Models for dynamic macroeconomics phần 6 pdf

... these aspects by third parties. Many recent growth models allow for increasing rather than constant returns to scale, and are therefore naturally forced to study markets and productive structures ... ensured that the dynamic path of the economy maximized the welfare of a hypothetical representative agent. In the rest of this chapter we consider models for which the macro- economic d...

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... happens if Î =1and if Î =0? Models for Dynamic Macroeconomics 3 Great Clarendon Street, Oxford ox2 6dp Oxford University Press is a department of the University of Oxford. It furthers the University’s ... Steady-State and Adjustment Paths 60 2.4 The Value of Capital and Future Cash Flows 65 2.5 Average Value of Capital 69 2 .6 A Dynamic IS–LM Model 71 2.7 Linear Adjustment Co...

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... model. 1. A forecasting model for  log c t+1 is specified; vector x t contains only those variables, from the wider information set available to agents at time t, which are relevant for forecasting ... specified, the information set used to form expectations of future incomes and to derive innovations is limited to past income values only. If agents form their expecta- tions using addition...

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... the static models studied in introductory microeconomic courses. As to investment costs, a formal treatment of the problem needs to 2 Dynamic Models of Investment Macroeconomic IS–LM models assign ... than the unavoidable 64 INVESTMENT Figure 2.7. Dynamic effects of an announced future change of w one associated with the initial re-optimization in light of new, unforeseen informati...

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... identity. In more general models, the value of the firm is less intimately linked to its capital stock and therefore may vary independently of optimal investment flows. 2 .6. A Dynamic IS–LM Model We ... general feature of dynamic optimization problems, namely the character of interaction between endogenous capital and exogenous forc- ing variables: the former depends on the whole dynamic...

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... E t+1 [·]is therefore based on a broader information set than that at E t [·]. ³⁴ We could have adopted other conventions for the timing of the exogenous and endogenous stock variables. For example, ... version of the irreversible investment problem solved here. For a very complex model of irreversible investment and dynamic aggregation, and for further references, see Bertola and C...

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... GROWTH 169 McGrattan, E. R., and J. A. Schmidtz, Jr (1999) “Explaining Cross-Country Income Differences,” in J. B.Taylor and M. Woodford (eds.), Handbook of Macroeconomics, vol. 1A, 66 9–7 36, Ams- terdam: ... of Macroeconomics, vol. 1A, 63 7 66 7, Amsterdam: North-Holland. 174 COORDINATION AND EXTERNALITIES Figure 5.1. Stationarity loci for e and c ∗ however, if we limit attention to s...

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... (5. 46) For a given value of Ë, the wage is independent of the unemployment rate. The system can therefore be solved recursively for the endogenous variables u, Ë,andw. Using the definition for ... qualitatively realistic enough to offer practical implications for the dynamics of labor market flows, for the steady state of the economy, and for the dynamic adjustment process towards...

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... OECD from the 1 960 s to the 1990s,” Centre for Economic Performance Dis- cussion Paper 502; forthcoming in P. Aghion, R. Frydman, J. Stiglitz, and M. Woodford (eds.), Knowledge, Information and ... stochastic process for labor income, we have (E t+1 − E t ) y t+1 = ε t+1 , (E t+1 − E t ) y t+2 = −‰ε t+1 , (E t+1 − E t ) y t+i = 0 for i > 2. Applying the general formula for the cha...

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... 132 stationarity, 16 steady-state, 59, 61 , 137 optimal savings, 140 stochastic process, 3, 82 ARMA, 16 Taylor expansion, 118 transversality condition, 4, 53, 54, 59, 60 , 62 , 139, 143 user cost of capital, 61 , ... level of employment, because for c ∗ ≥ 1allproductionoppor- tunities are accepted. The locus of stationary points is thus vertical for c ∗ > 1. The dynamic express...

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