Cover: The ABCs of RBCs: An Introduction to Dynamic Macroeconomic Models, from Harvard University PressCover: The ABCs of RBCs in HARDCOVER

The ABCs of RBCs

An Introduction to Dynamic Macroeconomic Models

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HARDCOVER

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$89.00 • £77.95 • €80.95

ISBN 9780674028142

Publication Date: 03/31/2008

Short

448 pages

6-1/8 x 9-1/4 inches

78 line illustrations, 27 tables

World

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  • Preface
  • Introduction
  • Part I. Basic Models and Solution Methods
    • 1. The Basic Solow Model
      • 1.1 The Basic Model
      • 1.2 Technological Growth
      • 1.3 The Golden Rule
      • 1.4 A Stochastic Solow Model
      • 1.5 Log-Linear Version of the Solow Model
        • 1.5.1 Capital
        • 1.5.2 Output
      • 1.6 Reprise
    • 2. Savings in an OLG Model
      • 2.1 The Basic OLG Model
        • 2.1.1 An Example Economy
      • 2.2 Dynamics
      • 2.3 A Stochastic Version
      • 2.4 Reprise
      • 2.5 Matlab Code Used to Produce Figure 2.2
    • 3. Infinitely Lived Agents
      • 3.1 A Robinson Crusoe Economy with Fixed Labor
        • 3.1.1 Variational Methods
      • 3.2 A Robinson Crusoe Economy with Variable Labor
        • 3.2.1 The General Model
        • 3.2.2 Solution for a Sample Economy
      • 3.3 A Competitive Economy
      • 3.4 The Second Welfare Theorem
        • 3.4.1 An Example Where the Representative Agent Economy and the Decentralized Economy Are Not Equal
      • 3.5 Reprise
    • 4. Recursive Deterministic Models
      • 4.1 States and Controls
      • 4.2 The Value Function
      • 4.3 A General Version
      • 4.4 Returning to Our Example Economy
        • 4.4.1 Another Version of the Same Economy
      • 4.5 An Approximation of the Value Function
      • 4.6 An Example with Variable Labor
      • 4.7 Reprise
      • 4.8 Matlab Code for Figures 4.2 and 4.3
    • 5. Recursive Stochastic Models
      • 5.1 Probability
      • 5.2 A Simple Stochastic Growth Model
      • 5.3 A General Version
        • 5.3.1 The Problem of Dimensionality
      • 5.4 The Value Function for the Simple Economy
        • 5.4.1 Calculating the Value Functions
      • 5.5 Markov Chains
      • 5.6 Reprise
      • 5.7 Matlab Code
    • 6. Hansen’s RBC Model
      • 6.1 Hansen’s Basic Model
      • 6.2 Log Linearization Techniques
        • 6.2.1 The Basics of Log Linearization
        • 6.2.2 Uhlig’s Method of Log Linearization
      • 6.3 Log-Linear Version of Hansen’s Model
        • 6.3.1 Solution Using Jump Variables
        • 6.3.2 Calibration of the Log-Linear Model
        • 6.3.3 Variances of the Variables in the Model
      • 6.4 Hansen’s Model with Indivisible Labor
        • 6.4.1 Stationary State
        • 6.4.2 Log-Linear Version of the Indivisible Labor Model
      • 6.5 Impulse Response Functions
      • 6.6 Reprise
      • 6.7 Appendix 1: Solving the Log-Linear Model
      • 6.8 Appendix 2: Blanchard and Kahn’s Solution Method
        • 6.8.1 General Version
        • 6.8.2 Stochastic Shocks
        • 6.8.3 Hansen’s Model and Blanchard-Kahn
        • 6.8.4 The Generalized Schur Method
      • 6.9 Matlab Code
        • 6.9.1 Solution to Basic Hansen Model
        • 6.9.2 Approximating the Variances
        • 6.9.3 Code for Appendix 2
    • 7. Linear Quadratic Dynamic Programming
      • 7.1 Taylor Approximations of the Objective Function
      • 7.2 The Method of Kydland and Prescott
        • 7.2.1 An Example
        • 7.2.2 Solving the Bellman Equation
        • 7.2.3 Calibrating the Example Economy
      • 7.3 Adding Stochastic Shocks
        • 7.3.1 The Example Economy
        • 7.3.2 Calibrating the Example Economy
      • 7.4 Hansen with Indivisible Labor
      • 7.5 Impulse Response Functions
        • 7.5.1 Vector Autoregressions
      • 7.6 An Alternative Process for Technology
      • 7.7 Reprise
