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| macroeconomic theory a dynamic general equilibrium approach: Macroeconomic Theory Michael Wickens, Mike Wickens, 2011 Suitable for students and researchers seeking coverage of the developments in macroeconomics, this title lays out the core ideas of modern macroeconomics and its links with finance. It presents the simplest general equilibrium macroeconomic model for a closed economy, and then gradually develops a comprehensive model of the open economy. |
| macroeconomic theory a dynamic general equilibrium approach: Introduction to Dynamic Macroeconomic Theory George T. McCandless, Neil Wallace, 1991 Economies are constantly in flux, and economists have long sought reliable means of analyzing their dynamic properties. This book provides a succinct and accessible exposition of modern dynamic (or intertemporal) macroeconomics. The authors use a microeconomics-based general equilibrium framework, specifically the overlapping generations model, which assumes that in every period there are two generations which overlap. This model allows the authors to fully describe economies over time and to employ traditional welfare analysis to judge the effects of various policies. By choosing to keep the mathematical level simple and to use the same modeling framework throughout, the authors are able to address many subtle economic issues. They analyze savings, social security systems, the determination of interest rates and asset prices for different types of assets, Ricardian equivalence, business cycles, chaos theory, investment, growth, and a variety of monetary phenomena. Introduction to Dynamic Macroeconomic Theory will become a classic of economic exposition and a standard teaching and reference tool for intertemporal macroeconomics and the overlapping generations model. The writing is exceptionally clear. Each result is illustrated with analytical derivations, graphically, and by worked out examples. Exercises, which are strategically placed, are an integral part of the book. |
| macroeconomic theory a dynamic general equilibrium approach: Dynamic Macroeconomic Theory Thomas J. Sargent, 2009-06-01 The tasks of macroeconomics are to interpret observations on economic aggregates in terms of the motivations and constraints of economic agents and to predict the consequences of alternative hypothetical ways of administering government economic policy. General equilibrium models form a convenient context for analyzing such alternative government policies. In the past ten years, the strengths of general equilibrium models and the corresponding deficiencies of Keynesian and monetarist models of the 1960s have induced macroeconomists to begin applying general equilibrium models. This book describes some general equilibrium models that are dynamic, that have been built to help interpret time-series of observations of economic aggregates and to predict the consequences of alternative government interventions. The first part of the book describes dynamic programming, search theory, and real dynamic capital pricing models. Among the applications are stochastic optimal growth models, matching models, arbitrage pricing theories, and theories of interest rates, stock prices, and options. The remaining parts of the book are devoted to issues in monetary theory; currency-in-utility-function models, cash-in-advance models, Townsend turnpike models, and overlapping generations models are all used to study a set of common issues. By putting these models to work on concrete problems in exercises offered throughout the text, Sargent provides insights into the strengths and weaknesses of these models of money. An appendix on functional analysis shows the unity that underlies the mathematics used in disparate areas of rational expectations economics. This book on dynamic equilibrium macroeconomics is suitable for graduate-level courses; a companion book, Exercises in Dynamic Macroeconomic Theory, provides answers to the exercises and is also available from Harvard University Press. |
| macroeconomic theory a dynamic general equilibrium approach: Dynamic Macroeconomics George Alogoskoufis, 2019-12-17 An advanced treatment of modern macroeconomics, presented through a sequence of dynamic equilibrium models, with discussion of the implications for monetary and fiscal policy. This textbook offers an advanced treatment of modern macroeconomics, presented through a sequence of dynamic general equilibrium models based on intertemporal optimization on the part of economic agents. The book treats macroeconomics as applied and policy-oriented general equilibrium analysis, examining a number of models, each of which is suitable for investigating specific issues but may be unsuitable for others. After presenting a brief survey of the evolution of macroeconomics and the key facts about long-run economic growth and aggregate fluctuations, the book introduces the main elements of the intertemporal approach through a series of two-period competitive general equilibrium models—the simplest possible intertemporal models. This sets the stage for the remainder of the book, which presents models of economic growth, aggregate fluctuations, and monetary and fiscal policy. The text focuses on a full analysis of a limited number of key intertemporal models, which are stripped down to essentials so that students can focus on the dynamic properties of the models. Exercises encourage students to try their hands at solving versions of the dynamic models that define modern macroeconomics. Appendixes review the main mathematical techniques needed to analyze optimizing dynamic macroeconomic models. The book is suitable for advanced undergraduate and graduate students who have some knowledge of economic theory and mathematics for economists. |
| macroeconomic theory a dynamic general equilibrium approach: Dynamic General Equilibrium Modeling Burkhard Heer, Alfred Maussner, 2009-08-12 Modern business cycle theory and growth theory uses stochastic dynamic general equilibrium models. In order to solve these models, economists need to use many mathematical tools. This book presents various methods in order to compute the dynamics of general equilibrium models. In part I, the representative-agent stochastic growth model is solved with the help of value function iteration, linear and linear quadratic approximation methods, parameterised expectations and projection methods. In order to apply these methods, fundamentals from numerical analysis are reviewed in detail. In particular, the book discusses issues that are often neglected in existing work on computational methods, e.g. how to find a good initial value. In part II, the authors discuss methods in order to solve heterogeneous-agent economies. In such economies, the distribution of the individual state variables is endogenous. This part of the book also serves as an introduction to the modern theory of distribution economics. Applications include the dynamics of the income distribution over the business cycle or the overlapping-generations model. In an accompanying home page to this book, computer codes to all applications can be downloaded. |
| macroeconomic theory a dynamic general equilibrium approach: Dynamic Macroeconomic Analysis Sumru Altug, Jagjit S. Chadha, Charles Nolan, 2003-11-20 This collection of essays applies modern micro-founded macroeconomic models to some of the most important economic policy questions facing monetary and macroeconomic policymakers. Key issues surveyed include: consumption investment; growth and business cycles; the role of government; asset pricing; the interaction of monetary and fiscal policy; open-economy issues; stabilization policy and general equilibrium analysis of emerging market crises. The book includes specially commissioned chapters from recognized authorities. |
