List of Figures and Table
Figures
1.1 Distribution of countries by per capita GNI, 2012
1.2 Long-run growth of (natural log) per capita GDP in the United Kindom, the United States, and Japan
1.3 Long-run growth of (log) per capita GDP in the major European economies
1.4 Recessions (shaded areas) and (log) per capita GDP in the United States
1.5 Recessions (shaded areas) and (log) per capita GDP in the United Kingdom
1.6 Recessions (shaded areas) and the unemployment rate in the United States
1.7 Recessions (shaded areas) and the unemployment rate in the United Kingdom
1.8 Evolution of the price level in the United States
1.9 Evolution of the price level in the United Kingdom
1.10 Evolution of consumer price index (CPI) inflation in the United States
1.11 Evolution of CPI inflation in the United Kingdom
1.12 Money growth and inflation in 110 countries, 1960–1990
1.13 Money growth and real GDP growth in 110 countries, 1960–1990
1.14 Evolution of US federal debt as a percentage of GDP
1.15 Evolution of UK public debt as a percentage of GDP
2.1 Equilibrium capital accumulation in a two-period economy
2.2 Intertemporal equilibrium in a two-period economy
2.3 Optimal consumption and leisure in a one-period economy
2.4 Income and substitution effects on labor supply
3.1 The production function in intensive form
3.2 Equilibrium in the Solow model
3.3 Determination of the growth rate
3.4 Implications of a rise in the savings rate
3.5 Impulse response function of a rise in the savings rate
3.6 Implications of a rise in total factor productivity
3.7 Implications of a rise in population growth
3.8 Convergence in the Solow model in discrete time
3.9 Impulse response functions of the Solow model following a permanent increase in the savings rate of 1%
3.10 Impulse response functions of the Solow model following a permanent increase in total factor productivity of 1%
3.11 Impulse response functions of the Solow model following a permanent increase in the rate of population growth of 1%
4.1 The balanced growth path and dynamic adjustment in the Ramsey model
4.2 Short- and long-run effects of a permanent increase in the pure rate of time preference
4.3 Impulse response function of consumption and capital stock following a permanent increase at t0 in the pure rate of time preference
4.4 Short- and long-run effects of a permanent increase in total factor productivity
4.5 Effects of a permanent increase in the population growth rate
4.6 Impulse response functions of the calibrated Ramsey model for a 1% permanent drop in the pure rate of time preference
4.7 Impulse response functions of the calibrated Ramsey model for a 1% permanent increase in total factor productivity
5.1 Multiple equilibria in the Diamond model
5.2 Unique balanced growth path in the simplified Diamond model
5.3 Effects of a permanent rise in the pure rate of time preference
5.4 Effects of a permanent rise in total factor productivity
5.5 Impulse response functions of the Diamond model for a permanent rise in the pure rate of time preference of 1%
5.6 Impulse response functions of the Diamond model, for a permanent rise in total factor productivity of 1%
5.7 The balanced growth path and the adjustment path for the Blanchard-Weil model
5.8 Short- and long-run effects of an increase in the pure rate of time preference in the Blanchard-Weil model
5.9 Short- and long-run effects of an increase in the rate of population growth in the Blanchard-Weil model
5.10 Impulse response functions for a 1% increase in the pure rate of time preference in the calibrated Blanchard-Weil model
5.11 Impulse response functions for a 1% increase in the population growth rate in the calibrated Blanchard-Weil model
5.12 Impulse response functions for a 1% increase in total factor productivity in the calibrated Blanchard-Weil model
6.1 Primary government expenditure in the Ramsey model
6.2 Primary government expenditure and debt in the Blanchard-Weil model
6.3 An increase in government debt in the Blanchard-Weil model
6.4 An increase in primary government expenditure in the Blanchard-Weil model
6.5 A tax-financed increase of primary government expenditure in the calibrated Blanchard-Weil model
6.6 A debt-financed increase of primary government expenditure in the calibrated Blanchard-Weil model
6.7 A debt-financed tax cut in the calibrated Blanchard-Weil model
6.8 Short- and long-run effects of capital income taxation in the Ramsey model
6.9 Dynamic effects of a 10% tax on interest income in the calibrated Ramsey model
6.10 Dynamic effects of a 10% tax on business profits, before interest and depreciation, in the calibrated Ramsey model
7.1 The demand for real money balances and the welfare cost of inflation
7.2 The balanced growth path and the adjustment path in the Blanchard-Weil model with money
7.3 Dynamic effects of an increase in the growth rate of money supply in the Blanchard-Weil model with money
7.4 Dynamic simulation of an increase in the growth rate of money supply in a calibrated Blanchard-Weil model with money
