1. ©2016 Jennifer P. Wissink, all rights reserved.
The End Lecture 28
Dr. Jennifer P. Wissink
©2016 Jennifer P. Wissink, all rights reserved.
May 11, 2016 1

2. WISSINK Econ 1120 FINAL EXAM INFO & OTHER GRADING POLICY: Please see class syllabus (on our web page), Bb announcements and Bb FAQs. And all the best to everyone!
Final is cumulative but will stress material since prelim 2 a little more than all the other material.
See for Office Hours.
Final Exam is Tuesday May 17 from 2:00pm to 4:30pm in Barton West (the side nearer to the Statler and Uris). People w/extra time or quiet conditions will start at 2:00pm in Uris 262.
Make sure you bring your Cornell Student ID to the exam or some other picture ID.
Everyone will be individually checked in with the TA that Student Center has you attached to. PLEASE make sure you KNOW this information before you arrive at the final so you can get to the correct TA table to check in quickly.
When you check in you will get an index card. You should immediately find a seat and fill out the card. Place the completed card and your ID out in front of you. Everyone should sit only 2 to a table at either ends of the table.
Make sure to bring a simple calculator, a ruler and a couple/three pens & pencils.
For people taking the makeup on Monday May 23 at 9am: Report to Barton Hall and find me/Wissink and I will tell you what to do and where to sit. People w/extra time or quiet conditions taking the final on May 23 will start at 9am in Uris 262.
The format for the final will be similar to the prelims. Multiple Choice (and maybe a few just fill in the blank in the m.c. section). Then multi-part problems. The final is 2.5 hours long and usually students have plenty of time. I don't have any more finals to post. There is plenty of sample stuff already up there on the web site. Good to make sure you look at the "old school" traditional paper and pencil problem sets for the last 2 problem sets of those old semesters, since they will have "part 2" types of longer problems to solve. Don't forget to get to the exam location early and KNOW WHAT SECTION YOU ARE OFFICIALLY REGISTERED IN, so you can check in quickly at the correct TA's table. Make sure you bring a photo ID. Make sure you bring a simple calculator. I think that covers it for now... Thanks!

3. Interesting(entertaining, even) Listens/Reads
Guido Menzio, an Italian economist from the University of Pennsylvania
Ph.D.: Economics, Northwestern University, Evanston, IL, 2005
Dissertation: The Wage Policy of the Firm: Micro-foundations and Macro Implications
Committee Chairperson: Professor Dale T. Mortensen
Carlo Alberto Medal for Best Italian Economist Under 40, 2015
Ten ways to tell you might be sitting next to an economist
1. He refuses to listen to the safety announcement because "in the long run, we're all dead"
2. He keeps telling you that "there is no such thing" as a "complimentary refreshment service"
3. He avoids prolonged conversation with you because he has a "rational expectation" that you're an idiot since you chose the middle seat
4. But he offers to trade his aisle seat for yours in a competitive auction with the woman sitting behind you
5. He plonks his elbow on the arm rest because space has a "higher marginal utility" for him than for you
6. When he elbows you in the ribs, he says he is simply trying to "nudge" you into better behaviour
7. When he opens the overhead locker, a copy of Thomas Piketty's "Capital in the 21st century" falls out and hits you on the head
8. But then he uses the book as a footrest
9. He only relaxes when the plane reaches 35,000 feet because then it's in "general equilibrium"
10. Spends all the flight scribbling Greek letters into a notebook. Turns out it's not a series of equations; he's part of the IMF negotiating team en route to Athens
11. Adds an extra point to a "top 10 list" because he believes in "quantitative reasoning"