| macroeconomic theory a dynamic general equilibrium approach: Macroeconomic Theory Mike Wickens, 2011 And unemployment Addresses questions raised by the recent financial crisis Web-based exercises with answers Extensive mathematical appendix for at-a-glance easy reference. |
| macroeconomic theory a dynamic general equilibrium approach: Exercises in Dynamic Macroeconomic Theory Rodolfo E. Manuelli, Thomas J Sargent, 2009-06-01 This book is a companion volume to Dynamic Macroeconomic Theory by Thomas J. Sargent. It provides scrimmages in dynamic macroeconomic theory--precisely the kind of drills that people will need in order to learn the techniques of dynamic programming and its applications to economics. By doing these exercises, the reader can acquire the ability to put the theory to work in a variety of new situations, build technical skill, gain experience in fruitful ways of setting up problems, and learn to distinguish cases in which problems are well posed from cases in which they are not.The basic framework provided by variants of a dynamic general equilibrium model is used to analyze problems in macroeconomics and monetary economics. An equilibrium model provides a mapping from parameters of preferences, technologies, endowments, and rules of the game to a probability model for time series. The rigor of the logical connections between theory and observations that the mapping provides is an attractive feature of dynamic equilibrium, or rational expectations, models. This book gives repeated and varied practice in constructing and interpreting this mapping. |
| macroeconomic theory a dynamic general equilibrium approach: Introduction to Dynamic Macroeconomic General Equilibrium Models Jose Luis Torres Chacon, 2015-03-01 This book offers an introductory step-by-step course to Dynamic Stochastic General Equilibrium modelling. Modern macroeconomic analysis is increasingly concerned with the construction, calibration and/or estimation and simulation of Dynamic General Equilibrium (DGE) models. The book is intended for graduate students as an introductory course to DGE modelling and for those economists who would like a hands-on approach to learning the basics of modern dynamic macroeconomic modelling. The book starts with the simplest canonical neoclassical DGE model and then gradually extends the basic framework incorporating a variety of additional features, such as consumption habit formation, investment adjustment cost, investment-specific technological change, taxes, public capital, household production, non-ricardian agents, monopolistic competition, etc. The book includes Dynare codes for the models developed that can be downloaded from the book's homepage. |
| macroeconomic theory a dynamic general equilibrium approach: Post Walrasian Macroeconomics David Colander, 2006-07-17 Macroeconomics is evolving in an almost dialectic fashion. The latest evolution is the development of a new synthesis that combines insights of new classical, new Keynesian and real business cycle traditions into a dynamic, stochastic general equilibrium (DSGE) model that serves as a foundation for thinking about macro policy. That new synthesis has opened up the door to a new antithesis, which is being driven by advances in computing power and analytic techniques. This new synthesis is coalescing around developments in complexity theory, automated general to specific econometric modeling, agent-based models, and non-linear and statistical dynamical models. This book thus provides the reader with an introduction to what might be called a Post Walrasian research program that is developing as the antithesis of the Walrasian DSGE synthesis. |
| macroeconomic theory a dynamic general equilibrium approach: Macroeconomic Analysis Dirk Niepelt, 2019-12-31 A concise but rigorous and thorough introduction to modern macroeconomic theory. This book offers an introduction to modern macroeconomic theory. It is concise but rigorous and broad, covering all major areas in mainstream macroeconomics today and showing how macroeconomic models build on and relate to each other. The self-contained text begins with models of individual decision makers, proceeds to models of general equilibrium without and with friction, and, finally, presents positive and normative theories of economic policy. After a review of the microeconomic foundations of macroeconomics, the book analyzes the household optimization problem, the representative household model, and the overlapping generations model. It examines risk and the implications for household choices and macroeconomic outcomes; equilibrium asset returns, prices, and bubbles; labor supply, growth, and business cycles; and open economy issues. It introduces frictions and analyzes their consequences in the labor market, financial markets, and for investment; studies money as a unit of account, store of value, and medium of exchange; and analyzes price setting in general equilibrium. Turning to government and economic policy, the book covers taxation, debt, social security, and monetary policy; optimal fiscal and monetary policies; and sequential policy choice, with applications in capital income taxation, sovereign debt and default, politically motivated redistribution, and monetary policy biases. Macroeconomic Analysis can be used by first-year graduate students in economics and students in master's programs, and as a supplemental text for advanced courses. |
| macroeconomic theory a dynamic general equilibrium approach: Recursive Macroeconomic Theory Lars Ljungqvist, Thomas J. Sargent, 2004 A significant new edition of a text that offers both tools and sample applications; extensive revisions and seven new chapters improve and expand upon the original treatment. |
| macroeconomic theory a dynamic general equilibrium approach: A History of Macroeconomics from Keynes to Lucas and Beyond Michel De Vroey, 2016-01-08 This book retraces the history of macroeconomics from Keynes's General Theory to the present. Central to it is the contrast between a Keynesian era and a Lucasian - or dynamic stochastic general equilibrium (DSGE) - era, each ruled by distinct methodological standards. In the Keynesian era, the book studies the following theories: Keynesian macroeconomics, monetarism, disequilibrium macro (Patinkin, Leijongufvud, and Clower) non-Walrasian equilibrium models, and first-generation new Keynesian models. Three stages are identified in the DSGE era: new classical macro (Lucas), RBC modelling, and second-generation new Keynesian modeling. The book also examines a few selected works aimed at presenting alternatives to Lucasian macro. While not eschewing analytical content, Michel De Vroey focuses on substantive assessments, and the models studied are presented in a pedagogical and vivid yet critical way. |
| macroeconomic theory a dynamic general equilibrium approach: Transforming Modern Macroeconomics Roger E. Backhouse, Mauro Boianovsky, 2013 Since the 1950s, macroeconomics has been transformed. This book is about one of the most important aspects of that transformation: the attempt, through the end of the twenty-first century and beyond, to construct macroeconomic models rigorously derived from models of individual firms and households. |
| macroeconomic theory a dynamic general equilibrium approach: The Theory of General Economic Equilibrium Andreu Mas-Colell, 1985 This book brings together the author's pioneering work, written over the last twenty years, on the use of differential methods in general equilibrium theory. |
| macroeconomic theory a dynamic general equilibrium approach: The Macroeconomics of Self-fulfilling Prophecies Roger E. A. Farmer, 1999 Farmer argues for the future of macroeconomics as a branch ofapplied general equilibrium theory. His main theme is thatmacroeconomics is best viewed as the study of equilibrium environmentsin which the welfare theorems break down. |
