Commit ece13f0
Standardize notation: Use capitals for random variables in Job Search I-V (#704)
* Standardize notation: Use capitals for random variables in Job Search I-V
Updated notation in Job Search lectures I-V to use uppercase letters for
random variables and lowercase for realizations:
- Job Search I (mccall_model.md): w_t → W_t in wage offer sequences
- Job Search II (mccall_model_with_separation.md): w_t → W_t for wage offers
- Job Search III (mccall_model_with_sep_markov.md): (s_t, w_t) → (S_t, W_t)
for state variables
- Job Search IV (mccall_fitted_vfi.md): Already using correct notation
- Job Search V (mccall_persist_trans.md): w_t → W_t, z_t → Z_t, y_t → Y_t
for wage components
Lowercase notation remains for realizations in sums (e.g., sum_w v(w) q(w))
and for standard normal shocks (zeta_t, epsilon_t).
🤖 Generated with [Claude Code](https://claude.com/claude-code)
Co-Authored-By: Claude <noreply@anthropic.com>
* Clarify utility function notation to avoid confusion with unemployment compensation
Changed utility function parameter from 'c' to 'x' to distinguish between:
- The consumption argument of the utility function u(x)
- The unemployment compensation parameter c
This prevents confusion when we write expressions like u(c), where c is
the specific value of unemployment compensation being passed to the
utility function.
Updated in:
- Job Search II: def u(c, γ) → def u(x, γ)
- Job Search III: def u(c, γ) → def u(x, γ)
- Job Search IV: def u(c, γ) → def u(x, γ)
- Job Search V: u(c) = ln(c) → u(x) = ln(x)
🤖 Generated with [Claude Code](https://claude.com/claude-code)
Co-Authored-By: Claude <noreply@anthropic.com>
* Improve Job Search IV: Add explanations, simulation, and cross-sectional analysis
Major improvements to Job Search IV (Fitted Value Function Iteration):
1. Notation and clarity:
- Changed utility function from u(c, γ) to u(x, γ) to avoid confusion with
unemployment compensation parameter c
- Fixed random variable notation: w → W_t in model description
- Changed z_i → Z_i in Monte Carlo formula
- Updated Model constructor from named to positional arguments
- Renamed variables in T and get_greedy: accept → v_e, reject → continuation_values
- Standardized naming: h_star → h, w_star → w_bar
2. Added explanations:
- Explained the explicit form of (Pv_u)(w) with derivation
- Changed "From the equation above" to "Recall that we have"
- Added explanation before Bellman operator about Monte Carlo integration
3. Updated plot styling:
- Simplified plot to match Job Search III style
- Show only continuation value h and employment value v_e
- Updated labels and explanation text
4. Added Simulation section:
- Implemented update_agent function with job separation logic
- Added simulate_employment_path function
- Created three-panel plot showing employment status, wage path, and
cumulative unemployment rate
- Properly handles Markov wage dynamics with separation
5. Added Cross-Sectional Analysis subsection:
- Vectorized update function for parallel agent simulation
- JIT-compiled simulation using lax.fori_loop
- Cross-sectional unemployment histogram
- Comparison of time-average vs cross-sectional unemployment rates
6. Added missing import: from functools import partial
🤖 Generated with [Claude Code](https://claude.com/claude-code)
Co-Authored-By: Claude <noreply@anthropic.com>
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Co-authored-by: Claude <noreply@anthropic.com>1 parent f572fcf commit ece13f0
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