StevenLaura

Lances of Death: 0, Steven: 1

The first Mid-term matchup was held today, with challenger Lance of Death 1: Macroeconomics against the home contender Steven. In this closely fought match the Lance of Death started out with a poor showing, as Steven breezed through his explanation of how a positive shock to investment demand would effect Output, Labor, and Wages. Steven's math was flawless and his analysis sound. Lance of Death 1 almost gained an edge when it pulled out the question about the cyclical behavior of the real wage, but this blow was also dodged in the end with a safe but ambiguous answer.

Question 2 from Lance of Death 1 was also met by a strong performance by Steven, initially it looked as if a minor sign error on the part of the defender would give Lance of Death 1 an edge, but once the defender realized that the federal reserve would have to decrease the money supply in order to maintain the fixed exchange rate in the face of a rising foreign exchange rate, this question, too, was easily finished.

At this point in the game, Steven looked as if nothing could stop his dominant performance, and so the ever crafty Lance of Death 1 pulled out the dirtiest trick it could think of: it asked how output per worker, consumption and captial per worker would be affected by a decrease in the population growth rate according to a simple Solow model. The challenger must have known that Steven prefers to blindly memorize large amounts of information, and a question requiring real understanding like this would throw him for a loop, and indeed it was right. After a long and depressing time in which Steven produced no coherent thoughts, he was able to pull together an analytical answer and draw a set of appropriate graphs, knowing full well that this was a fight for as much partial credit as possible.

In the end, despite the devious twist pulled out in in question 3, Steven's strong performance on the first two questions guranteed him the P and the victory over Lance of Death 1.

Stay tuned for next weeks Mid-Term matchup: Lance of Death 2: Econometrics versus Steven.