| macroeconomic theory a dynamic general equilibrium approach: Methods for Applied Macroeconomic Research Fabio Canova, 2011-09-19 The last twenty years have witnessed tremendous advances in the mathematical, statistical, and computational tools available to applied macroeconomists. This rapidly evolving field has redefined how researchers test models and validate theories. Yet until now there has been no textbook that unites the latest methods and bridges the divide between theoretical and applied work. Fabio Canova brings together dynamic equilibrium theory, data analysis, and advanced econometric and computational methods to provide the first comprehensive set of techniques for use by academic economists as well as professional macroeconomists in banking and finance, industry, and government. This graduate-level textbook is for readers knowledgeable in modern macroeconomic theory, econometrics, and computational programming using RATS, MATLAB, or Gauss. Inevitably a modern treatment of such a complex topic requires a quantitative perspective, a solid dynamic theory background, and the development of empirical and numerical methods--which is where Canova's book differs from typical graduate textbooks in macroeconomics and econometrics. Rather than list a series of estimators and their properties, Canova starts from a class of DSGE models, finds an approximate linear representation for the decision rules, and describes methods needed to estimate their parameters, examining their fit to the data. The book is complete with numerous examples and exercises. Today's economic analysts need a strong foundation in both theory and application. Methods for Applied Macroeconomic Research offers the essential tools for the next generation of macroeconomists. |
| macroeconomic theory a dynamic general equilibrium approach: International Macroeconomics Stephanie Schmitt-Grohé, Martín Uribe, Michael Woodford, 2022-09-06 An essential introduction to one of the most timely and important subjects in economics International Macroeconomics presents a rigorous and theoretically elegant treatment of real-world international macroeconomic problems, incorporating the latest economic research while maintaining a microfounded, optimizing, and dynamic general equilibrium approach. This one-of-a-kind textbook introduces a basic model and applies it to fundamental questions in international economics, including the determinants of the current account in small and large economies, processes of adjustment to shocks, the determinants of the real exchange rate, the role of fixed and flexible exchange rates in models with nominal rigidities, and interactions between monetary and fiscal policy. The book confronts theoretical predictions using actual data, highlighting both the power and limits of given theories and encouraging critical thinking. Provides a rigorous and elegant treatment of fundamental questions in international macroeconomicsBrings undergraduate and master’s instruction in line with modern economic researchFollows a microfounded, optimizing, and dynamic general equilibrium approachAddresses fundamental questions in international economics, such as the role of capital controls in the presence of financial frictions and balance-of-payments crisesUses real-world data to test the predictions of theoretical modelsFeatures a wealth of exercises at the end of each chapter that challenge students to hone their theoretical skills and scrutinize the empirical relevance of modelsAccompanied by a website with lecture slides for every chapter |
| macroeconomic theory a dynamic general equilibrium approach: Big Ideas in Macroeconomics Kartik B. Athreya, 2013-12-27 An accessible description of modern macroeconomics, and a defense of its policy relevance. Macroeconomists have been caricatured either as credulous savants in love with the beauty of their mathematical models or as free-market fundamentalists who admit no doubt as to the market's wisdom. In this book, Kartik Athreya draws a truer picture, offering a nontechnical description of prominent ideas and models in macroeconomics, and arguing for their value as interpretive tools as well as their policy relevance. Athreya deliberately leaves out the technical machinery, providing an essential guide to the sometimes abstract ideas that drive macroeconomists' research and practical policy advice. Athreya describes the main approach to macroeconomic model construction, the foundational Walrasian general-equilibrium framework, and its modern version, the Arrow-Debreu-McKenzie (ADM) model. In the heart of the book, Athreya shows how the Walrasian approach shapes and unifies much of modern macroeconomics. He details models central to ongoing macroeconomic analyses: the neoclassical and stochastic growth models, the standard incomplete-markets model, the overlapping-generations model, and the standard search model. Athreya's accessible primer traces the links between the views and policy advice of modern macroeconomists and their shared theoretical approach. |
| macroeconomic theory a dynamic general equilibrium approach: Introduction to Computable General Equilibrium Models Mary E. Burfisher, 2016 The book provides a hands-on introduction to computable general equilibrium (CGE) models, written at an accessible, undergraduate level. |
| macroeconomic theory a dynamic general equilibrium approach: Advanced Macroeconomics: An Introduction For Undergraduates Angus Chi Ho Chu, 2020-10-06 Advanced Macroeconomics covers selected topics in advanced macroeconomics at undergraduate level and bridges the gap between intermediate macroeconomics for undergraduates and advanced macroeconomics for postgraduates. By building on materials in intermediate macroeconomics textbooks and covering the mathematics of some classic dynamic general-equilibrium models, this book will give undergraduate students a firm appreciation of modern developments in macroeconomics. This book examines the implications of government policies (such as fiscal policy, monetary policy and innovation policy) and devotes several chapters to economic growth, covering the ideas for which Paul Romer was awarded the Nobel Memorial Prize in Economic Sciences in 2018.Dynamic general equilibrium is the foundation of modern macroeconomics. Chapter 1 begins with a simple static model to demonstrate the concept of general equilibrium. Chapters 2 to 4 cover the neoclassical growth model, exploring the effects of exogenous changes in technology: an important source of business cycle fluctuations. Chapters 5 to 7 use the neoclassical growth model to explore the effects of fiscal policy instruments such as government spending, labour income tax and capital income tax. Chapter 8 develops a simple New Keynesian model to analyse the effects of monetary policy. Chapter 9 begins the analysis of economic growth by reviewing the Solow growth model. Chapters 10 to 12 present the Ramsey model and introduce different market structures to the model to lay down the foundation of the Romer model. Chapter 13 incorporates an R&D sector into the Ramsey model with a monopolistically competitive market structure to develop the Romer model of endogenous technological change. Chapters 14 to 15 examine the implications of the Romer model. Chapter 16 concludes this book by presenting the Schumpeterian growth model and examining its different implications from the Romer model. |
