14.04 - Intermediate Microeconomic Theory
14.04 Intermediate Microeconomic Theory (Fall 2020, MIT OCW). Instructor: Prof. Robert M. Townsend. This course provides an introduction to theory and data designed to meet the needs of students interested in economic science. It provides an introduction to consumer choice, the theory of the firm, and general equilibrium models, with an overview of the main results and tools used in studying these topics, both directly in economics and indirectly in various other fields. This includes analysis of consumer and producer decisions, partial and general equilibrium analysis, insurance, the welfare theorems and failures of these theorems as with externalities but with resolutions, contract theory and mechanism design, policy analysis, the content of theory for data, and the design of media of exchange as with Bitcoin and markets made possible by distributed ledgers. (from ocw.mit.edu)
| Lecture 09 - Risk Sharing with Production |
Instructor: Prof. Robert M. Townsend. In modern economies with financial markets, a good stock is one that hedges aggregate risk, having high return when the rest of the market does poorly, on average. A stock which in contrast co-moves with the market bears a risk premium, to compensate for its failure to hedge market risk. In Thai village economies, no stocks are traded, and yet amazingly, the returns on real capital assets, from running small business and farms, are consistent with the theory.
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