This is the final presentation for Duke Kunshan University's Intermediate Macroeconomics course.

1. ECON204:
Ke’er Ren
kr229
Final Presentation
Intermediate
Macroeconomics

2. Email: kr229@duke.edu
WeChat: rke1191912824
Phone: 18609665920
Linkedin: linkedin.com/in/ke-er-ren-
883129175
Self Introduction
Ke'er Ren is currently a junior student
majoring in political economy with
economics track at Duke Kunshan
University. She has choose courses related
not only to her major, but also other
disciplines. She has a strong interest in
behavior economics and education.
In addition to the academic life, she also
has great passion in sports. She began to
learn softball and squash after entering
DKU and is now one of the co-founders of
DKU Softball Club. In addition, she likes
dancing and she had performed many
dances with other members in DKU Street
Dance Club. Besides, she is also devoted to
student work at DKU. In the sophomore
year, she was the general secretary of the
Student Ambassador Committee and
helped with the work in Office of China
Enrollment Management. Right now she is a
student work in Student Affairs Office and
helps with all kinds of student activities on
campus.

3. Dedicated to Professor Luyao Zhang
for her patience and
encouragements during this course,
for her great attitude in supporting
my challenges,
for teaching me a lot about
macroeconomics.
Dedication and Acknowledgments
Dedication Acknowledgments
Special thanks to CEO Robert
Lauko
for his excellent sharing about his
company.
Special thanks to William Zhao
for his wonderful presentation in
explaining business models of
Liquity.
Special thanks to Yulin Liu
for giving a masterly lecture on
macroeconomic concepts.
Special thanks to my classmates
for all their help during the whole
class.

4. A complete course Lucid Chart Diagram
Rational Expectation
Theory

5. TABLE OF
CONTENTS
Problem Set I: Macroeconomics
Briefings
Problem Set II: Addressing Economic
Growth: An Interdisciplinary Approach
Problem Set III: Simulate Rational
Expectation Theory: Inflation and
Interest Rate
Future Perspective: Decentralized
Monetary Policy
Problem Set IV: Macroeconomics in
Business Practice: a field trip to Liquity
Epilogue

6. ECON 204 Problem Set 1

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11. ECON 204 Problem Set 2

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Therefore we can conclude that
“the initial variables should not
matter, economy that starts with
poverty will catch-up”. The
change in initial labor level does
not effect the steady state of
economy.
∆ "∗$− − −
&∗ "∗$

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Therefore we can conclude that higher
saving rate can lead to higher steady state
per capita capital and income.

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Therefore we can conclude that lower
depreciation rate can lead to higher steady
state per capita capital and income.

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Therefore we can conclude that lower
population growth can lead to higher steady
state per capita capital and income.

18. • ∆
• "∗ $∗%
• ∆"∗ ∆
We can conclude that when the
technology rate a increases, the
steady state GDP per capita will
also increase.

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20. ECON 204 Problem Set 3

21. • Increase in interest rate will lead to an increase in price level.
• Increase in monetary supply will lead to an increase in price level.
• Decrease in monetary demand will lead to an increase in price level.
• Increase in price level will lead to an increase in endogenous monetary
supply.

22. Increase in
interest rate

23. Increase in
Ms2

24. Decrease in
m2

25. Increase in Y2

26. Increase in P

29. Discuss the Limitations of the Rational Expectation Theory
• One limitation of the theory of rational expectations has to do with the
assumption of wage and price flexibility. Under the theory, wages and
prices are assumed to be flexible. However, in reality, they may be
“sticky.” As a consequence, even if expectations are formed rationally,
wages and prices may adjust slowly, which makes the results change not
in the way states in the theory.
• Rational expectations theory cannot explain the prolonged periods of
unemployment that we sometimes experience. If expectations are formed
rationally and if wages and prices are flexible, the deviations from the
equilibrium levels of output and employment should be short-lived.

30. ECON 204 Problem Set 4

31. Complete Lucid Chart Logic Diagram for this course until Week 6

32. Summarize the Field Trip
• CEO information
Robert Lauko is the founder and CEO of Liquity. Holding a Ph.D. in Law from the University of Zurich, Robert
served as a law clerk at the Swiss Federal Administrative Court and in various other legal roles, before turning
into a Blockchain researcher. In Summer 2017, Robert became the DFINITY Foundation’s first employee in
Switzerland. After working on many layers of their Internet Computer project, including consensus algorithms and
incentive mechanism design, Robert decided to revolutionize decentralized borrowing and founded Liquity.
• Content summary of the field
trip
1.Introduction to Stable coins
2.Efficient liquidation mechanism
3.Price stability
4.Business model
5.The motivations of starting Liquity
6.Q & A
• Company Information
Liquity offers interest-free loans by issuing its own USD-
pegged stable coin LUSD against ETH used as collateral.
The loans only need to maintain a minimum collateralization
ratio 110% because of the novel liquidation mechanism. Price
stability does not rely on variable interest rates or
human intervention, but is achieved through a redemption
mechanism coupled with algorithmically adjusted redemption
and loan issuance fees. The protocol incentivizes front end
operators and early adopters that drive growth while
contributing to system stability.

