Models for Dynamic Macroeconomics.

Format:

Book

Author/Creator:

Bagliano, Fabio C.

Contributor:

Bertola, Giuseppe.

Language:

English

Subjects (All):

Electronic books. -- local.

Macroeconomics--Mathematical models.

Macroeconomics--Methodology.

Local Subjects:

Electronic books. -- local.

Macroeconomics--Mathematical models.

Macroeconomics--Methodology.

Physical Description:

1 online resource (290 p.)

Place of Publication:

Oxford : OUP Oxford, 2007.

Language Note:

English

Summary:

Dynamic Approaches to Macroeconomics provides the advanced student with key methodological tools for the dynamic analysis of a core selection of macroeconomic phenomena, including consumption and investment choices, employment and unemployment outcomes, and economic growth.; The technical treatment of these tools will enable the student to handle current journal literature, while not assuming any particular familiarity with advanced analytical tools or mathematical notions. As these tools are introduced, they are related to particular applications to illustrate their use.; Chapters are linked by various formal and substantive threads. Discrete-time optimization under uncertainty, introduced in Chapter 1, is motivated and discussed by applications to consumption theory, with particular attention to empirical implementation. Chapter 2 focuses on continuous-time optimization techniques, and discusses the relevant insights in the context of partial-equilibrium investment models. Chapter 3 revisits many of the previous chapters' formal derivations with applications to dynamic labour demand, in comparison to optimal investment models, and characterizes labor market equilibrium when not only individual firms' labor demand, but also individual labor supply by workers, is subject to adjustment costs. Chapter 4 proposes broader applications of methods introduced in the previous chapters and studies continuous-time equilibrium dynamics of representative agent economies, featuring both consumption and investment choices, with applications to long-run growth frameworks of analysis. Chapter 5 illustrates the role of decentralized trading in determining aggregate equilibria, and characterizes aggregate labor market dynamics in the presence of frictional unemploymen; By bridging the gap between undergraduate economics and modern microfounded macroeconomic research, this book will be of interest to graduate students in economics, and as a technical reference for economic researchers.

Contents:

CONTENTS; LIST OF FIGURES; 1 Dynamic Consumption Theory; 1.1 Permanent Income and Optimal Consumption; 1.1.1 Optimal consumption dynamics; 1.1.2 Consumption level and dynamics; 1.1.3 Dynamics of income, consumption, and saving; 1.1.4 Consumption, saving, and current income; 1.2 Empirical Issues; 1.2.1 Excess sensitivity of consumption to current income; 1.2.2 Relative variability of income and consumption; 1.2.3 Joint dynamics of income and saving; 1.3 The Role of Precautionary Saving; 1.3.1 Microeconomic foundations; 1.3.2 Implications for the consumption function

1.4 Consumption and Financial Returns1.4.1 Empirical implications of the CCAPM; 1.4.2 Extension: the habit formation hypothesis; Appendix A1: Dynamic Programming; Review Exercises; Further Reading; References; 2 Dynamic Models of Investment; 2.1 Convex Adjustment Costs; 2.2 Continuous-Time Optimization; 2.2.1 Characterizing optimal investment; 2.3 Steady-State and Adjustment Paths; 2.4 The Value of Capital and Future Cash Flows; 2.5 Average Value of Capital; 2.6 A Dynamic IS-LM Model; 2.7 Linear Adjustment Costs; 2.8 Irreversible Investment Under Uncertainty; 2.8.1 Stochastic calculus

2.8.2 Optimization under uncertainty and irreversibilityAppendix A2: Hamiltonian Optimization Methods; Review Exercises; Further Reading; References; 3 Adjustment Costs in the Labor Market; 3.1 Hiring and Firing Costs; 3.1.1 Optimal hiring and firing; 3.2 The Dynamics of Employment; 3.3 Average Long-Run Effects; 3.3.1 Average employment; 3.3.2 Average profits; 3.4 Adjustment Costs and Labor Allocation; 3.4.1 Dynamic wage differentials; Appendix A3: (Two-State) Markov Processes; Exercises; Further Reading; References; 4 Growth in Dynamic General Equilibrium; 4.1 Production, Savings, and Growth

4.1.1 Balanced growth4.1.2 Unlimited accumulation; 4.2 Dynamic Optimization; 4.2.1 Economic interpretation and optimal growth; 4.2.2 Steady state and convergence; 4.2.3 Unlimited optimal accumulation; 4.3 Decentralized Production and Investment Decisions; 4.3.1 Optimal growth; 4.4 Measurement of "Progress": The Solow Residual; 4.5 Endogenous Growth and Market Imperfections; 4.5.1 Production and non-rival factors; 4.5.2 Involuntary technological progress; 4.5.3 Scientific research; 4.5.4 Human capital; 4.5.5 Government expenditure and growth; 4.5.6 Monopoly power and private innovations

Review ExercisesFurther Reading; References; 5 Coordination and Externalities in Macroeconomics; 5.1 Trading Externalities and Multiple Equilibria; 5.1.1 Structure of the model; 5.1.2 Solution and characterization; 5.2 A Search Model of Money; 5.2.1 The structure of the economy; 5.2.2 Optimal strategies and equilibria; 5.2.3 Implications; 5.3 Search Externalities in the Labor Market; 5.3.1 Frictional unemployment; 5.3.2 The dynamics of unemployment; 5.3.3 Job availability; 5.3.4 Wage determination and the steady state; 5.4 Dynamics; 5.4.1 Market tightness; 5.4.2 The steady state and dynamics

5.5 Externalities and efficiency

Notes:

Description based upon print version of record.

ISBN:

1-281-19075-6

0-19-153293-2

OCLC:

213466813