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Alogoskoufis George. Dynamic Macroeconomics. The MIT Press,2019. — 800 p.. 2019

This textbook offers an advanced treatment of modern macroeconomics, presented through a sequence of dynamic general equilibrium models based on intertemporal optimization on the part of economic agents. The book treats macroeconomics as applied and policy-oriented general equilibrium analysis, examining a number of models, each of which is suitable for investigating specific issues but may be unsuitable for others. After presenting a brief survey of the evolution of macroeconomics and the key facts about long-run economic growth and aggregate fluctuations, the book introduces the main elements of the intertemporal approach through a series of two-period competitive general equilibrium models—the simplest possible intertemporal models. This sets the stage for the remainder of the book,...

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Contents
List of Figures and Table
Preface
1 Introduction
Macroeconomics focuses on the analysis of economies in their entirety.
The Nature and Evolution of Macroeconomics
Key Facts about Long-Run Economic Growth
Key Facts about Aggregate Fluctuations
Conclusion
2 The Intertemporal Approach
The intertemporal approach is the dominant theoretical approach in modern macroeconomics.
Models, Variables, and Functions
Savings and Investment in a Two-Period Competitive Model
Consumption and Labor Supply in a One-Period Competitive Model
Consumption and Labor Supply in a Two-Period Competitive Model
Money, Prices, and Inflation in a Two-Period Competitive Model
Fiscal Policy in a Two-Period Competitive Model
The Treatment of Time and the Intertemporal Approach
Conclusion
3 Savings, Investment, and Economic Growth
In this chapter, we go beyond the two-period model and begin our investigation of the determinants of long-run economic growth in economies that exist for a large number of periods.
The Solow Growth Model
Competitive Markets, the Real Interest Rate, and Real Wages
The Savings Rate and the Golden Rule
Total Factor Productivity and Population Growth
Speed of Convergence toward the Balanced Growth Path
The Process of Economic Growth and the Solow Model
Convergence with a Cobb-Douglas Production Function
Dynamic Simulations of a Calibrated Solow Model
Conclusion
4 The Representative Household Model of Optimal Growth
The representative household class of models is a family of dynamic general equilibrium models that is based on the assumption that the dynamic path of aggregate consumption is decided in an optimal fashion by identical households.
The Optimal Intertemporal Path of Consumption
The Ramsey Model of Economic Growth
Dynamic Adjustment and the Balanced Growth Path
Properties of the Adjustment Path and the Speed of Convergence
Dynamic Simulations of a Calibrated Ramsey Model
Conclusion
5 Overlapping Generations Models of Growth
The representative household model is based on the assumption that all households are identical and that they internalize the welfare of future generations.
The Diamond Model
The Blanchard-Weil Model
Dynamic Simulations of a Calibrated Blanchard-Weil Model
Conclusion
6 Fiscal Policy and Economic Growth
This chapter introduces the government into the exogenous growth models we have analyzed so far.
The Government Budget Constraint
Ricardian Equivalence and the Ramsey Model
Dynamic Effects of Fiscal Policy in the Blanchard-Weil Model
Dynamic Effects of Distortionary Taxation
Conclusion
7 Money, Inflation, and Economic Growth
In the long-run growth models we have presented so far, there is no role for money.
Private Consumption and Money Demand in a Representative Household Model
Aggregate Capital Accumulation in a Ramsey Model with Money
Effects of the Growth Rate of the Money Supply in the Ramsey Monetary Model
Effects of Monetary Growth in an OLG Model
Conclusion
8 Externalities, Human Capital, and Technical Progress
In this chapter, we examine growth models in which the efficiency of labor is no longer entirely exogenous, but may be influenced by positive externalities from the accumulation of physical capital,
Externalities from Capital Accumulation and Economic Growth
Investment in Human Capital and Economic Growth
Ideas, Innovations, and Technical Progress
Unified Growth Theory and the Transition from Stagnation to Growth
Institutions and Long-Run Growth
The New Stylized Facts of Economic Growth
Conclusion
9 Dynamic Stochastic Models under Rational Expectations
In this chapter, we consider uncertainty about the future, the concept of dynamic stochastic models, and the hypothesis of rational expectations.
