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Corrections to supply_demand_multiple_goods.md and
supply_demand_heterogeneity.md:
* fix the sign and restore the missing mu in the matrix of demand curve
slopes, which is -mu (Pi' Pi)^{-1}
* separate Frisch from Hicksian demand curves; holding mu fixed gives a
Frisch demand curve, and the claim that freezing mu leaves p'e + w
unaltered was false
* restrict the monopoly output comparison to the single good case, since
with several goods cross effects can raise one good's output
* correct the two good cross slope explanation; preference substitution
rather than the shift in the demand intercept drives the larger fall
in the second quantity
* label the consumption vector correctly in the risk section
* write h' c rather than h c in the welfare criterion
* replace a cross document equation reference that could not resolve
* state the budget constraint p'(c_i - e_i) = W_i that defines mu_i
* fix two code bugs: Ws is None, and np.isclose for the wealth sum
New material:
* derive welfare criterion = CS + PS - b'b/(2 mu), which ties the
planning problem to the surplus measure of intro_supply_demand
* add a section on Negishi weights: a competitive equilibrium allocation
solves a planning problem with welfare weights 1/mu_i and eta = p
* add seven exercises with dropdown solutions, and supply solutions for
the four exercises that had none
* connect the lectures to cons_smooth, where beta R = 1 is assumed and
here derived, and to pv, olg, lp_intro and linear_equations
* add concluding remarks to both lectures
cons_smooth.md gains a forward pointer recording that it takes R as
given while supply_demand_multiple_goods determines R.
All code cells execute and every number reported in the text is verified.
Co-Authored-By: Claude Opus 5 (1M context) <noreply@anthropic.com>
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Revisions by @thomassargent30 to
supply_demand_multiple_goods.md,supply_demand_heterogeneity.md, and a small forward pointer incons_smooth.md(branchtom_sept, see Tom's email "tom_sept branch(es)").Corrections
Ws is None, andnp.isclosefor the wealth sum.New material
intro_supply_demand.cons_smooth(wherepv,olg,lp_introandlinear_equations.cons_smooth.mdgains a forward pointer noting that it takessupply_demand_multiple_goodsdeterminesPer the commit message, all code cells execute and every number reported in the text has been verified.
🤖 Generated with Claude Code
https://claude.ai/code/session_01UZWhdWQnrKdbgHbyvX4UYs