Introduction to Dynamic Macroeconomic Theory: An Overlapping Generations ApproachEconomies 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. |
From inside the book
Results 1-3 of 67
... borrowing and lending , r ( t ) , must be equal to the rate of return on government bonds , 1 / p ( t ) . We consider what must be true if it is not . When r ( t ) is greater than 1 / p ( t ) , then the return on government bonds is ...
... borrowing market and to use the revenues from the borrowing to purchase government bonds . A profit of 1 / p ( t ) r ... lending . Individuals are indifferent between private lending and lending to the government ( purchasing government ...
... lenders to behave differently . Let us consider borrowers and lenders separately . Borrowers , those who choose ch ( t ) > wh ( t ) , are only in the market for private borrowing and lending . Because the interest rate they pay on borrowing ...
Contents
Describing the Environment | 5 |
Competitive Equilibrium | 32 |
Introducing a Government | 55 |
Copyright | |
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