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 85
... equals the marginal product of labor . Therefore , the wage rate in this economy is equal to - wage ( t ) = ( 1 − a ) y ( t ) L ( t ) ̄aK ( t ) a . ( 9.2 ) In a competitive economy the rental rate on capital is equal to the marginal ...
... equal to 0 for all h . We are restricting individual holdings of capital to be nonnegative , so O is as small as k " ( t + 1 ) can get . Because every member of generation t chooses zero holdings of capital , K ( t + 1 ) also equals 0 ...
... equals .896 ( when rm equals .863 ) . The solution with rm equal to .458 is a situation where those who are not holding bonds would be borrowing . Because they are constrained from doing so , this case cannot be an equilibrium . Reprise ...
Contents
Describing the Environment | 5 |
Competitive Equilibrium | 32 |
Introducing a Government | 55 |
Copyright | |
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