Dynamic Macroeconomic Analysis: Theory and Policy in General Equilibrium

Cambridge University Press
Edition: Illustrated, 11/20/2003
EAN 9780521826686, ISBN10: 0521826683

Hardcover, 604 pages, 25.4 x 17.8 x 3.3 cm
Language: English

Dynamic stochastic general equilibrium (DSGE) models have begun to dominate the field of macroeconomic theory and policy-making. These models describe the evolution of macroeconomic activity as a recursive sequence of outcomes based upon the optimal decision rules of rational households, firms and policy-makers. Whilst posing a micro-founded dynamic optimisation problem for agents under uncertainty, such models have been shown to be both analytically tractable and sufficiently rich for meaningful policy analysis in a wide class of macroeconomic problems, for example, monetary and fiscal policy, economic cycles and growth and capital flows. This volume collects specially commissioned papers from leading researchers, which pull together some of the key results in diverse areas. This book will promote research using optimising models and inform researchers, post-graduate students and economists in policy-oriented organisations of some of the key findings and policy implications.

Foreword William Brock
1. The application of stochastic dynamic programming methods to household consumption and saving decisions
a critical survey Jim Pemberton
2. Investment dynamics Fanny S. Demers, Michael Demers and Sumru Altug
3. Taxes and welfare in a stochastically growing economy Stephen J. Turnovsky
4. Recent developments in the microeconomic stabilisation literature
is price stability a good stabilisation strategy? Matt Canzoneri, Robert Cumby and Behzad Diba
5. On the interaction of monetary and fiscal policy Jagjit Chadha and Charles Nolan
6. Dynamic general equilibrium analysis
the open economy dimension Philip Lane and Giovanni Ganelli
7. Credit frictions and 'sudden stops' in small open economies
an equilibrium business cycle framework for emerging markets crises Cristina Arellano and Enrique Mendoza
8. Asset pricing in macroeconomic models Paul Söderlind
9. Labor market search and monetary shocks Carl Walsh
10. On the introduction of endogenous labor income in deterministic and stochastic endogenous growth models Stephen J. Turnovsky
11. Growth and business cycles Gabriel Talmain.