Stochastic Dynamic Macroeconomics Theory and Empirical Evidence

by Gong, Gang; Semmler, Willi

• ISBN13: 9780195301625
• ISBN10: 0195301625
• Format: Hardcover
• Copyright: 2006-01-19
• Publisher: Oxford University Press

Summary

"This book is an important addition to the macroeconomics literature. The authors first argue that the DGE paradigm fails to resolve some important issues in macroeconomics. They then develop a framework that preserves the view of intertemporal behaviour of economic agents but that doesn't presume the clearing of all markets, thereby integrating the idea of non-clearing markets into an intertemporal framework. The framework of the Keynesian tradition of non-clearing markets-resulting from nominal rigidities-is skilfully applied to show that non-clearing labour markets can also result from intertemporal behaviour. Moreover, in the book demand shocks-in contrast to supply shocks as the DGE assumes-again find an important role for macroeconomic fluctuations."

Author Biography

Gang Gong is Associate Professor of Economics and Management at Tsinghua University in Beijing, China, and co-author of The Forces of Economic Growth (2005).
Willi Semmler is Professor of Economics at New School University, at the Center for Empirical Macroeconomics at Bielefeld University, and Research Fellow at the Bernard Schwartz Center for Economic Policy Analysis. He is the author of Asset Prices, Booms, and Recessions (2003), co-author of The Forces of Economic Growth (2005), Dynamic Macroeconomics (1997), Disequilibrium, Growth, and Labor Market Dynamics (2001), Monetary and Fiscal Policy in the Euro-area (2005); editor of Monetary Policy and Unemployment: US, Euro-Area and Japan, (2005) and co-editor of the series Dynamic Modelling and Econometrics in Economics and Finance.

Table of Contents

Introduction and Overview	3	(10)
Part I. Solution and Estimation of Stochastic Dynamic Models
1. Solution Methods of Stochastic Dynamic Models	13	(20)
2. Solving a Prototype Stochastic Dynamic Model	33	(18)
3. Estimating and Evaluating the Stochastic Dynamic Model	51	(12)
Part II. The Standard Stochastic Dynamic Optimization Model
4. Real Business Cycles: Theory and Solutions	63	(18)
5. Empirics of the Standard Real Business Cycle Model	81	(16)
6. Asset Market Implications of Real Business Cycles	97	(16)
Part III. Beyond the Standard Model: Model Variants with Keynesian Features
7. Multiple Equilibria and History Dependence	113	(14)
8. Business Cycles with a Nonclearing Labor Market	127	(34)
9. Monopolistic Competition, Nonclearing Markets, and Technology Shocks	161	(14)
10. Reflections and Conclusions	175	(4)
Notes	179	(10)
Bibliography	189	(12)
Index	201