| macroeconomic theory a dynamic general equilibrium approach: An Introduction to Computational Macroeconomics Anelí Bongers, Trinidad Gómez, José L. Torres, 2020-09-01 This book presents an introduction to computational macroeconomics, using a new approach to the study of dynamic macroeconomic models. It solves a variety of models in discrete time numerically, using a Microsoft Excel spreadsheet as a computer tool. The solved models include dynamic macroeconomic models with rational expectations, both non-microfounded and microfounded, constituting a novel approach that facilitates the learning and use of dynamic general equilibrium models, which have now become the principal tool for macroeconomic analysis. Spreadsheets are widely known and relatively easy to use, meaning that the computer skills needed to work with dynamic general equilibrium models are affordable for undergraduate students in Advanced Macroeconomics courses. |
| macroeconomic theory a dynamic general equilibrium approach: Teaching Macroeconomics with Microsoft Excel® Humberto Barreto, 2016-05-23 Humberto Barreto shows professors how to teach macroeconomic models and incorporate data using Microsoft Excel® with free files and videos. |
| macroeconomic theory a dynamic general equilibrium approach: Lectures on Macroeconomics Olivier Blanchard, Stanley Fischer, 1989-03-21 The main purpose of Lectures on Macroeconomics is to characterize and explain fluctuations in output, unemployment and movement in prices. Lectures on Macroeconomics provides the first comprehensive description and evaluation of macroeconomic theory in many years. While the authors' perspective is broad, they clearly state their assessment of what is important and what is not as they present the essence of macroeconomic theory today.The main purpose of Lectures on Macroeconomics is to characterize and explain fluctuations in output, unemployment and movement in prices. The most important fact of modern economic history is persistent long term growth, but as the book makes clear, this growth is far from steady. The authors analyze and explore these fluctuations. Topics include consumption and investment; the Overlapping Generations Model; money; multiple equilibria, bubbles, and stability; the role of nominal rigidities; competitive equilibrium business cycles, nominal rigidities and economic fluctuations, goods, labor and credit markets; and monetary and fiscal policy issues. Each of chapters 2 through 9 discusses models appropriate to the topic. Chapter 10 then draws on the previous chapters, asks which models are the workhorses of macroeconomics, and sets the models out in convenient form. A concluding chapter analyzes the goals of economic policy, monetary policy, fiscal policy, and dynamic inconsistency. Written as a text for graduate students with some background in macroeconomics, statistics, and econometrics, Lectures on Macroeconomics also presents topics in a self contained way that makes it a suitable reference for professional economists. |
| macroeconomic theory a dynamic general equilibrium approach: General Equilibrium W. D. A. Bryant, 2010 This book focuses on the foundations of general equilibrium theory, more specifically on the existence, uniqueness, stability, optimality and comparative static properties of equilibrium states. It also explores the question of the empirical relevance of equilibrium states. It highlights a series of 'relationship conditions' which are essential for the existence of equilibrium, but appear in optimality results. -- PUBLISHER WEBSITE. |
| macroeconomic theory a dynamic general equilibrium approach: Open Economy Macroeconomics Martín Uribe, Stephanie Schmitt-Grohé, 2017-04-04 A cutting-edge graduate-level textbook on the macroeconomics of international trade Combining theoretical models and data in ways unimaginable just a few years ago, open economy macroeconomics has experienced enormous growth over the past several decades. This rigorous and self-contained textbook brings graduate students, scholars, and policymakers to the research frontier and provides the tools and context necessary for new research and policy proposals. Martín Uribe and Stephanie Schmitt-Grohé factor in the discipline's latest developments, including major theoretical advances in incorporating financial and nominal frictions into microfounded dynamic models of the open economy, the availability of macro- and microdata for emerging and developed countries, and a revolution in the tools available to simulate and estimate dynamic stochastic models. The authors begin with a canonical general equilibrium model of an open economy and then build levels of complexity through the coverage of important topics such as international business-cycle analysis, financial frictions as drivers and transmitters of business cycles and global crises, sovereign default, pecuniary externalities, involuntary unemployment, optimal macroprudential policy, and the role of nominal rigidities in shaping optimal exchange-rate policy. Based on courses taught at several universities, Open Economy Macroeconomics is an essential resource for students, researchers, and practitioners. Detailed exploration of international business-cycle analysis Coverage of financial frictions as drivers and transmitters of business cycles and global crises Extensive investigation of nominal rigidities and their role in shaping optimal exchange-rate policy Other topics include fixed exchange-rate regimes, involuntary unemployment, optimal macroprudential policy, and sovereign default and debt sustainability Chapters include exercises and replication codes |
| macroeconomic theory a dynamic general equilibrium approach: Handbook of Computable General Equilibrium Modeling Peter B. Dixon, Dale Jorgenson, 2013-11-14 In this collection of 17 articles, top scholars synthesize and analyze scholarship on this widely used tool of policy analysis, setting forth its accomplishments, difficulties, and means of implementation. Though CGE modeling does not play a prominent role in top US graduate schools, it is employed universally in the development of economic policy. This collection is particularly important because it presents a history of modeling applications and examines competing points of view. - Presents coherent summaries of CGE theories that inform major model types - Covers the construction of CGE databases, model solving, and computer-assisted interpretation of results - Shows how CGE modeling has made a contribution to economic policy |
| macroeconomic theory a dynamic general equilibrium approach: Finance & Development, September 2014 International Monetary Fund. External Relations Dept., 2014-08-25 This chapter discusses various past and future aspects of the global economy. There has been a huge transformation of the global economy in the last several years. Articles on the future of energy in the global economy by Jeffrey Ball and on measuring inequality by Jonathan Ostry and Andrew Berg are also illustrated. Since the 2008 global crisis, global economists must change the way they look at the world. |
| macroeconomic theory a dynamic general equilibrium approach: The General Economic Theory Wei-Bin Zhang, 2020-08-27 This book develops a general economic theory that integrates various economic theories and ideas and establishes important relationships between economic variables that are not formally recognized in the economic literature. The author demonstrates how the basic model is integrated with neoclassical growth theory, Walrasian general equilibrium theory, and Ricardian distribution theory, and how these theories can be incorporated through a single set of equations with a microeconomic basis. The book offers new insights into income and wealth distribution between heterogeneous households, racial and national differences in growth and development, interdependence between different stock variables with portfolio choices among different markets. It will appeal to scholars of economists interested in an integrative theoretical approach to this discipline. |