4. Interesting(entertaining, even) Listens/Reads
The Audacity of Hopelessness

5. Sources of Economic Growth: Technological Change & Progress
Embodied Technical Change
Technical change that results in an improvement in the quality of capital. (e.g., store cash registers then and now)
Disembodied Technical Change
Technical change that results in a change in the production process. (e.g., better organization of factory “floor”; market reforms)
Another Distinction
Invention: An advance in knowledge.
Innovation: The use of new knowledge to produce a new product or to produce an existing product more efficiently.
i>clicker question: Which one of the following would be classified as an invention?
In 1899 the Bayer Company marketed acetylsalicylic acid as a pain reliever in powder form under the name Aspirin.
In 1907 James Spangler combined an old fan motor, a soap box, a broom stick, and a pillow case into a device which was later acquired by William H. Hoover, president of the Hoover Company.
Beginning in the late 1950s, the field of nanoscience (or nanotechnology) emerged as scientists developed new techniques for the manipulation of materials billionths of a meter wide.
In 2001 Eddie Bauer and other retailers introduce stain and wrinkle resistant slacks using fabric developed by Greensboro, North Carolina based Nano-Tex, LLC. Attached to the fabric’s cotton fibers are molecular structures that create an invisible barrier that causes moisture and stains to bead on top of the fabric and prevent absorption.

6. What Causes Technological Progress? Many Say R&D
Research and Development as a Percent of GDP, 1999
The United States spends more total money than any other country on research and development.
However, when the spending is measured as a percentage of each nation’s GDP, Japan spends more.
A big part of U.S. spending on research and development is in defense-related areas.
SOURCE: National Science Foundation, National Patterns of R&D Resources, 2002, Washington D.C.

7. Can We Use Economic Analysis to Understand the Drivers of Growth in Different Countries?
China and India are the two most populous countries and have also grown very rapidly in recent years.
From 1978 to 2004, GDP in China grew at the rate of 9.3 percent per year.
From 1978 to 2004, GDP in India grew at a lower rate of 5.4 percent per year.
Economists Barry Bosworth from the Brookings Institution and Susan Collins from the University of Michigan used growth accounting to answer this question.
China’s rapid growth was caused by more rapid accumulation of physical capital and more rapid technological progress.
China invested much more in physical capital and was able to increase its technological progress at a more rapid rate.

8. Growth and the Environment and Issues of Sustainability
Huge looming questions.
Is there climate change?
What’s causing it?
plants or plants?
Who should do what about pollution?
need to consider both consumption and production.
What kinds of institutions and societal structures can be utilized?
Kyoto types of agreements?
In 1997, the conference in Kyoto, Japan was widely considered a breakthrough, producing an international treaty to limit emissions of greenhouse gases.
What will happen beyond Kyoto?
Paris…?
Are we running out of resources?
Oil?
Fresh Water?
Farmable Land?

9. Suppose an economy is represented by these equations:
C = Yd and Yd = Y-T
Id = 400
G = 1,000 and T = 1,000
EX = 400
IM = 0.1Yd
Yfull employment = $5,200
Assume the economy is on the flat/horizontal part of SR-AS.
Find Y* for this economy.
At Y*, what is the value of this economy’s current account in its balance of payments?
Assuming no money market, inflation or changes in the value of the dollar relative to other currencies…Find the value of the government multiplier.
What should the fiscal guys do to use “G” to get to full employment Y?
Without using any explicit numbers, how would introducing the money market alter Y*?
Without using any explicit numbers, how would introducing market based exchange rates alter Y*?

10. Suppose an economy is represented by these equations:
C = Yd and Yd = Y-T
Id = 400 and G = 1,000 and T = 1,000 and EX = 400 and IM = 0.1Yd
Yfull employment = $5,200 and the economy is on the flat/horizontal part of SR-AS.

11. Suppose an economy is represented by these equations:
C = Yd and Yd = Y-T
Id = 400 and G = 1,000 and T = 1,000 and EX = 400 and IM = 0.1Yd
Yfull employment = $5,200 and the economy is on the flat/horizontal part of SR-AS.

12. Suppose an economy is represented by these equations:
C = Yd and Yd = Y-T
Id = 400 and G = 1,000 and T = 1,000 and EX = 400 and IM = 0.1Yd
Yfull employment = $5,200 and the economy is on the flat/horizontal part of SR-AS.

13. The End - Amen Study hard. Use the class web pages – stay informed.
Work loads of problems.
Eat well.
Take a walk once in a while.
Get some sleep.
Don’t survive on
And last but not least....
Thanks to YOU ALL for a great semester!!
And thanks to the TAs for all their hard work.
Best of luck on all your finals. I am looking for good things from you all in our final!!