Questions tagged [business-cycles]

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8
votes
1answer
12k views

No Ponzi game condition and transversality condition are the same?

Given the following non-stochastic planning problem with finite horizon, \begin{align} &\max_{\{k_{t+1}\}}\sum^T_{t=0}\beta^tU[f(k_t-k_{t+1})] \\ \text{s.t. } & 0\leq k_{t+1}\leq f(k_t)\\ &...
10
votes
2answers
960 views

Simulating Real Business Cycle

Basically I need to replicate Hartley's 'A User's Guide to Solving Real Business Cycle Models' (http://www.econ.ucdavis.edu/faculty/kdsalyer/LECTURES/Ecn235a/Linearization/ugfinal.pdf). Specifically, ...
1
vote
1answer
761 views

Am I correct that cyclical unemployment can be negative?

Let's start with stating and emphasizing some truths that we will need later. Overall unemployment rate=Frictional unemployment + Structural unemployment + Cyclical unemployment. Also, Natural rate of ...