| macroeconomic theory a dynamic general equilibrium approach: Macroeconomics from the Bottom-up Domenico Delli Gatti, Saul Desiderio, Edoardo Gaffeo, Pasquale Cirillo, Mauro Gallegati, 2011-04-18 This book arose from our conviction that the NNS-DSGE approach to the analysis of aggregate market outcomes is fundamentally flawed. The practice of overcoming the SMD result by recurring to a fictitious RA leads to insurmountable methodological problems and lies at the root of DSGE models’ failure to satisfactorily explain real world features, like exchange rate and banking crises, bubbles and herding in financial markets, swings in the sentiment of consumers and entrepreneurs, asymmetries and persistence in aggregate variables, and so on. At odds with this view, our critique rests on the premise that any modern macroeconomy should be modeled instead as a complex system of heterogeneous interacting individuals, acting adaptively and autonomously according to simple and empirically validated rules of thumb. We call our proposed approach Bottom-up Adaptive Macroeconomics (BAM). The reason why we claim that the contents of this book can be inscribed in the realm of macroeconomics is threefold: i) We are looking for a framework that helps us to think coherently about the interrelationships among two or more markets. In what follows, in particular, three markets will be considered: the markets for goods, labor and loanable funds. In this respect, real time matters: what happens in one market depends on what has happened, on what is happening, or on what will happen in other markets. This implies that intertemporal coordination issues cannot be ignored. ii) Eventually, it’s all about prices and quantities. However, we are mostly interested in aggregate prices and quantities, that is indexes built from the dispersed outcomes of the decentralized transactions of a large population of heterogeneous individuals. Each individual acts purposefully, but she knows anything about the levels of prices and quantities which clear markets in the aggregate. iii) In the hope of being allowed to purport scientific claims, BAM relies on the assumption that individual purposeful behaviours aggregates into regularities. Macro behaviour, however, can depart radically from what the individual units are trying to accomplish. It is in this sense that aggregate outcomes emerge from individual actions and interactions. |
| macroeconomic theory a dynamic general equilibrium approach: Economic Forecasting Graham Elliott, Allan Timmermann, 2016-04-05 A comprehensive and integrated approach to economic forecasting problems Economic forecasting involves choosing simple yet robust models to best approximate highly complex and evolving data-generating processes. This poses unique challenges for researchers in a host of practical forecasting situations, from forecasting budget deficits and assessing financial risk to predicting inflation and stock market returns. Economic Forecasting presents a comprehensive, unified approach to assessing the costs and benefits of different methods currently available to forecasters. This text approaches forecasting problems from the perspective of decision theory and estimation, and demonstrates the profound implications of this approach for how we understand variable selection, estimation, and combination methods for forecasting models, and how we evaluate the resulting forecasts. Both Bayesian and non-Bayesian methods are covered in depth, as are a range of cutting-edge techniques for producing point, interval, and density forecasts. The book features detailed presentations and empirical examples of a range of forecasting methods and shows how to generate forecasts in the presence of large-dimensional sets of predictor variables. The authors pay special attention to how estimation error, model uncertainty, and model instability affect forecasting performance. Presents a comprehensive and integrated approach to assessing the strengths and weaknesses of different forecasting methods Approaches forecasting from a decision theoretic and estimation perspective Covers Bayesian modeling, including methods for generating density forecasts Discusses model selection methods as well as forecast combinations Covers a large range of nonlinear prediction models, including regime switching models, threshold autoregressions, and models with time-varying volatility Features numerous empirical examples Examines the latest advances in forecast evaluation Essential for practitioners and students alike |
| macroeconomic theory a dynamic general equilibrium approach: Economic Growth and Macroeconomic Dynamics Steve Dowrick, Rohan Pitchford, Stephen J. Turnovsky, 2004-05-31 The development of the endogenous growth model rekindled interest in growth theory. In contrast to the neo-classical model, long-run endogenous growth emerged as an equilibrium outcome, reflecting the behaviour of optimizing agents in the economy. This book brings together a number of contributions in growth theory and macroeconomic dynamics, reflecting these developments and the ongoing debate over the relative merits of neo-classical and endogenous growth models. It focuses on the emergence of three important aspects: First, it develops growth models that extend the underlying theory in different directions. Second, it addresses one of the concerns of the literature on growth and dynamics: the statistical properties of underlying data and the effort to ensure that growth models are consistent with empirical evidence. Third, it discusses the increasingly international focus of macrodynamics and growth theory, an inevitable consequence of the integration of the world economy. |
| macroeconomic theory a dynamic general equilibrium approach: General Equilibrium, Capital and Macroeconomics Fabio Petri, 2004-01-01 'Fabio Petri has been a persistent critic of marginalist theories of value and distribution. In this provocative book, he presents an extensive scrutiny of the reasons why many economists are unsatisfied with the Neo-Walrasian approach to General Equilibrium theory and why some reject it altogether. General Equilibrium, Capital and Macroeconomics throws down a challenge to all economic theorists.' - Neri Salvadori, University of Pisa, Italy 'General Equilibrium, Capital and Macroeconomics is a thorough and deep book. It contains a remarkably clear and precise statement of the conceptual, methodological and analytical difficulties besetting the demand and supply approach to economics as it is advocated in partial and general equilibrium models, old and new, micro and macro. This work covers essential parts of modern economics, it is well written and the subject matter is carefully arranged. The book will be of interest to a wide range of economists.' - Heinz D. Kurz, University of Graz, Austria This book argues that the shift in general equilibrium theory, from its early long-period to the modern very-short-period versions, has had very important consequences which are insufficiently appreciated by large parts of the economics profession. This shift has produced new difficulties, and has undermined central tenets of neoclassical macroeconomic theory (such as the negative dependence of aggregate investment on the interest rate, or the existence of a downward-sloping demand curve for labour) which had their basis in the long-period versions where capital was treated as a single factor. |
