Macroeconomic Theory A Dynamic General Equilibrium Approach by Michael Wickens

By Michael Wickens

Macroeconomic thought is the main up to date graduate-level macroeconomics textbook on hand this present day. This publication actually deals anything new by way of emphasizing the final equilibrium personality of macroeconomics to provide an explanation for results around the complete financial system, not only half. it's also the appropriate source for economists who have to brush up at the newest developments.
Michael Wickens lays out the middle rules of contemporary macroeconomics and its hyperlinks with finance. He offers the best normal equilibrium macroeconomic version for a closed financial system, after which steadily develops a complete version of the open economic system. each vital subject is roofed, together with progress, enterprise cycles, financial coverage, taxation and debt finance, present account sustainability, exchange-rate choice, and an updated account of financial coverage via inflation concentrating on. Wickens addresses the interrelationships among macroeconomics and sleek finance and exhibits how they have an effect on inventory, bond, and foreign-exchange markets. whereas the math wanted for this ebook is rigorous, the writer describes basic recommendations in a manner that is helping make the e-book self-contained and simple to take advantage of. obtainable, finished, and wide-ranging, Macroeconomic concept turns into the traditional textual content for college kids and is perfect for economists, quite these in govt, principal and advertisement banking, and fiscal investment.
- the main up to date macroeconomics textbook on hand today
- Web-based workouts with solutions (June 2008)
- Emphasis on common equilibrium macroeconomics addresses the total economy
- most modern advances in macroeconomics lined absolutely and completely
- provides updated account of economic policy
- Covers smooth finance
- wide mathematical appendix for at-a-glance effortless reference

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Extra resources for Macroeconomic Theory A Dynamic General Equilibrium Approach

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It is also called a representative-agent model when all economic agents are identical and act as both a household and a firm. Another interpretation of the model is that it can be regarded as referring to a single individual. Consequently, it is sometimes called a Robinson Crusoe economy. Any of these interpretations may prove helpful in understanding the analysis of the model. This model has also formed the basis of modern growth theory (see Cass 1965; Koopmans 1965). Our interest in this model, however interpreted, is to identify and analyze certain key concepts in macroeconomics and key features of the macroeconomy.

4) This is a nonlinear dynamic constraint on the economy. ✐ ✐ ✐ ✐ ✐ ✐ “wickens” — 2007/10/15 — 13:08 — page 14 — #32 ✐ 14 ✐ 2. The Centralized Economy Given an initial stock of capital, kt (the endowment), the economy must choose its preferred level of consumption for period t, namely ct , and capital at the start of period t + 1, namely kt+1 . This can be shown to be equivalent to choosing consumption for periods t, t + 1, t + 2, . . , with the preferred levels of capital, output, investment, and savings for each period obtained from the model.

17), and these concern the capital stock. 10—except the point {c # , k# }—we have ∆kt+1 < 0. At the point {c # , k# } we have ∆kt+1 = 0. This point is therefore an equilibrium, but, as we have seen, it is not a stable equilibrium because achieving maximum consumption at each point in time requires absorbing all positive shocks through higher consumption and all negative shocks by consuming the capital stock, which reduces future consumption. Thus, after a negative shock the economy is unable to regain equilibrium if it continues to consume as required by the golden rule.

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