Topics in Applied Macrodynamic Theory

This insightful book presents topics in applied dynamic macrotheory for closed and open economies. The authors give an advanced treatment of macroeconomic topics such as the Phillips curve, forward and backward looking behavior, open economy macrodynamics, structural macroeconometric model building as well as the empirics of Keynesian oriented macro models. The dynamics of open economies in the context of interacting two country models are treated as well.

This book is about the study of topics in macro dynamics from an applied, empirical perspective. The modeling philosophy behind most of the chapters ofthisbookisofKeynesiannature,representinganattempttorevivethist- oreticalperspectiveontheworkingofthemacroeconomy. Themacroeconomic research pursued here is somewhat di?erent from the mainstream literature using the Dynamic Stochastic General Equilibrium (DSGE) approach as the basic modeling device. The main features of the latter are the assumptions of intertemporally optimizing agents, rational expectations, competitive m- kets and price mediated market clearing through su?ciently ?exible prices and wages. The New Keynesian approach to macroeconomics has, in the last decade or so, to a large extent, also adopted the DSGE framework, building on intertemporally optimizing agents and market clearing, but favoring more the concept of monopolistic competition, sticky wages and prices and nominal as well as real rigidities. An path breaking work of this type is the recent book by Woodford (2003). However, it is well known that the intertemporal approach of smoothly optimizing agents and fast adjustments in order to establish temporal or - tertemporal marginal conditions in the product market, labor and capital markets, has not been very successful to match certain stylized facts on those markets. A further de?ciency of those intertemporal decision models is that macroeconomic feedback e?ectsand their stabilizing or destabilizing impact on the macroeconomyhave rarely been considered in those models. Yet, those feedback mechanisms, relevant for the interaction of all three markets, have been theoretically and empirically explored since the 1930s.

Presents advanced quantitative apporaches to dynamic macromodeling Gives insight into the working and interaction of macrodynamic feedback channels Offers theoretical, empirical and numerical treatment of small and large macromodels Includes supplementary material: sn.pub/extras

Inhalt
Period Models, Continuous Time and Applied Macrodynamics.- Period Models, Continuous Time and Applied Macrodynamics.- The Closed Economy.- The ASAD Framework: Origins, Problems and Progress.- WagePrice Dynamics: Basic Structural Form, Estimation and Analysis.- Estimation and Analysis of an Extended ADAS Model.- Linking Goods with Labor Markets: Okun's Law and Beyond.- The Open Economy.- Exchange Rate and Stock Market Dynamics in a Two-Country Model.- Macroeconomic Imbalances and Inflation Dynamics in a Mundell-Fleming-Tobin Framework.- Currency Crises, Credit Rationing and Monetary Policy in Emerging Markets.- Keynesian Dynamics and International Linkages in a Two-Country Model.- Outlook: Supply Constraints in Demand-Driven Macromodels.