Department of Economics New York University DOUGLAS GALE G31.1023
Microeconomic Theory I
(2)General
equilibrium Fall 2007
Instructor: Douglas Gale <douglas.gale@nyu.edu> 19 West 4th Street, 812 Office hours: Monday and Wednesday 11:00 - 12:00 TA: Ryan Booth <rwb262@nyu.edu> 19 West 4th Street, 618 Office hours: Monday 4:30 - 6:30 Lab: Tuesday 3:30 - 5: 30 in KMEC 5-75 Final examination: Wednesday December 19 Outline Review: Optimization theory Lecture 0 Problem set 0 Solution to Question #1, Problem set 0 Classical theorems of welfare economics - Exchange economies
- Competitive equilibrium
- First theorem: efficiency of
competitive equilibrium
- Second theorem:
decentralization of efficient allocations
- Extensions
Lecture 1 Problem Set 1 Assignment due October 30: Question 1, Problem Set 1 Assignment due November 6: Question 8, Problem Set 1 Solutions to Questions 1, 5, and 8, Problem Set 1. Uncertainty - Contingent commodities
- Arrow securities and sequential trade
- Arbitrage pricing
- Option pricing: the binomial
model
- Incomplete asset markets
Lecture 2 Assignment due November 27: Question 7, Problem Set 2 Economies with production- The classical welfare theorems for production economies
- Linear production models
- The 2x2 production model
- Convexifying effect of large numbers
Lecture 3 Problem Set 3 Assignment due December 4: Question 5, Problem Set 3 Solution to Question 5, from Problem Set 3 Dynamic economies - Intertemporal efficiency
- The representative consumer model
- The overlapping generations model
- Linear growth models
Lecture 4 Economies with transferable utility - Maximum surplus and cost-benefit analysis
- Externalities
- Imperfect competition
- Groves-Clarke mechanisms
- Cournot-Shubik market games
- Matching and bargaining games
Osborne and Rubinstein, Bargaining and Markets, Chapter 8, pp.156-166. Lecture 5 Structure of equilibria - Existence
- Local uniqueness and comparative statics
- Regular economies, genericity
- Comparative statics
Lecture 6 Final examination: KMEC 5-75, 9:30 - 11:30 AM Examinations Solution for final exam 2003 Final exam 2004 Solution for final exam 2005 Final exam 2006 Final exam solution 2006 Final exam solution 2007 |