33. Elaborate Stable Coin in general and indicate why Liquity is a Stable Coin
• Stable coin is a cryptocurrency that has a
stable exchange rate with a certain target.
• Stable coin is not only the electronation of
currency, but also a programmable
cryptocurrency, which is a kind of currency
after the birth of blockchain technology.
• Stable coin was born because the asset
price of digital currency fluctuated too much
compared with legal tender. In order to
reduce the huge risk caused by excessive
fluctuation of digital currency, stable coin was
born accordingly.
• Liquity is a stable coin because it matches
the characteristics above. It is a kind of
Crypto-debt-backed stable coin.

34. Main Types of Stable coin

35. Discuss how the concept of Stable Coin relates to monetary policies we
discuss in class and how it differs from traditional monetary policies.

36. Discuss the business model of Liquity
• Liquity is an almost identical
stabilization currency project to
Maker’s, but it solves many of Maker’s
problems, including automated just-in-
time clearing, automatic anchoring of
target prices without manual
governance, and a significant
reduction in collateral rates that can
effectively solve the age-old problem
of underutilization of funds in open
finance.
• Liquity can mortgage Ethereum to
make LQTY, and it can maintain a
safe and stable lending system with a
clearing rate of only 110%. In the
Liquity system, the core contributors
are the third-party front-end
developers and the LQTY providers in
the stability pool.
• Liquity generates economic value by constructing its own Token
economy by three tokens in the system: LQTY token, LUSD token
and Ether. It will charge Issuance fees and redemption fees to
generate its economic revenue.
• Liquity generates social value by providing a more secure and
efficient choice of investment for investors and stimulating the
development of cryptocurrencies as well as the blockchain
technology.

37. Discuss how the experience changed your understanding of macroeconomics
and what's your takeaway for personal and professional growth?
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38. Draw a Lucid Chart Diagram to show the dynamics of how new monetary products are
created to satisfy people's unsatisfied needs.

39. Propose a new research idea on unsatisfied needs that can create economic and social value.
Existing Problems • The trust mechanism of centralized monetary policy is fragile.
• The trust mechanism of cryptocurrency is not fully implemented yet and the stability
mechanism is relatively complicated.
• Blockchains rely solely on cryptography for performance security, which can lead to
operational vulnerability issues.
• There is not a solid credit base The current support for the stability currency is still pegged to
the US dollar, and the value of the US dollar is constantly fluctuating, so it is difficult to
achieve real currency stability.
Research questions How can decentralized monetary policy achieve the goal of security and stability?
Planned methodology Virtual Behavioral experiments among different groups of people.
Possible results One of the possible results is the co-existence of both centralized and decentralized monetary
policies.
Potential intellectual
merits
Using centralized monetary policy as a supplement to decentralized monetary policy.
Government and central banks can give in-time response to risks and mistakes.
Practical impacts People need to find a balance between the pursuit of currency stability and the use of monetary
policy to regulate the economy.
Limitations • The situation is different from countries based on their different policy preferences.
• We are not sure about how much responsibility does the government need to take and
when should government take actions.
Both centralized and
decentralized
monetary policies had
their limitations.

40. References
Github URL
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Other References
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41. Did I really learn these things?
The answer is YES!
In the syllabus…

42. Practice is always
better than reading.
The most efficient
way to understand
new concepts is to
apply them into
reality.
Don’t be afraid of
trying new things.
Python is not as
hard as I thought!
Don’t waste a lot of
time on those things
that can be done by
computers.
Macroeconomics is not only
about boring concepts, graphs
and formulas, but also about
interesting facts and examples.
Elaborate on how this course has changed your understanding of macroeconomics and
your takeaway for personal and professional growth.
Macroeconomics
is not only
connected with
governments and
companies, but
also related to
our daily life.

43. , . , . , ,
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Transferable skills
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Active listening
Demonstrate the skills you have acquired or improved upon in our course.
Communication Computer skills
Problem-solving Skills Management skills

44. Thank
you for
watching !