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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... reserves . However , a considerable portion of private lending goes through banks . In this model , we impose reserve requirements on all private lending , both to capture the importance banks ( which we do not explicitly model ) and to ...
... reserve requirement ( Equation 12.3 ) is not binding and the demands of members of the economy cannot be fulfilled , so this case cannot be an equilibrium . Consider the case where rm ( t ) = r1 ( t ) . Then individuals are indiffer ...
... reserve requirement . The other four cases follow the normal Bailey curve until the reserve requirement kicks in , and then they follow the dashed line for the reserve requirement λ = .1 , the dotted line for X .2 , the dotted and ...
Contents
Describing the Environment | 5 |
Competitive Equilibrium | 32 |
Introducing a Government | 55 |
Copyright | |
11 other sections not shown