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. |
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An Overlapping Generations Approach George T. McCandless, Neil Wallace. Competitive Equilibrium We begin with a general definition of a competitive equilibrium . Definition A competitive equilibrium is a set of prices and quantities that ...
... competitive equilibrium is a sequence of prices ( gross interest rates ) and a consumption allocation in which all individuals maximize utility subject to their budget constraints and all markets clear in every period . Given the assets ...
... competitive equilibrium , we consider two methods of solving for one . Finding a Competitive Equilibrium As before , we use both the guess and verify method and graphical analy- sis to find equilibria . Recall that the guess and verify ...
Contents
Describing the Environment | 5 |
Competitive Equilibrium | 32 |
Introducing a Government | 55 |
Copyright | |
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