963, 30(2): 105-118.

D. Cass, "Optimum Growth in an Aggregative Model of Capital Accumulation," Review of Economic Studies, July 1965, 32(3): 233-240.

C. Money

W. Baumol, "The Transactions Demand for Cash: an Inventory Theoretic Approach," Quarterly Journal of Economics, November 1952, 66(4): 545-556.

Y. Balasko and K. Shell, "Lump-Sum Taxation: The Static Economy," in General Equilibrium, Growth, and Trade: The Legacy of Lionel McKenzie, II. (R. Becker, M. Boldrin, R. Jones and W. Thomson, eds.) New York: Academic Press, 1993, 168-180.

D. Overlapping Generations

Paul A. Samuelson, "An Exact Consumption-Loan Model of Interest with or without the Social Contrivance of Money," Journal of Political Economy, December 1958, 66(6): 467-482.

K. Shell, "Notes on the Economics of Infinity," Journal of Political Economy, September/October 1971, 79(5): 1002-1011.

K. Shell and B. Smith, "Overlapping-Generations Model and Monetary Economics," in the New Palgrave Dictionary of Money and Finance (J. Eatwell, M. Milgate, and P. Newman, eds.), Vol. 3, London: Macmillan, 1992, 104-109.

P. Diamond, "National Debt in a Neoclassical Growth Model", American Economic Review, December 1965, 55(5): 1126-1150.

D. Gale, "Pure Exchange Equilibrium of Dynamic Economic Models," Journal of Economic Theory, February 1973, 6(1): 12-36.

D. Cass, M. Okuno and I. Zilcha. “The Role of Money in Supporting the Pareto Optimality of Competitive Equilibrium in Consumption-Loan Type Models.” Journal of Economic Theory, February 1979, 20(1): 41-80.  Reprinted in Models of Monetary Economics, J.H. Kareken and N. Wallace, eds., Federal Reserve Bank of Minneapolis, 1980.

D. Cass and K. Shell, "In Defense of a Basic Approach," in Models of Monetary Economics, (J. Kareken and N. Wallace, eds.) Federal Reserve Bank of Minneapolis, 1980, 251-260.

E. More on Economic Growth

K. Shell, "Toward a Theory of Inventive Activity and Capital Accumulation," American Economic Review, May 1966, 56(1/2): 62-68.

K. Shell, "Inventive Activity, Industrial Organization and Economic Growth," in Models of Economic Growth, (J. Mirrlees and N. Stern) Macmillan and Halsted, 1973, 77-100

P. Romer, "Increasing Returns and Long-Run Growth," Journal of Political Economy, October 1986, 94(5): 1002-1037.

P. Romer, "Endogenous Technological Change," Journal of Political Economy, October 1990, 98(5): S71-S102

F. Extrinsic Uncertainty

R. Shiller, "Do Stock Prices Move Too Much to be Justified by Subsequent Changes in Dividends?," American Economic Review, June 1981, 71(3): 421-436.

K. Shell, "Sunspot Equilibrium," in The New Palgrave: A Dictionary of Economics (J. Eatwell, M. Milgate, and P. Newman, eds.), Vol. 4, New York: Macmillan, 1987, 549-551.

K. Shell and B. Smith, "Sunspot Equilibrium", in the New Palgrave Dictionary of Money and Finance (J. Eatwell, M. Milgate, and P. Newman, eds.), Vol. 3, London: Macmillan, 601-605.

C. Azariadis, "Self-Fulfilling Prophecies," Journal of Economic Theory, December 1981, 25(3): 380-396.

K. Shell, "Monnaie et Allocation Intertemporelle," [title and abstract in French, text in English] mimeo, Séminaire d'Econométrie Roy-Malinvaud, Centre National de la Recherche Scientifique, Paris, November 21, 1977. (Forthcoming in Macroeconomic Dynamics.)

D. Cass and K. Shell, "Do Sunspots Matter?" Journal of Political Economy, April 1983, 91(2): 193-227.

K. Shell and R. Wright, "Indivisibilities, Lotteries and Sunspot Equilibria," Economic Theory, January 1993, 3(1): 1-17.

J. Bhattacharya, M. Guzman and K. Shell, "Price level volatility: a simple model of money taxes and sunspots", in Journal of Economic Theory, August 1998, 81(2): 401-430.