The economics of inaction : stochastic control models with fixed costs / Nancy L. Stokey.

Format:

Book

Author/Creator:

Stokey, Nancy L.

Language:

English

Subjects (All):

Econometric models.

Brownian movements.

Physical Description:

1 online resource (321 p.)

Edition:

Course Book

Place of Publication:

Princeton : Princeton University Press, c2009.

Language Note:

English

Summary:

In economic situations where action entails a fixed cost, inaction is the norm. Action is taken infrequently, and adjustments are large when they occur. Interest in economic models that exhibit ''lumpy'' behavior of this kind has exploded in recent years, spurred by growing evidence that it is typical in many important economic decisions, including price setting, investment, hiring, durable goods purchases, and portfolio management. In The Economics of Inaction, leading economist Nancy Stokey shows how the tools of stochastic control can be applied to dynamic problems of decision making under uncertainty when fixed costs are present. Stokey provides a self-contained, rigorous, and clear treatment of two types of models, impulse and instantaneous control. She presents the relevant results about Brownian motion and other diffusion processes, develops methods for analyzing each type of problem, and discusses applications to price setting, investment, and durable goods purchases. This authoritative book will be essential reading for graduate students and researchers in macroeconomics.

Contents:

Frontmatter

Contents

Preface

1. Introduction

Part I. Mathematical Preliminaries

Part II. Impulse Control Models

Part III. Instantaneous Control Models

Part IV. Aggregation

A. Continuous Stochastic Processes

B. Optional Stopping Theorem

References

Index

Notes:

Description based upon print version of record.

Includes bibliographical references (p. 295-302) and index.

ISBN:

9786612158735

9781282158733

1282158732

9781400829811

140082981X

OCLC:

440772484