Tom's July 23 edits of some lectures and bib file

Author: thomassargent30

lectures/_static/quant-econ.bib

@@ -3,6 +3,14 @@
 Note: Extended Information (like abstracts, doi, url's etc.) can be found in quant-econ-extendedinfo.bib file in _static/
 ###
 
+
+@book{russell2004history,
+  title={History of western philosophy},
+  author={Russell, Bertrand},
+  year={2004},
+  publisher={Routledge}
+}
+
 @article{north1989,
   title={Constitutions and commitment: the evolution of institutions governing public choice in seventeenth-century England},
   author={North, Douglass C and Weingast, Barry R},

lectures/french_rev.md

@@ -16,21 +16,20 @@ kernelspec:
 
 ## Overview 
 
-This lecture describes some monetary and fiscal  features of the French Revolution (1789-1799)
-described by {cite}`sargent_velde1995`.
+This lecture describes some  of the monetary and fiscal  features of the French Revolution (1789-1799) described by {cite}`sargent_velde1995`.
 
 To finance public expenditures and service its debts, 
-the French government embarked on several distinct  policy experiments.
+the French government embarked on   policy experiments.
 
 The authors of these experiments  had in mind theories about how government  monetary and fiscal policies affected economic outcomes.
 
 Some of those theories about monetary and fiscal policies still interest us today.
 
-* a *tax-smoothing* model like Robert Barro's {cite}`Barro1979`
+* a **tax-smoothing** model like Robert Barro's {cite}`Barro1979`
 
    * this normative (i.e., prescriptive model) advises a government to finance temporary war-time surges in expenditures mostly by issuing government debt, raising taxes by just enough to service the additional debt issued during the wary; then,   after the war,  to roll over whatever debt the government had accumulated during the war;  and  to increase taxes after the war permanently by just enough to finance interest payments on that post-war government  debt
 
-*  *unpleasant monetarist arithmetic* like that described in this quanteon lecture  {doc}`unpleasant`
+*  **unpleasant monetarist arithmetic** like that described in this quanteon lecture  {doc}`unpleasant`
 
     * mathematics involving compound interest  governed French government debt dynamics in the decades preceding 1789; according to leading historians, that arithmetic set the stage for the French Revolution 
 
@@ -45,11 +44,11 @@ Some of those theories about monetary and fiscal policies still interest us toda
 
     * Napoleon Bonaparte became head of the French government in 1799. He  used this theory to guide his monetary and fiscal policies
 
-* a classical inflation-tax theory of inflation in which Philip Cagan's ({cite}`Cagan`) demand for money studied in this lecture  {doc}`cagan_ree` is a key component
+* a classical **inflation-tax** theory of inflation in which Philip Cagan's ({cite}`Cagan`) demand for money studied in this lecture  {doc}`cagan_ree` is a key component
 
    * This theory helps  explain French price level and money supply data from 1794 to 1797  
 
-* a *legal restrictions*  or *financial repression* theory of the demand for real balances 
+* a **legal restrictions**  or **financial repression** theory of the demand for real balances 
 
     * the Twelve Members comprising the Committee of Public Safety who adminstered the Terror from June 1793 to July 1794 used this theory to shape their monetary policy 
 
@@ -418,8 +417,8 @@ They wanted to honor government debts -- interests of French government creditor
 
 But they set out to remake  the French tax code and the administrative machinery for collecting taxes.
 
-  * they abolished all sorts of taxes
-  * they abolished the Ancient Regimes scheme for ''tax farming''
+  * they abolished many taxes
+  * they abolished the Ancient Regimes scheme for ``tax farming``
       * tax farming meant that the government had privatized tax collection by hiring private citizes -- so called  tax farmers to collect taxes, while retaining a fraction of them as payment for their services
       * the great chemist Lavoisier was also a tax farmer, one of the reasons that the Committee for Public Safety sent him to the guillotine in 1794
 
