🌍 Week 4 Homework — Feedback

Student: Klea Lushaj
Assignment: Extended IS–LM and Cholesky Decomposition

✅ Overall Assessment

Result: ⚠️ Less than 50% Correct

The student demonstrates basic code organization but implements a completely different model with non-standard parameters and incorrect matrix construction. The approach shows understanding of matrix algebra but fundamentally misunderstands the assignment requirements. The Cholesky decomposition is implemented but with wrong parameters and insufficient simulation size.

🔍 Task-by-Task Check

Task	Description	Status	Notes
1	Parameter setup & system definition	❌	Wrong Parameters: Uses non-standard names (a, b, c, d) instead of required (Abar, bG, alpha, beta, gamma, theta, G, MP). Wrong A matrix `[1 -b; -d 1]`.
2	Equilibrium solution	⚠️	Solves system correctly using `A\B`, extracts Y_eq and r_eq correctly, but based on wrong system.
3	Comparative statics setup	✅	Correctly creates G grid using `10:10:100`, loops through values, and stores results in Y_eq_vec and r_eq_vec arrays.
4	Plotting comparative statics	✅	Creates proper plot with both Y and r on same axes, good styling with markers, proper labels, and legend. No figure saving in code.
5	Cholesky decomposition	❌	Wrong Sigma: Uses `[25 10; 10 16]` instead of `[4, 1.2; 1.2, 3]`. Computes L correctly using `chol(Sigma, 'lower')`.
6	Stochastic simulation setup	❌	Insufficient Size: Uses only 5 simulations instead of 10000. Correctly generates shocks and transforms to correlated shocks.
7	Equilibrium distribution analysis	❌	Insufficient Analysis: No statistical analysis of results, only displays individual simulation outcomes.
8	Visualization of stochastic results	❌	Missing: No scatter plot or visualization of stochastic results.

📈 Technical Implementation

Wrong Parameters: Uses non-standard parameter names (a, b, c, d) instead of required economic parameters
Wrong A Matrix: [1 -b; -d 1] instead of [1, alpha; -beta, gamma]
Wrong Sigma Matrix: Uses [25 10; 10 16] instead of [4, 1.2; 1.2, 3]
Code Structure: Basic organization with clear sections
Numerical Methods: Uses correct A\B method
G Grid: Uses 10:10:100 which is reasonable
Figure Management: Missing saveas() commands in code
Simulation Size: Uses only 5 simulations instead of 10000 (severely insufficient)
Missing Analysis: No statistical analysis of simulation results

💬 Style & Clarity

Code Quality: Basic structure with clear section headers
Variable Naming: Non-standard names (a, b, c, d, Y_eq, r_eq)
Comments: Basic comments explaining each section
Output: Good use of disp and fprintf for displaying results
Organization: Clear separation into logical sections
Documentation: Minimal documentation of economic theory

📊 Visual Output Assessment

Please remember to save the figures in the Figures folder!

Figure 1: Comparative Statics ⚠️

Layout: Single plot with both Y and r on same axes
Relationships: Shows relationships, but based on wrong system
Labels: Proper axis labels and title
Styling: Good styling with different markers (o and s) and legend
Saving: No figure saving in code
Issue: Wrong underlying system due to incorrect parameters

Missing: Stochastic Visualization ❌

No scatter plot or visualization of stochastic results
No statistical analysis of simulation outcomes
Insufficient simulation size (only 5 simulations)

✅ Suggestions for Improvement

Critical: Use correct parameter names (Abar, bG, alpha, beta, gamma, theta, G, MP)
Critical: Use correct A matrix [1, alpha; -beta, gamma]
Critical: Use correct Sigma matrix [4, 1.2; 1.2, 3]
Critical: Use sufficient simulation size (10000 instead of 5)
Important: Add statistical analysis of simulation results
Important: Add scatter plot visualization of stochastic results
Important: Add saveas() commands to save figures automatically
Style: Consider using subplots for comparative statics to match solution format

🎯 Summary

Incorrect implementation with fundamental misunderstanding of assignment requirements. The student demonstrates basic programming skills but uses completely wrong parameters and insufficient simulation size. The approach shows understanding of matrix algebra but fails to implement the required IS-LM model correctly.

Grade Level: Less than 50% Correct (2/8 tasks fully correct, 2/8 partially correct, 4/8 incorrect)