A Stochastic Expectational Model of a Competitive Market
Rational Expectations for Linear Autoregressive Processes
Second-Order Linear Expectational Models
Multivariate Linear Models with Rational Expectations
Rational Expectations and Learning
Conclusion
10 Consumption and Portfolio Choice under Uncertainty
In this chapter, we examine dynamic models of consumer choice under uncertainty.
Consumption and Portfolio Choice
Full Analysis of Consumption and Portfolio Choice
Precautionary Savings and Borrowing Constraints
Conclusion
11 Investment and the Cost of Capital
In this chapter, we turn to the investment decisions of firms and discuss the main neoclassical model of investment under convex adjustment costs.
Optimal Investment with Convex Adjustment Costs
Optimal Investment under Uncertainty
Conclusion
12 Money, Interest, and Prices
The existence of money in a modern economy is usually taken for granted.
The Functions of Money
The Supply of Money and Central Banks
The Demand for Money
Nominal Interest Rates and Short-Run Equilibrium in the Money Market
The Long-Run Neutrality of Money
Money and the Price Level in Dynamic General Equilibrium Models
Nominal and Real Interest Rates and the Money Supply
Interest Rate Pegging and Price Level Indeterminacy
Money Growth, Seigniorage, and Inflation
Conclusion
13 The Stochastic Growth Model of Aggregate Fluctuations
In previous chapters, we studied the long-run evolution of output and consumption, real interest rates and real wages, and the long-run evolution of the price level and inflation.
The Stochastic Growth Model
A Simplified Version of the Stochastic Growth Model
A Log-Linear Approximation to the General Stochastic Growth Model
Solving the Log-Linear Stochastic Growth Model
Conclusion
14 Perfectly Competitive Models with Flexible Prices
This chapter introduces a perfectly competitive model of aggregate fluctuations, in which there is no capital accumulation.
A Perfectly Competitive Model without Capital
Monetary Factorsin a Perfectly Competitive Model
Imperfect Information and the Nonneutrality of Money
Conclusion
15 Keynesian Models and the Phillips Curve
As already noted, following the Great Depression of the 1930s, the analysis of aggregate fluctuations evolved into macroeconomics, on the basis of Keynesian models.
The Original Keynesian Models
The Samuelson Multiplier Accelerator Model
The Theory of Discretionary Monetary and Fiscal Policy
The Phillips Curve and Inflationary Expectations
The Natural Rate of Unemployment and Aggregate Demand Policies
Conclusion
16 A Model of Imperfect Competition and Staggered Pricing
The perfectly competitive new classical models that we analyzed in chapters 13 and 14 are examples of DSGE models in which wages and prices are perfectly flexible and equilibrate both the product and labor markets.
An Imperfectly Competitive Model of Aggregate Fluctuations
Staggered Price Adjustment and Aggregate Fluctuations
The Rotemberg Model of Convex Costs of Price Adjustment
Conclusion
17 A Model of Unemployment and Nominal Wage Contracts
The explanation of unemployment and its cyclical fluctuations is one of the central tasks of macroeconomics.
Alternative Views of the Labor Market and Equilibrium Unemployment
Households and Optimal Consumption and Money Demand
Firms and Optimal Pricing and Production
Wage Setting and Employment in a Model with Insiders and Outsiders
The Implications of Staggered Pricing
An Extended New Keynesian Phillips Curve: Combining Staggered Pricing with Periodic Nominal Wage Contracts
Inflation and Aggregate Fluctuations under a Taylor Rule
The Optimal Taylor Rule
A Dynamic Simulation of the Effects of Monetary and Real Shocks
Conclusion
18 Matching Frictions and Equilibrium Unemployment
In this chapter, we delve deeper into the microeconomic foundations of models of the determination of the equilibrium (or natural) unemployment rate, assuming that there are matching frictions in the labor market.