8.1 The aggregate production function for different values of β
8.2 Determination of the consumption-to-output ratio and the endogenous growth rate in the Blanchard-Weil model
8.3 Determination of private consumption and the growth rate with government expenditure and debt
8.4 The path of per capita output in exogenous and endogenous growth models
9.1 The cobweb model under adaptive expectations
11.1 Adjustment cost of investment
11.2 Determination of q and the capital stock K
11.3 Dynamic effects of a permanent rise in the real interest rate
11.4 Dynamic effects of a permanent rise in total factor productivity
12.1 The demand for money and the nominal interest rate
12.2 An increase in real income and the demand for money
12.3 Short-run equilibrium in the money market
12.4 The short-run effects of a rise in the money supply: the liquidity effect
12.5 The short-run effects of an exogenous rise in real income
12.6 Equilibrium in the money market with interest rate pegging
12.7 Money demand indeterminacy in the Samuelson OLG model
12.8 The seigniorage Laffer curve
12.9 Equilibrium with high inflation
12.10 Equilibria with high inflation and the transition to hyperinflation
13.1 Dynamic simulation of the stochastic growth model following a 1% persistent shock to productivity
15.1 Exogenous investment and government expenditure: the Keynesian cross
15.2 Aggregate output and the nominal interest rate: the IS-LM model
15.3 Aggregate output and the price level: the AD-AS model
15.4 Aggregate demand disturbances and their effects on aggregate output and the price level
15.5 Aggregate supply disturbances and their effects on aggregate output and the price level
15.6 Convergence of real output for different values of the accelerator
15.7 The Phillips curve
15.8 The Phillips curve and the socially optimal combination of inflation and unemployment
15.9 Shifts of the Phillips curve due to inflationary expectations
15.10 Continuous shifts of the Phillips curve due to rising inflationary expectations
15.11 Determination of steady state inflation and unemployment under discretion and commitment to an inflation rule
16.1 Impulse response functions of the staggered pricing model following a contractionary monetary shock
16.2 Impulse response functions of the staggered pricing model following a positive productivity shock
17.1 Impulse response functions following a 1% unanticipated temporary positive shock to the nominal interest rate
17.2 Impulse response functions following a 1% unanticipated persistent positive shock to productivity
18.1 The Beveridge curve and equilibrium unemployment
18.2 The job creation condition
18.3 The determination of real wages and labor market tightness
18.4 Labor productivity and equilibrium unemployment
18.5 Unemployment benefits and equilibrium unemployment
18.6 The real interest rate and equilibrium unemployment
18.7 The probability of job destruction and equilibrium unemployment
18.8 Dynamic adjustment of unemployment and vacancies
18.9 Dynamic adjustment of unemployment and vacancies to an increase in the job destruction rate
18.10 Dynamic adjustment of unemployment and vacancies to an increase in the replacement rate
18.11 Dynamic adjustment of unemployment and vacancies to an increase in the real interest rate
20.1 Inflation and lack of credibility under a discretionary policy
20.2 The liquidity trap
21.1 Expected default and the debt holding condition
21.2 The actual probability of default and the cumulative distribution of the primary surplus
21.3 Determination of the interest factor and the probability of default for a low rate of return of the safe asset
21.4 Determination of the interest factor and the probability of default for a high rate of return of the safe asset
22.1 Deterministic bubbles
22.2 A stochastically bursting bubble versus a deterministic bubble
22.3 Equilibrium consumption in the Samuelson OLG model
22.4 Saddle point equilibrium money balances in the Samuelson OLG model
22.5 Multiple convergence paths for money balances in the Samuelson OLG model
22.6 Multiple equilibria, sunspots, and cycles in the Samuelson OLG model
A.1 Utility as a function of consumption
A.2 Output as a function of capital and labor
A.3 Isoquants: capital labor combinations that produce given amounts of output
A.4 Output as a function of the capital stock, for a given level of employment of labor
A.5 Utility and marginal utility: the derivative of the utility function
A.6 Stationary points: maxima, minima, and points of inflection
A.7 Maximization with a binding and a nonbinding constraint
A.8 Maximization of consumer utility subject to an income constraint
A.9 Optimal choice of a consumption bundle
F.1 The uniform distribution
F.2 The CDF of the continuous uniform distribution
F.3 The normal distribution
F.4 The CDF of the standard normal distribution
Table
1.1 Per capita GDP and average annual growth rates over time, various countries