| macroeconomic theory a dynamic general equilibrium approach: The ABCs of RBCs George McCandless, 2008-03-31 The ABCs of RBCs is the first book to provide a basic introduction to Real Business Cycle (RBC) and New-Keynesian models. These models argue that random shocks—new inventions, droughts, and wars, in the case of pure RBC models, and monetary and fiscal policy and international investor risk aversion, in more open interpretations—can trigger booms and recessions and can account for much of observed output volatility. George McCandless works through a sequence of these Real Business Cycle and New-Keynesian dynamic stochastic general equilibrium models in fine detail, showing how to solve them, and how to add important extensions to the basic model, such as money, price and wage rigidities, financial markets, and an open economy. The impulse response functions of each new model show how the added feature changes the dynamics. The ABCs of RBCs is designed to teach the economic practitioner or student how to build simple RBC models. Matlab code for solving many of the models is provided, and careful readers should be able to construct, solve, and use their own models. In the tradition of the “freshwater” economic schools of Chicago and Minnesota, McCandless enhances the methods and sophistication of current macroeconomic modeling. |
| macroeconomic theory a dynamic general equilibrium approach: The Evolution of Macroeconomic Theory and Policy Kamran Dadkhah, 2009-07-25 The Great Depression of the 1930s gave birth to a branch of economics christened macroeconomics. This highly readable book presents an unconventional and timely perspective on macroeconomics – the interplay of theory and policy in a historical context. |
| macroeconomic theory a dynamic general equilibrium approach: Robustness Lars Peter Hansen, Thomas J. Sargent, 2016-06-28 The standard theory of decision making under uncertainty advises the decision maker to form a statistical model linking outcomes to decisions and then to choose the optimal distribution of outcomes. This assumes that the decision maker trusts the model completely. But what should a decision maker do if the model cannot be trusted? Lars Hansen and Thomas Sargent, two leading macroeconomists, push the field forward as they set about answering this question. They adapt robust control techniques and apply them to economics. By using this theory to let decision makers acknowledge misspecification in economic modeling, the authors develop applications to a variety of problems in dynamic macroeconomics. Technical, rigorous, and self-contained, this book will be useful for macroeconomists who seek to improve the robustness of decision-making processes. |
| macroeconomic theory a dynamic general equilibrium approach: Revisiting the Informal Sector Sarbajit Chaudhuri, Ujjaini Mukhopadhyay, 2009-10-15 This book provides insight into the diverse aspects of the informal sector, its role in the context of unemployment, child labor, globalization and environment, as well as its multi-faceted interaction with the other sectors of the economy. |
| macroeconomic theory a dynamic general equilibrium approach: General Equilibrium Models for Development Policy Kemal Dervis, Kemal, Jaime de Melo, Sherman Robinson, 1982-05-31 |
| macroeconomic theory a dynamic general equilibrium approach: Intermediate Macroeconomics Robert J. Barro, Angus Chu, Guido Cozzi, 2017-03-22 This brand new EMEA edition of Robert Barro's popular text brings an EMEA perspective whilst also being fully updated to reflect the macroeconomics of a post-financial crisis world. Starting with long-run macroeconomics, this text explores some of the key theories and models in macroeconomics such as the Keynesian model and the business-cycle model, finishing with extending the equilibrium model to the open economy. This exciting new edition provides an accurate and unified presentation of current macroeconomic thought whilst maintaining Professor Barro's original vision for his textbook.This edition also comes with the optional extra of Aplia, a comprehensive online learning assessment tool with auto-graded randomised questions to test students' understanding. |
| macroeconomic theory a dynamic general equilibrium approach: Macroeconomic Theory , 1987 Macroeconomic Theory, in its first edition, was widely adopted for use as a graduate text; this updated and expanded version should find even greater popularity as a text and as a research reference. It has been substantially revised to include three entirely new chapters: The Consumption Function, Government Debt and Taxes, and Dynamic Optimal Taxation. Significant additions have been made to three of the original chapters dealing with difference equations, stochastic difference equations, and investment under uncertainty. Key Features * This book has been substantially revised to include three entirely new chapters on consumption, government debt and taxes, and dynamic optimal taxation * Significant additions have been made to three of the original chapters dealing with difference equations, stochastic difference equations, and investment under uncertainty |
Macroeconomics: A Dynamic General Equilibrium Approach
Equilibrium (DGE) Approach. As we have stated before, modern macroeconomics is based on a dynamic general equilibrium approach which postulates that. Economic agents are …
Macroeconomic Theory - GBER
1.1 Dynamic General Equilibrium versus Traditional Macroeconomics 1 1.2 Traditional Macroeconomics 3 1.3 Dynamic General Equilibrium Macroeconomics 4 1.4 This Book 7 2 …
Michael Wickens: Macroeconomic Theory - Princeton University
In this chapter we introduce the basic dynamic general equilibrium model for a closed economy. The aim is to explain how the optimal level of output is determined in the economy and how …
Macroeconomic Theory - New York University
After a quick warm-up for dynamic general equilibrium models in the first part of the course we will discuss the two workhorses of modern macroeconomics, the neoclassical growth model …
Macroeconomic Theory - Antonio / Organização Industrial
general equilibrium: in the OLG model equilibria may not be Pareto opti- mal, fiat money may have positive value, for a given economy there may be a continuum of equilibria (and the core …
Introduction to Dynamic Macroeconomic General Equilibrium …
This book offers an introductory step-by-step course in Dynamic Sto-chastic General Equilibrium (DSGE) modelling. Modern macroeconomic analysis is increasingly concerned with the …
Macroeconomic Theory - De Gruyter
Macroeconomic theory:a dynamic general equilibrium approach/Michael Wickens. – 2nd ed. p. cm. Includes bibliographical references and index. ISBN 978-0-691-15286-8 (alk. paper) 1. …
Macroeconomic Theory - Princeton University
A Dynamic General Equilibrium Approach. Michael Wickens. Princeton University Press. Princeton and Oxford. Questions. (1) We have assumed that the economy discounts s periods …
Macroeconomic Theory I - Massachusetts Institute of Technology
The first half of the semester is an introduction to the techniques and the applications of dynamic general equilibrium models, with particular emphasis on models of economic growth. There …
DYNAMIC MACROECONOMIC ANALYSIS - Cambridge University …
DYNAMIC MACROECONOMIC ANALYSIS Dynamic stochastic general equilibrium (DSGE) models have begun to dominate the field of macroeconomic theory and policy-making. These …
Macroeconomics: A Dynamic General Equilibrium Approach
Modern Macroeconomics: the Dynamic General Equilibrium (DGE) Approach Modern macroeconomics is based on a dynamic general equilibrium approach which postulates that …
Dynamic Macroeconomic Theory
It presents the main theories of economic growth and aggregate fluctuations, through a sequence of dynamic general equilibrium models, which are based on inter-temporal optimization on the …
Wickens, Michael: Macroeconomic Theory. A Dynamic General …
In this second edition of his "Macroeconomic Theory - A Dynamic General Equilibrium Approach", Michael Wickens almost completes the unbelievable task of writing a textbook on …
The rebuilding macroeconomic theory project part II: multiple ...