@@ -974,5 +973,24 @@ plt.tight_layout()
 plt.show()
 ```
 
-{numref}`fr_fig104e` shows the results of regressing  real balances on inflation during the
+{numref}`fr_fig104e` shows the results of regressing  real money balances on inflation during the
 period of the hyperinflation.
+
+## Hyperinflation Ends
+
+{cite}`sargent_velde1995` tell how in 1797 the Revolutionary government abruptly ended the inflation by 
+
+  * repudiating 2/3 of the national debt, and thereby
+  * eliminating the net-of-interest government defict
+  * no longer printing money, but instead
+  * using gold and silver coins as money
+
+In 1799, Napoleon Bonaparte became first consul and for the next 15 years used resources confiscated from conquered territories to help pay for French government expenditures.
+
+## Underlying Theories
+
+This lecture  sets the stage for studying  theories of inflation and the  government monetary and fiscal policies that bring it about.
+
+A  ``monetarist theory of the price level`` is described in this quantecon lecture {doc}`cagan_ree`.
+
+That lecture sets the stage for these quantecon lectures {doc}`money_inflation` and {doc}`unpleasant`.  

lectures/greek_square.md

@@ -17,7 +17,17 @@ kernelspec:
 ## Introduction
 
 
-This lecture can be viewed as a sequel to {doc}`eigen_I`.
+
+Chapter 24 of {cite}`russell2004history` about early Greek mathematics and astronomy contains this
+fascinating passage:
+
+ ```{note} 
+ The square root of 2, which was the first irrational to be discovered, was known to the early Pythagoreans, and ingenious methods of approximating to its value were discovered. The best was as follows: Form two columns of numbers, which we will call the $a$'s and the $b$'s; each starts with a $1$. The next $a$, at each stage, is formed by adding the last $a$ and the $b$ already obtained; the next $b$ is formed by adding twice the previous $a$ to the previous $b$. The first 6 pairs so obtained are $(1,1), (2,3), (5,7), (12,17), (29,41), (70,99)$. In each pair, $2 a - b$ is $1$ or $-1$. Thus $b/a$ is nearly the square root of two, and at each fresh step it gets nearer. For instance, the reader may satisy himself that the square of $99/70$ is very nearly equal to $2$.
+ ```
+
+This lecture drills down and studies this ancient method for computing square roots by using some of the matrix algebra that we've learned in earlier quantecon lectures. 
+
+In particular, this lecture can be viewed as a sequel to {doc}`eigen_I`.
 
 It  provides an  example of how eigenvectors isolate  *invariant subspaces* that help construct and analyze solutions of linear difference equations. 
 
@@ -715,3 +725,27 @@ All of these exploit very similar equations based on eigen decompositions.
 
 We shall encounter equations very similar to {eq}`eq:deactivate1` and {eq}`eq:deactivate2`
 in {doc}`money_inflation` and in many other places in dynamic economic theory.
+
+
+
+```{exercise-start} 
+:label: greek_square_ex_a
+```
+Please use matrix algebra to formulate the method described by Bertrand Russell at the beginning of this lecture.  
+
+1.  Define a state vector $x_t = \begin{bmatrix} a_t \cr b_t \end{bmatrix}$.
+2.  Formulate a first-order vector difference equation for $x_t$ of the form $x_{t+1} = A x_t$ and
+compute the matrix $A$.
+3.  Use the system $x_{t+1} = A x_t$ to replicate the sequence of $a_t$'s and $b_t$'s described by Bertrand Russell.
+4.  Compute the eigenvectors and eigenvalues of $A$ and compare them to corresponding objects computed in the text of this lecture. 
+
+```{exercise-end} 
+```
+
+```{solution-start} greek_square_ex_a
+:class: dropdown
+```
+Here is the answer
+
+```{solution-end}
+```

lectures/inflation_history.md

@@ -131,6 +131,10 @@ By staring at {numref}`lrpl` carefully, you might be able to guess when these te
 
 During these episodes, the gold/silver standard was temporarily abandoned when a government printed paper money to pay for war expenditures.
 
+```{note}
+This quantecon lecture {doc}`french_rev` describes circumstances leading up to and during the big inflation that occurred during the French Revolution.
+```
+
 Despite these temporary lapses, a striking thing about the figure is that price levels were roughly constant over three centuries.  
 
 In the early century, two other features of this data attracted the attention of [Irving Fisher](https://en.wikipedia.org/wiki/Irving_Fisher) of Yale University and [John Maynard Keynes](https://en.wikipedia.org/wiki/John_Maynard_Keynes) of Cambridge University.
@@ -665,6 +669,6 @@ Chapter 3 of {cite}`sargent2002big`  described deliberate changes in policy that
 
 Each government stopped printing money to pay for goods and services once again and made its currency convertible to the US dollar or the UK pound.
 
-The story told in {cite}`sargent2002big` is grounded in a "monetarist theory of the price level" described in {doc}`cagan_ree` and {doc}`cagan_adaptive`.
+The story told in {cite}`sargent2002big` is grounded in a ``monetarist theory of the price level`` described in {doc}`cagan_ree` and {doc}`cagan_adaptive`.
 
 Those lectures discuss theories about what owners of those rapidly depreciating currencies were thinking and how their beliefs shaped responses of inflation to government monetary and fiscal policies.