3. Rational Expectations

Notebook here. (keep all the files in the same folder)

Exercise 1. Solve the model in slide 5: "Example 2- A Financial Investment". What is the main message we get from its solution?

Exercise 2. Try to replicate the results in slides 13 and 14 but use the CPI index's logarithmic value instead of the CPI index value.

Readings: see information in slides' last section.