Questions and answers of relevance for the exam December 19, 2016
Course: Advanced Macroeconomics

General remark: From what I write below nothing can be inferred about the particular contents of the exam assignments. My answers are written from the perspective of the matter in principle.   

What is important in the sense of being relevant for the exam?

 

Answer:
The exam is a test of your:
(a) understanding of the basic concepts, models, and methods in the course;
(b) ability to apply these models and related mathematical tools in providing precise answers to economic questions;

(c) knowledge of major empirical regularities underlined in the course.

    The course plan describes the structure of the theoretical stuff and contains many key terms. From Lecture Notes in Macroeconomics only chapters or chapter sections appearing in the course plan are part of syllabus. The exercises you have been through are examples, both in style and contents, of what you may meet at the exam. The exercises have been centred around some of the key issues,  methods, and concepts. On the other hand, the exercises do not cover everything of relevance for the exam, but the syllabus does, of course. 

    At the exam there will be analytical problems that involve formal derivation of answers to economic questions, often together with interpretation of the results. In addition there will be some questions that can be answered in a purely verbal way.
 

Questions received and my answers (deadline for questions is Saturday 17/12 2016 at 8:00 a.m.):

Question 1. I din "Special note 4" om IS-MP modellen definerer du Taylor reglen som følgende:
Billede indsat i tekst 1

Hvorfor og hvordan kan du bare set bort fra y* og pi hat?

So the question is: In Lecture Note 4, p. 6: Why and how can you just ignore y* and pi hat in the last part of (MP)?

Answer: The answer is that they are not ignored but included in the constant alpha_0. The identity sign indicates that the constant alpha_0 must equal i_t - (alpha_1*y_t + alpha_2*pi_t^e).
So alpha_0 = i hat - alpha_1*y* - alpha_2*pi hat.
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Only the above question was received.