🌍 Week 4 Homework — Feedback

Student: Davide Magnini
Assignment: Extended IS–LM and Cholesky Decomposition

✅ Overall Assessment

Result: ⚠️ Partial <50% Correct

The student’s submission contains multiple critical errors that prevent correct economic interpretation. The matrix construction is fundamentally wrong, the stochastic simulation uses incorrect shock dimensions, and the code lacks proper structure and documentation. While some basic components are present, the implementation is not economically meaningful. Remember to submit a file with a proper naming convention that runs! —

🔍 Task-by-Task Check

Task Description Status Notes
1 Parameter setup & system definition ❌ Critical Error: A matrix is [1, 0.5; 0.25, -1.2] instead of [1, alpha; -beta, gamma]. Uses hardcoded values instead of parameters. b vector is [120+0.8*100; 80-0.1*100] instead of proper construction.
2 Equilibrium solution ⚠️ Solves system correctly given the wrong matrices, but results are economically meaningless (negative interest rates).
3 Comparative statics setup ⚠️ Creates G grid (0:100:1000) but uses wrong range and wrong system matrices throughout.
4 Plotting comparative statics ⚠️ Creates proper subplots for Y vs G and i vs G, but shows wrong relationships due to matrix errors. No figure saving in code.
5 Cholesky decomposition ✅ Correctly defines Sigma matrix, computes eigenvalues, and computes L using chol(Sigma, 'lower').
6 Stochastic simulation setup ❌ Critical Error: Uses randn(1, N) instead of randn(2, N). Generates 1D shocks instead of 2D shocks. Wrong shock application.
7 Equilibrium distribution analysis ⚠️ Computes variances and covariance, but based on wrong shock generation and wrong underlying system.
8 Visualization of stochastic results ⚠️ Creates scatter plot, but based on incorrect shock generation and wrong system. No figure saving in code.

📈 Technical Implementation

  • Critical Matrix Errors:
    • A matrix: [1, 0.5; 0.25, -1.2] should be [1, alpha; -beta, gamma] with proper parameters
    • b vector: Hardcoded [120+0.8*100; 80-0.1*100] instead of proper parameter-based construction
  • Critical Shock Error: Uses randn(1, N) instead of randn(2, N) for 2D shocks
  • Code Structure: Very minimal with no comments, no parameter definitions, poor organization
  • G Grid: Uses 0:100:1000 which is economically unreasonable range
  • Figure Management: Missing saveas() commands in code
  • Variable Naming: Poor naming (sigma instead of Sigma, U instead of proper shock names)

💬 Style & Clarity

  • Code Quality: Very poor structure with minimal comments and no organization
  • Variable Naming: Inconsistent naming and hardcoded values
  • Comments: Almost no comments explaining the economic theory
  • Output: Minimal output with no clear formatting
  • Organization: No clear sections or structure

📊 Visual Output Assessment

Please remember to save the figures in the Figures folder!

Figure 1: week4.png ❌

  • Layout: Two subplots stacked vertically
  • Relationships: Shows relationships, but interest rates are negative (economically wrong)
  • Labels: Basic labels in Italian
  • Styling: Minimal styling
  • Issues: Wrong relationships due to matrix errors, no figure saving in code

✅ Suggestions for Improvement

  1. Critical: Define all parameters properly at the beginning of the code
  2. Critical: Fix A matrix to use parameters: [1, alpha; -beta, gamma]
  3. Critical: Fix b vector to use parameters: [Abar + bG*G; MP - theta*G]
  4. Critical: Fix shock generation to use randn(2, N) for 2D shocks
  5. Important: Add proper comments explaining the economic theory
  6. Important: Add saveas() commands to save figures automatically
  7. Style: Use economically reasonable G range (e.g., 80:2:120)
  8. Organization: Add clear section headers and proper code structure

🎯 Summary

Incorrect submission with multiple critical errors. The student demonstrates minimal understanding of the assignment requirements. The matrix construction is fundamentally wrong, shock generation is incorrect, and the code lacks proper structure and documentation. The submission does not meet the basic requirements for economic interpretation.

Grade Level: ⚠️ Partial <50% Correct (1/8 tasks fully correct, 3/8 partially correct, 4/8 incorrect)