Post Walrasian Macroeconomics: Beyond the Dynamic Stochastic General Equilibrium Model

by Edited by David Colander

• ISBN13: 9780521865487
• ISBN10: 0521865484
• Edition: 1st
• Format: Hardcover
• Copyright: 2006-07-17
• Publisher: Cambridge University Press

Summary

Macroeconomics is evolving in an almost dialectic fashion. The latest evolution is the development of a new synthesis that combines insights of new classical, new Keynesian and real business cycle traditions into a dynamic, stochastic general equilibrium (DSGE) model that serves as a foundation for thinking about macro policy. That new synthesis has opened up the door to a new antithesis, which is being driven by advances in computing power and analytic techniques. This new synthesis is coalescing around developments in complexity theory, automated general to specific econometric modeling, agent-based models, and non-linear and statistical dynamical models. This book thus provides the reader with an introduction to what might be called a Post Walrasian research program that is developing as the antithesis of the Walrasian DSGE synthesis. While both the Walrasian and Post Walrasian approaches assume rational agents, they differ in the environment in which they model the interaction of those agents. To make their models tractable the DSGE approach, which is the culmination of the Walrasian modeling tradition, assumes that agents operate in an information-rich environment. The Post Walrasian model, which this collection explores, assumes that agents operate in information-poor environments.

Table of Contents

Part I. Where We Are in Macro and How We Got There: 1. Stories from the haunted vault: notes on a century of macroeconomics

2. Post Walrasian macroeconomics: some historic links

3. The DSGE model and the post Walrasian alternative in historical perspective

4. Who is post Walrasian man?

Part II. Edging Away from the DSGE Model: 5. Social interactions and macroeconomics

6. Macroeconomics and model uncertainty

7. Restricted perceptions equilibria and learning in macroeconomics

8. Not more so: some concepts outside the DSGE framework

Part III. Leaping Away from the DSGE Model: 9. Agent-based computational modeling and macroeconomics

10. Multi-agent systems macro: a prospectus

11. Agent-based financial markets: matching stylized facts with style

Part IV. Doing More Good than Harm: Roles of Business and Government in Critical Infrastructure Protection: 12. Characteristics of resilient systems and organizations

13. Networks and interdependencies

14. Public - private risk-sharing: the case of terrorism risk coverage

15. Learning from experience: drawing correct analogies? Letting the data guide theory

16. The past as the future: the Marshallian approach to post Walrasian macro

17. Old world econometrics and New World theory

18. Four entrenched notions post Walrasians should avoid

19. Confronting the economic model with the data

20. Extracting information from the data: a European view on empirical macro

Part V. Policy Implications: 21. Economic policy in the presence of coordination problems

22. Monetary policy and the limitations of economic knowledge.