Macroeconomics for Mbas and Masters of Finance

by Morris A. Davis

• ISBN13: 9780521762472
• ISBN10: 0521762472
• eBook ISBN(s): 9780511763670, 9781107713369
• Edition: 1st
• Format: Hardcover
• Copyright: 2009-12-14
• Publisher: Cambridge University Press
• More Book Details

Summary

Using a rigorous and concise framework, this book teaches the foundations of modern macroeconomic theory and its methods. It is ideally suited for students taking a first graduate course in macroeconomics as part of an MBA, finance, or economics degree. The book explains recent advances of modern macroeconomic theory with respect to growth, business cycles, and asset pricing by focusing on aspects of firm and household behavior that are embedded in modern macroeconomic studies. Throughout the book data issues are discussed in detail: where to find the data, how to download it, and the correspondence of data with model predictions. The mathematical level assumes that students have taken a course in calculus. With its emphasis on dynamic inter-temporal macroeconomics and the use of data, the book provides students with a core toolkit that will equip them both for more advanced study and for professional careers as economists.

Table of Contents

List of Figures	p. ix
List of Tables	p. xii
Preface	p. xv
Foreword	p. xix
GDP and Inflation	p. 1
Objectives of this Chapter	p. 2
GDP	p. 3
Definition of GDP	p. 3
GDP and Welfare	p. 9
Historical Behavior of Nominal and Real GDP	p. 11
Caveats	p. 15
Components of GDP	p. 15
Private Consumption	p. 16
Private Investment	p. 20
Government Spending	p. 22
Net Exports	p. 25
Miscellany	p. 27
More GDP Accounting	p. 28
Inflation	p. 31
Further Reading	p. 37
Homework	p. 38
Firms and Growth
Objectives of this Chapter
Cobb-Douglas Production	p. 45
Constant Returns to Scale	p. 46
Declining Marginal Products	p. 47
Profit Maximization	p. 48
Optimal Capital	p. 49
Optimal Labor	p. 51
Optimal Profits	p. 51
Growth Accounting	p. 52
Growth in Developed Countries	p. 55
Balanced Growth	p. 56
Growth in Developing Countries	p. 58
Barriers to Growth	p. 60
Measurement of Kt, Lt and zt	p. 68
Measurement of the Capital Stock	p. 68
Measurement of the Labor Input	p. 76
Measurement of Technology	p. 80
Further Reading	p. 83
Homework	p. 84
Households and Asset Pricing	p. 89
Objectives of this Chapter	p. 90
Optimal Labor Supply with No Saving	p. 93
Optimal Consumption and Investment	p. 97
A Two-Period Model	p. 97
Mathematics of the Solution	p. 99
Reinterpreting the Household Budget Constraint	p. 101
Intertemporal Elasticity of Substitution	p. 102
Discussion of Assumptions	p. 104
Discussion of Uncertainty	p. 106
Saving and Investment in Multiple Assets	p. 109
Stocks and Bonds: The Equity Premium Puzzle	p. 109
Housing	p. 118
Optimal Labor, Consumption, Investment	p. 129
Model	p. 129
Calibration	p. 133
Further Reading	p. 134
Homework	p. 136
Trade	p. 141
Objectives of this Chapter	p. 142
Trade of Goods for Goods	p. 144
Current and Capital Accounts	p. 148
Data on Current and Capital Accounts	p. 150
Trade of Goods for Assets	p. 152
Factor Prices and Trade	p. 159
Topics in Exchange Rates	p. 161
Covered Interest Parity	p. 161
Purchasing Power Parity	p. 162
Fisher Equation	p. 163
Further Reading	p. 164
Homework	p. 165
Business Cycles	p. 167
Objectives of this Chapter	p. 168
Business Cycle Dates	p. 169
Trends and Cycles	p. 169
Business Cycle Statistics	p. 178
The Theory of Business Cycles	p. 184
Further Reading	p. 186
Homework	p. 189
Monetary Policy	p. 191
Objectives of this Chapter	p. 192
A Very Brief History of the Federal Reserve	p. 192
The Taylor Rule	p. 196
Monetary Policy and Inflation	p. 201
Further Reading	p. 205
Homework	p. 207
Appendix: Math	p. 209
Objectives of this Appendix	p. 209
Derivatives	p. 209
Derivative of Polynomials	p. 210
Derivative of the Natural Logarithm Function	p. 212
Derivative Approximation to the Natural Logarithm Function	p. 213
Constrained Optimization: Econ 1 Revealed	p. 214
Writing Down and Solving the Problem	p. 215
Notes on the Lagrange Multiplier (¿) and Expenditure Shares	p. 217
Bibliography	p. 219
Index	p. 223
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