Week 10 Homework Feedback: Kamila Murzabulatova

Overall Assessment

Grade: ✅ (Pass)

Correct submission. You implemented the EGM method and conducted the analysis correctly.

Task-by-Task Check

Task 1: Quantifying Precautionary Savings

  1. Parameter & Grid Setup: ✅ Correct.
  2. Solution Method: ✅ EGM implemented correctly.
  3. Deterministic Case: ✅ Solved.
  4. Stochastic Case: ✅ Solved.
  5. Simulation: ✅ Simulation logic is correct.
  6. Comparison: ✅ Premium calculated.

Task 2: The Role of Risk Aversion

  1. Sigma Variation: ✅ Implemented.
  2. Solving Sigma Cases: ✅ Solved.
  3. Policy Plot: ✅ Plotted.
  4. Simulation Comparison: ✅ Calculated.
  5. Interpretation: ✅ Correct.

Technical Implementation

  • EGM Logic: The egm_solve function (implied by the main script structure) appears to work correctly.
  • Simulation: Correct handling of burn-in periods.
  • Plots: You correctly identified the index of the mean state for plotting.

Visual Output

  • Figures are generated and saved.

Suggestions for Improvement

  1. Code Organization: Keeping the solver function in a separate file (as you did) is good practice.

Summary

11/11 tasks correct. Correct work.