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Lesson 3 of 25

Computing Equilibrium

Our understanding of the economy will be more tangible and vivid if we can in principle explain all the economic decisions of every agent in the economy. This lecture demonstrates, with two examples, how the theory lets us calculate equilibrium prices and allocations in a simple economy, either by hand or using a computer. In future lectures we shall extend this method so as to compute equilibrium in financial economies with stocks and bonds and other financial assets.

Source: Open Yale Courses

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Utilities, Endowments, and Equilibrium

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Efficiency, Assets, and Time

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Financial Theory - Video Series

25 lessons

Lessons

1
Why Finance?
2
Utilities, Endowments, and Equilibrium
3
Computing Equilibrium
4
Efficiency, Assets, and Time
5
Present Value Prices and the Real Rate of Interest
6
Irving Fisher's Impatience Theory of Interest
7
Shakespeare's Merchant of Venice and Collateral, Present Value and the Vocabulary of Finance
8
How a Long-Lived Institution Figures an Annual Budget Yield
9
Yield Curve Arbitrage
10
Dynamic Present Value
11
Financial Implications of US Social Security System
12
Overlapping Generations Models of the Economy
13
Will the Stock Market Decline when the Baby Boomers Retire?
14
Quantifying Uncertainty and Risk
15
Uncertainty and the Rational Expectations Hypothesis
16
Backward Induction and Optimal Stopping Times
17
Callable Bonds and the Mortgage Prepayment Option
18
Modeling Mortgage Prepayments and Valuing Mortgages
19
Dynamic Hedging
20
Dynamic Hedging and Average Life
21
Risk Aversion and CAPM
22
The Mutual Fund Theorem and Covariance Pricing Theorems
23
Risk, Return, and Social Security
24
Leverage Cycle and the Subprime Mortgage Crisis
25
Shadow Banking: Parallel and Growing?
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