Methods of macroeconomic dynamics. 2nd. ed.

1.1 The Evolution of Macrodynamics
1.2 Scope of the Book
1.3 Outline of the Book

I TRADITIONAL MACRODYNAMICS

2.1 Some Preliminary Concepts
2.2 The Output Market
2.3 The Financial Sector
2.4 Equilibrium in Product and Money Markets
2.5 The Supply Function
2.6 The Phillips Curve
2.7 Dynamics of Asset Accumulation
2.8 Expectations
2.9 A Complete Dynamic Macro Model
2.10 Fixed Real Stock of Money Policy
2.11 Constant Rate of Nominal Monetary Growth Policy
2.12 Fixed Real Stock of Government Bonds Policy
2.13 Conclusions: Some Methodological Remarks

II RATIONAL EXPECTATIONS

3.1 The Rational Expectations Hypothesis
3.2 Specification of Expectations in Continuous-Time Models
3.3 The Cagan Monetary Model
3.4 Forward-Looking Solution to Cagan Model
3.5 Discrete-Time Cagan Model
3.6 Bubbles
3.7 Learning

4.1 The Lucas Supply Function
4.2 A Complete Rational Expectations Macro Model
4.3 The Lucas Critique and Policy Neutrality
4.4 Robustness of Policy Neutrality Proposition
4.5 Full Information Level of Output
4.6 Alternative Information Set
4.7 Persistence of Shocks and Business Cycles
4.8 Conclusions

5.1 The Taylor Model
5.2 Nonuniqueness Due to Policy
5.3 Critique of Minimum Variance Criterion
5.4 The Minimum State Representation Solution
5.5 Some Objections to the Minimum State Representation Solution
5.6 Characterization of Solutions of General Rational Expectations Systems
5.7 A Nonlinear Macrodynamic Model
5.8 Endogeneity of Coefficients
5.9 Some Final Comments

6.1 Wage Indexation
6.2 Monetary Instrument Problem
6.3 Generalized Disturbances and the Role of Information
6.4 A Rational Expectations Model of a Small Open Economy
6.5 General Solution
6.6 Jointly Optimal Wage Indexation and Monetary Policies
6.7 The Barro-Gordon Model
6.8 Conclusions

7.1 Saddlepoint Behavior
7.2 Example 1: Cagan Model with Sluggish Wages
7.3 Example 2: Term Structure of Interest Rates
7.4 Example 3: Exchange Rate Dynamics
Appendix

III INTERTEMPORAL OPTIMIZATION

8.1 Introduction
8.2 The Framework and Macroeconomic Equilibrium
8.3 Sustainability of Equilibrium
8.4 Unanticipated Permanent Increase in Government Expenditure
8.5 Temporary Increase in Government Expenditure
8.6 Government Expenditure as a Productive Input
8.7 Term Structure of Interest Rates
8.8 Money in the Utility Function
8.9 Population Growth
8.10 The Representative Agent Model: Some Caveats
Appendix

9.1 Introduction
9.2 The Macroeconomic Structure
9.3 Perfect Foresight Equilibrium
9.4 Determination of Optimality Conditions for Households
9.5 Determination of Optimality Conditions for Firms
9.6 Equilibrium Structure and Dynamics of System
9.7 Steady State
9.8 Characterization of Alternative Steady States
9.9 Dynamic Response to Monetary Expansion
9.10 Interior Debt-Equity Ratio
9.11 A Final Comment

10.1 Introduction
10.2 The Framework
10.3 Macroeconomic Equilibrium
10.4 Steady-State Effects
10.5 Transitional Dynamics
10.6 The Dynamics of Policy Shocks
10.7 Short-Run Effects of Increases in Tax Rates
10.8 Tax Incidence

11.1 Introduction
11.2 Basic Monetary Model
11.3 Real Model of Capital Accumulation
11.4 Some Extensions

12.1 A Simplified Intertemporal Model
12.2 Optimal Government Policies: A General Characterization
12.3 Optimal Monetary Growth
12.4 Optimal Monetary-Fiscal Package
12.5 Recent Developments in Optimal Monetary Policy
12.6 Optimal Taxation of Capital
12.7 Externalities and Optimal Taxation of Capital
12.8 Dynamic Inconsistency

IV ENDOGENOUS GROWTH MODELS

13.1 Introduction and Overview
13.2 Externalities and Ongoing Growth
13.3 Integrated Fiscal Policy and Endogenous Growth
13.4 A Linear Endogenous Growth Model
13.5 Productive Government Expenditure
13.6 Tax Policy, Growth, and Government Budget Balance
13.7 Long-run Balance, Welfare, and Optimal Fiscal Policy
13.8 Endogenous Labor Supply
13.9 Conclusions
Appendix

14.1 Public and Private Capital
14.2 Two-Sector Model and Endogenous Growth
14.3 The Ortigueira-Santos Model
14.4 Non-Scale Models of Economic Growth
14.5 A One-Sector NonScale Model
14.6 A General Two-Sector Model of Growth
14.7 Some Final Comments

V CONTINUOUS-TIME STOCHASTIC MODELS

15.1 Introduction
15.2 Some Basic Results from Continuous-Time Stochastic Calculus
15.3 A Basic Stochastic Intertemporal Model
15.4 Two Examples
15.5 Proportional Disturbances and Stochastic Growth
15.6 Some Extensions
15.7 Some Previous Applications of Continuous-Time Stochastic Methods to Economics
15.8 Real Business Cycle Model
Appendix

16.1 Introduction
16.2 The Analytical Framework
16.3 Macroeconomic Equilibrium
16.4 Equilibrium Properties
16.5 Risk and the Equilibrium Growth Rate
16.6 Applications to Issues in International Finance
16.7 Monetary Policy and Optimal Exchange Rate Management
16.8 Optimal Debt Policy

References

Name Index

Subject Index