a new multiple-equilibrium and diverse (MEADE) paradigm is needed for macroeconomics. It will emphasize that economies can have more than one stable outcome, and study why.
Dynamic Stochastic General Equilibrium Models as a Tool for …
28 Nov 2006 · This article discusses the evolution of dynamic macroeconomic models from calibrated Real Business Cycle models to estimated dynamic stochastic general equilibrium …
The Future of Macroeconomics: Macro Theory and Models at the …
dynamic stochastic general equilibrium (DSGE) models used at central banks. To help appreciate the contrasts between this approach and the policy models that preceded it, section 1 critically …
A Very Short Introduction to Dynamic Optimisation
A more extensive analysis of dynamic optimisation can be found in the appendixes of the following books: A. Mas-Colell, M.D. Whinston and J.R. Green: Microeconomic Theory, Oxford …
Policy Analysis Using DSGE Models: An Introduction
outcomes makes the models dynamic and assigns a central role to agents’ expectations in the determination of current macroeconomic outcomes. In addition, the models’ general …
Robert E. Lucas Jr. - University of Chicago
The methods of microeconomics, general equilibrium theory, control theory, dynamic programming, statistical decision theory, and game theory have been adopted by …
The Future of Macroeconomics: Macro Theory and Models at the …
particularly of the New Keynesian dynamic stochastic general equilibrium (DSGE) models used at central banks. To help appreciate the contrasts between this approach and the policy models …
INTRODUCTION: DYNAMIC STOCHASTIC GENERAL EQUILIBRIUM …
It is no exaggeration to state that dynamic stochastic general equilibrium (DSGE) modelling has become the dominant approach in quantitative macro-economics. Yet it is often misunderstood …
Macroeconomics: A Dynamic General Equilibrium Approach
uni–ed micro-founded macroeconomic framework which would allow us to accurately predict the macroeconomic outcomes in response to any external shock (policy-driven or otherwise) led to …
Macroeconomic Theory A Dynamic General Equilibrium Approach …
9 Feb 2024 · Macroeconomic Theory 2008-01-23 Michael Wickens Macroeconomic Theory is the most up-to-date graduate-level macroeconomics textbook available today. This book truly …
Michael Wickens: Macroeconomic Theory - CORE
this theory to the stock, bond, and foreign exchange markets. A helpful general reference for the basic concepts of the theory of finance covered here is Ingersoll (1987). An excellent recent …
Lecture 2 Dynamic stochastic general equilibrium (DSGE) models …
How to solve a general model? The algorithm for solving dynamic stochastic general equilibrium (DSGE) models generally consists of the following steps: Step 1. Derive the rst-order …
A Macroeconomic Approach to Optimal Unemployment Insurance: Theory …
macroeconomic theory is general equilibrium because it considers the effects of UI on labor supply, labor demand, and tightness. As UI generally affects tightness and tightness generally …
Dynamic Stochastic General Equilibrium Models as a Tool for …
emergence of dynamic stochastic general equilibrium (DSGE) models. This approach to macroeconomic modelling has gained widespread support among researchers and has …
Introduction To Dynamic Macroeconomic Theory An Overlapping …
Introduction to Dynamic Macroeconomic General Equilibrium Models - Jose Luis Torres Chacon 2015-03-01 This book offers an introductory step-by-step course to Dynamic Stochastic …
Copyrighted Material
of the economy. The outcome was a piecemeal, partial-equilibrium approach to macroeconomics. A corollary of the emphasis on disequilibrium was that equilibrium came to be regarded as a …
General Equilibrium - Stanford University
General equilibrium theory can quickly get into the higher realms of mathemat-ical economics. Nevertheless a lot of the big ideas can be expressed in a simple 5. two-person two-good …
Dynamic General-Equilibrium Models and Why the Bank of
and the term “dynamic general-equilibrium models” (DGEMS) has replaced the earlier “real-business-cycle models” to designate this methodology and the models derived from it. …
Chapter 1 Introduction
model and the overlapping generations model are now used widely in growth theory, as they both are dynamic general equilibrium models, with firm microeconomic foundations. The Keynesian …
Macroeconomics: A Dynamic General Equilibrium Approach
uni–ed micro-founded macroeconomic framework which would allow us to accurately predict the macroeconomic outcomes in response to any external shock (policy-driven or otherwise) led to …
Macroeconomics: A Dynamic General Equilibrium Approach
uni–ed micro-founded macroeconomic framework which would allow us to accurately predict the macroeconomic outcomes in response to any external shock (policy-driven or otherwise) led to …
Macroeconomic Theory - University of Toronto
4.apply theory to predict how fiscal and monetary policies will affect key economic outcomes such as unemployment, aggregate income, and interest rates, 5.explain what Dynamic …
Dynamic Games in Macroeconomics - GitHub Pages
dynamic macroeconomic models with strategically interacting agents and limited commitment begun (and has continued for the last four decades). In subsequent work, Kydland and …
Michael Wickens: Macroeconomic Theory - Princeton University
whether the dynamic behavior of the economy could be explained by the prop-agation of shocks in a flexible-price DGE model, or whether it was necessary to restore elements of market …
Introduction Dynamic Macroeconomic General Equilibrium Models
riod. This approach has been widely used to study the investment function, leading to the so-called Tobin’s Q theory (Tobin, 1969; Ha-yashi, 1982), which allows to study the investment …
Dynamic Macroeconomic Theory