The Matching Function
Flows into and out of Employment, Equilibrium Unemployment, and the Beveridge Curve
Firms and the Creation of Vacancies
The Behavior of Unemployed Job Seekers
Wage Bargaining and the Wage Equation
Wage Determination and Equilibrium Unemployment
Determinants of Equilibrium Unemployment, Real Wages, and Labor Market Tightness
18.8 Dynamic Adjustment to the Steady State
Matching Models and Nominal Rigidities
Conclusion
19 The Macroeconomic Implications of Financial Frictions
Before the 2008–2009 crisis, financial market frictions were relatively downplayed in dynamic macroeconomics.
The Role of Finance and Financial Markets
Financial Frictions in a New Keynesian Model with Staggered Pricing
Financial Frictions in a Model with Unemployment Persistence and Nominal Wage Contracts
Conclusion
20 The Role of Monetary Policy
Up to this point in our analysis, we have mostly treated monetary and fiscal variables as exogenous parameters or as determined on the basis of exogenously given policy rules.
Rules versus Discretion in Monetary Policy
Rules, Discretion, and Credibility in a New Keynesian Model
Optimal Monetary Policy in the Presence of Stochastic Shocks
The Mechanics of Monetary Policy
Optimal Monetary Policy and the Taylor Rule
Monetary Policy Shocks and the Optimal Policy Rule
Monetary Policy, Financial Frictions, and the Zero Lower Bound on Interest Rates
Conclusion
21 Fiscal Policy and Government Debt
In this chapter, we revisit the role of fiscal policy in macroeconomics, focusing on the government budget constraint and the effects of alternative methods of financing government expenditure, such as taxes and government debt.
Tax Smoothing and Government Debt Accumulation
Keynesian Stabilization Policy, Automatic Stabilizers, and Fiscal Implications of the Zero Lower Bound
Optimal Dynamic Ramsey Taxation
Fiscal Policy and Politics
The Burden of High Government Deficits and Debt
Conclusion
22 Bubbles, Multiple Equilibria, and Sunspots
In most of the models analyzed so far, we have concentrated on unique steady states and unique convergent paths toward the steady state.
Bubbles in Linear Rational Expectations Models
Bubbles in Models of Stock and Money Markets
Ruling Out Unstable Bubbles
Indeterminacy, Self-Fulfilling Prophecies, and Sunspots
Conclusion
23 The Interaction of Events and Ideas in Dynamic Macroeconomics
In this final chapter, we discuss recent developments in the interaction of events and ideas and assess their role for the evolution of macroeconomics.
The Financial Crisis and Recent Developments in Dynamic Macroeconomics
The Interaction of Events and Ideas and the Role of Empirical Macroeconomics
Policy Evaluation and DSGE Models
Conclusion
APPENDIXES
Appendix A: Variables, Functions, and Optimization
Appendix B: Linear Models and Linear Algebra
Appendix C: Ordinary Differential Equations
Appendix D: Difference Equations
Appendix E: Methods of Intertemporal Optimization
Appendix F: Random Variables and Stochastic Processes
References
Index
More economic literature on Economics.Studio

Books and textbooks on the discipline Macroeconomics:

  1. Abel A.B., Bernanke B., Croushore D.. Macroeconomics. 10th Edition, Global Edition. — Pearson,2021. — 690 pp. - 2021 ãîä
  2. Agarwal Vanita. Macroeconomics: Theory & Policy. Pearson,2010. — 408 p. - 2010 ãîä
  3. Acemoglu D.. Introduction to Modern Economic Growth. Princeton University Press,2008. — 1248 p. - 2008 ãîä
  4. Acemoglu Daron. Introduction to Modern Economic Growth: Parts 1-4. Department of Economics, Massachusetts Institute of Technology,2008. — 604 p. - 2008 ãîä
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