Some question about a lake model


Author: akira matsui

I’m very impressed by QuantEcon.
We used that as a material for our lecture(seminar) every week.

I’m now writing this post to discuss a part of the website that I can not understand well.

It is about a lake model section.

###1st: At “Endogenous job finding rate”

I doubt that an equation (2) needs p_s inside the summation.

Without p_s, it might not be computed.

###2nd: At “Implementation”


#possible levels of unemployment insurance
cvec = np.linspace(1.,75,25)

ok to depict the same graph in the note?

When I use ‘’,
I obtain

However, this is a little bit different from the graph in the note.

And by changing cvec like

cvec = np.linspace(1.,150,25)

I can obtain

The result(optimal compensation) is not so very affected by this change.

I would be very happy if you answer my question.


Hi Akira,

Many thanks for pointing that our. It’s much appreciated!

I am just about to go on holidays, but after that I’ve put aside some time to rewrite the lake model lecture, together with Tom. As we do that I’ll address this important issue that you’ve raised.

If you have any feedback in the future we would greatly appreciate that too.

PS I’ll be in Tokyo in September / October, including U Tokyo, so perhaps we can chat then.

All the best,



… pointing that out

Sorry for typos — it’s early in the morning and I need more coffee.