      • 7.8 Matlab Code
  • Part II. Extensions of the Basic RBC Model
    • 8. Money: Cash in Advance
      • 8.1 Cooley and Hansen’s Model
      • 8.2 Finding the Stationary State
      • 8.3 Solving the Model Using Linear Quadratic Methods
        • 8.3.1 Finding a Quadratic Objective Function
        • 8.3.2 Finding the Economy Wide Variables
      • 8.4 Solving the Model Using Log Linearization
        • 8.4.1 The Log Linearization
        • 8.4.2 Solving the Log-Linear System
        • 8.4.3 Impulse Response Functions
      • 8.5 Seigniorage
        • 8.5.1 The Model
        • 8.5.2 The Stationary State
        • 8.5.3 Log-Linear Version of the Model
      • 8.6 Reprise
      • 8.7 Appendix 1: CES Utility Functions
      • 8.8 Appendix 2: Matrix Quadratic Equations
      • 8.9 Matlab Code for Solving the CES Model with Seigniorage
    • 9. Money in the Utility Function
      • 9.1 The Model
      • 9.2 Stationary States
      • 9.3 Log-Linear Version of the Model
      • 9.4 Seigniorage
        • 9.4.1 The Full Model
        • 9.4.2 Stationary States
        • 9.4.3 Log Linearization
      • 9.5 Reprise
    • 10. Staggered Pricing Model
      • 10.1 The Basic Model
        • 10.1.1 The Final Goods Firms
        • 10.1.2 The Intermediate Goods Firms
        • 10.1.3 The Family
        • 10.1.4 Equilibrium Conditions
        • 10.1.5 The Full Model
      • 10.2 The Stationary State
      • 10.3 Log Linearization
        • 10.3.1 Log Linearization of the Firm’s Problem
        • 10.3.2 The Final Goods Pricing Rule
        • 10.3.3 The Intermediate Goods Pricing Rule
        • 10.3.4 Inflation Equation (Phillips Curve)
        • 10.3.5 Log Linear Version of the Model
      • 10.4 Solving the Log Linear Model
        • 10.4.1 Impulse Response Functions
      • 10.5 Inflation Adjustment for Nonoptimizing Firms
        • 10.5.1 The Stationary State
        • 10.5.2 Log Linearization
        • 10.5.3 Solving the Model
        • 10.5.4 Impulse Response Functions
      • 10.6 Reprise
    • 11. Staggered Wage Setting
      • 11.1 The Labor Bundler
        • 11.1.1 First-Order Conditions for Families
        • 11.1.2 The Rest of the Model
        • 11.1.3 Equilibrium Conditions
        • 11.1.4 The Full Model
      • 11.2 The Stationary State
      • 11.3 Log Linearization
      • 11.4 Solving the Model
        • 11.4.1 Impulse Response Functions
      • 11.5 Reprise
    • 12. Financial Markets and Monetary Policy
      • 12.1 Working Capital
        • 12.1.1 Households
        • 12.1.2 Firms
        • 12.1.3 Financial Intermediaries
        • 12.1.4 The Full Model
        • 12.1.5 The Stationary State
        • 12.1.6 Log Linear Version of the Model
        • 12.1.7 Impulse Response Functions
        • 12.1.8 Economy with Annual Inflation of 100 Percent
        • 12.1.9 Comparative Impulse Response Functions
      • 12.2 Central Banking and Monetary Policy Rules
        • 12.2.1 The Model with a Taylor Rule
        • 12.2.2 Stationary States
        • 12.2.3 Log-Linear Version and Its Solution
        • 12.2.4 Comparing a Taylor Rule to a Friedman Rule
      • 12.3 Reprise
    • 13. Small Open Economy Models
      • 13.1 The Preliminary Model
        • 13.1.1 The Household
        • 13.1.2 The Firm
        • 13.1.3 Equilibrium Conditions
        • 13.1.4 Stationary State
        • 13.1.5 The Dynamic (Log-Linear) Model
      • 13.2 Model with Capital Adjustment Costs
      • 13.3 Closing the Open Economy
        • 13.3.1 Interest Rates and Country Risk
        • 13.3.2 The Dynamic Version
      • 13.4 The “Closed” Open Economy with Money
        • 13.4.1 The Open Economy Conditions
        • 13.4.2 The Household
        • 13.4.3 Firms
        • 13.4.4 Equilibrium Conditions
        • 13.4.5 The Full Model
        • 13.4.6 The Stationary State
        • 13.4.7 Log-Linear Version of Full Model
      • 13.5 Reprise
  • References
  • Index

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