Macroeconomic Theory - De Gruyter Library of Congress Cataloging-in-Publication Data. Wickens, Mike. Macroeconomic theory:a dynamic general equilibrium approach/Michael …
Dynamic Stochastic General Equilibrium: macroeconomics at a …
New Classical Economics and Real Business Cycles theory. RBC, the early version of the Dynamic Stochastic General Equilibrium approach, constitutes also the ‘core’ of the approach. …
Global macroeconomic sustainability: a dynamic general equilibrium approach
Global macroeconomic sustainability: a dynamic general equilibrium approach RALPH W. BAILEY and ROSEMARY CLARKE Department of Economics, Edgbaston, University of Birmingham, …
Macroeconomic Theory: A Dynamic General Equilibrium Approach …
0PT8QC90DIXG / Book Macroeconomic Theory: A Dynamic General Equilibrium Approach (2nd Revised edition) Macroeconomic Theory: A Dynamic General Equilibrium Approach (2nd …
Oxford Review of Economic Policy Volume 34, Nos 1–2 …
The need to change macroeconomic theory is similar to the situation in the 1930s, at the time of the Great Depression, and in the 1970s, when inflationary pressures were unsustainable. ... It …
Introduction to Dynamic Macroeconomic General Equilibrium …
Economic Growth, Dynamic General Equilibrium model-ling. He has published several books and a large number of papers in journals as Infor-mation Economics and Policy, Public Choice, …
Assessing the Social and Macroeconomic Impacts of Labour
a dynamic spatial general equilibrium approach is a particularly helpful tool for policy impact assessment. This study presents the dynamic spatial general equilibrium approach taken in …
CHINAGEM—A Dynamic General Equilibrium Model of China: Theory…
This series has a companion series in SpringerBriefs in Applied General Equilibrium Modeling. The series publishes advances in the theory, application, parameterisation and computation of …
Macroeconomic Theory I (ECOE 60201) - Notre Dame Sites
Macroeconomic Theory I (ECOE 60201) University of Notre Dame Fall 2017 Professor Michael J. Pries Tuesdays and Thursdays, 1:00-3:00pm, 3005 Jenkins-Nanovic Hall Overview This is the …
Macroeconomic Theory - Middle East Technical University
Macroeconomic Theory Dirk Krueger1 Department of Economics University of Pennsylvania January 26, 2012 ... 3.2.4 The Euler Equation Approach and Transversality Condi- ... full …
Optimizing Business Equilibrium Behavior, of Equilibrium, …
macroeconomic theory erected under a general equilibrium framework, materialized in his well known “Expectation and the Neutrality of Money” published in 1972. In this section we also …
Macroeconomic Theory - Social Science Computing Cooperative
Macroeconomic Theory Dirk Krueger1 Department of Economics University of Pennsylvania January 26, 2012 ... 3.2.4 The Euler Equation Approach and Transversality Condi- ... full …
Agent-based Macroeconomics and Dynamic Stochastic General Equilibrium ...
the RA approach may fail to deliver robust predictions given unpredictable changes in behaviour. 2.2 General Equilibrium versus Disequilibrium As their name suggests, DSGE models rely …
Technological Shocks Mechanism On Macroeconomic Variables: A Dynamic ...
Ghanaian economy. The study applies a multi-sector dynamic stochastic general equilibrium (DSGE) model. It features a learning-by-doing mechanism that creates an externality …
Michael Wickens: Macroeconomic Theory
2.2. The Basic Dynamic General Equilibrium Closed Economy 13 used to produce output tomorrow. Today’s investment will add to the capital stock and increase tomorrow’s output. …
Electricity and Firm Productivity: A General-Equilibrium Approach
development literature that draws on dynamic general equilibrium models to understand how the partial equilibrium effects of development policies– informed by reduced-form empirical …
A Macroeconomic Approach to Optimal Unemployment Insurance: Theory
The microeconomic theory of UI is partial equilibrium in that it only considers the effect of UI on the labor supply, taking tightness as given. Our macroeconomic theory is general equilibrium …
Macroeconomic Policy in DSGE and Agent-Based Models
a RBC dynamic stochastic general equilibrium (DSGE) model with monopolistic competition, nominal imperfections and a monetary policy rule (see Clarida et al., 1999; Woodford, 2003; …
UNIT 3 METHODS OF ECONOMIC ANALYSIS - eGyanKosh
3.2 Partial and General Equilibrium Analysis 3.3 Static and Dynamic Method of Analysis 3.4 Construction and Verification of Economic Theories 3.5 Economic Theory and Economic Laws …
Macroeconomics: A Dynamic General Equilibrium Approach
uni–ed micro-founded macroeconomic framework which would allow us to accurately predict the macroeconomic outcomes in response to any external shock (policy-driven or otherwise) led to …
Introduction Dynamic Macroeconomic General Equilibrium Models
riod. This approach has been widely used to study the investment function, leading to the so-called Tobin’s Q theory (Tobin, 1969; Ha-yashi, 1982), which allows to study the investment …
Macroeconomics: A Dynamic General Equilibrium Approach
uni–ed micro-founded macroeconomic framework which would allow us to accurately predict the macroeconomic outcomes in response to any external shock (policy-driven or otherwise) led to …
Macroeconomic Theory A Dynamic General Equilibrium Approach …
Macroeconomic Theory: A Dynamic General Equilibrium Approach (Second Edition) – A Deep Dive Meta Description: Explore the intricacies of macroeconomic theory through a dynamic …
Michael Wickens: Macroeconomic Theory - Princeton University
234 10. Asset Pricing and Macroeconomics absence of arbitrage opportunities implies that Etri,t+1 r t f +ρ = it, (10.7) where r t f, the return on the risk-free asset, is known with certainty at the …
The Evolution of Macroeconomic Theory and Implications for …
rated developments in macroeconomic theory to that point. THEORETICAL DEVELOPMENTS, 1980-95 Although the monetarist-Keynesian debate on policy questions continued in ... In any …
