Handbook of Computable General Equilibrium Modeling

The New Keynesian Approach to Dynamic General Equilibrium Modeling: Models, Methods and Macroeconomic Policy Evaluation Sebastian Schmidt, Volker Wieland Abstract This chapter aims to provide a hands-on approach to New Keynesian models ...

Handbook of Computable General Equilibrium Modeling

Top scholars synthesize and analyze scholarship on this widely used tool of policy analysis in 27 articles, setting forth its accomplishments, difficulties, and means of implementation. Though CGE modeling does not play a prominent role in top U.S. graduate schools, it is employed universally in the development of economic policy. This collection is particularly important because it presents a history of modeling applications and examines competing points of view. Presents coherent summaries of CGE theories that inform major model types Covers the construction of CGE databases, model solving, and computer-assisted interpretation of results Shows how CGE modeling has made a contribution to economic policy

Post Walrasian Macroeconomics

This book thus provides the reader with an introduction to what might be called a Post Walrasian research program that is developing as the antithesis of the Walrasian DSGE synthesis.

Post Walrasian Macroeconomics

Macroeconomics is evolving in an almost dialectic fashion. The latest evolution is the development of a new synthesis that combines insights of new classical, new Keynesian and real business cycle traditions into a dynamic, stochastic general equilibrium (DSGE) model that serves as a foundation for thinking about macro policy. That new synthesis has opened up the door to a new antithesis, which is being driven by advances in computing power and analytic techniques. This new synthesis is coalescing around developments in complexity theory, automated general to specific econometric modeling, agent-based models, and non-linear and statistical dynamical models. This book thus provides the reader with an introduction to what might be called a Post Walrasian research program that is developing as the antithesis of the Walrasian DSGE synthesis.

Handbook of Macroeconomics

The new Keynesian approach to dynamic general equilibrium modeling: models, methods and macroeconomic policy evaluation. In: Dixon, P.B., Jorgenson, D.W. (Eds.), Handbook of Computable General Equilibrium Modeling.

Handbook of Macroeconomics

Handbook of Macroeconomics surveys all major advances in macroeconomic scholarship since the publication of Volume 1 (1999), carefully distinguishing between empirical, theoretical, methodological, and policy issues. It courageously examines why existing models failed during the financial crisis, and also addresses well-deserved criticism head on. With contributions from the world's chief macroeconomists, its reevaluation of macroeconomic scholarship and speculation on its future constitute an investment worth making. Serves a double role as a textbook for macroeconomics courses and as a gateway for students to the latest research Acts as a one-of-a-kind resource as no major collections of macroeconomic essays have been published in the last decade

The Oxford Handbook of the Economics of Central Banking

The New Keynesian Approach to Dynamic General Equilibrium Modeling: Models, Methods and Macroeconomic Policy Evaluation, Vol. 1 of Handbook of Computable General Equilibrium Modeling, edited by P. Dixon and D. Jorgenson, 1439–1512.

The Oxford Handbook of the Economics of Central Banking

The economic influence of central banks has received ever more attention given their centrality during the financial crises that led to the Great Recession, strains in the European Union, and the challenges to the Euro. The Oxford Handbook of the Economics of Central Banking reflects the state of the art in the theory and practice and covers a wide range of topics that will provide insight to students, scholars, and practitioners. As an up to date reference of the current and potential challenges faced by central banks in the conduct of monetary policy and in the search for the maintenance of financial system stability, this Oxford Handbook covers a wide range of essential issues. The first section provides insights into central bank governance, the differing degrees of central bank independence, and the internal dynamics of their decision making. The next section focuses on questions of whether central banks can ameliorate fiscal burdens, various strategies to affect monetary policy, and how the global financial crisis affected the relationship between the traditional focus on inflation targeting and unconventional policy instruments such as quantitative easing (QE), foreign exchange market interventions, negative interest rates, and forward guidance. The next two sections turn to central bank communications and management of expectations and then mechanisms of policy transmission. The fifth part explores the challenges of recent developments in the economy and debates about the roles central banks should play, focusing on micro- and macro-prudential arguments. The implications of recent developments for policy modeling are covered in the last section. The breadth and depth enhances understanding of the challenges and opportunities facing central banks.

Foundations of Modern Macroeconomics

The New Keynesian approach to dynamic general equilbrium modeling: Models, methods, and macroeconomic policy evaluation. In Dixon, P. B. and Jorgenson, D. W., editors, Handbook of Computable General Equilibrium Modeling.

Foundations of Modern Macroeconomics

The study of macroeconomics can seem a daunting project. The field is complex and sometimes poorly defined and there are a variety of competing approaches. It is easy for the senior bachelor and starting master student to get lost in the forest of macroeconomics and the mathematics it uses extensively. Foundations of Modern Macroeconomics is a guide book for the interested and ambitious student. Non-partisan in its approach, it deals with all the major topics, summarising the important approaches and providing the reader with a coherent angle on all aspects of macroeconomic thought. Each chapter deals with a separate area of macroeconomics, and each contains a summary section of key points and a further reading list. Using nothing more than undergraduate mathematical skills, it takes the student from basic IS-LM style macro models to the state of the art literature on Dynamic Stochastic General Equilibrium, explaining the mathematical tricks used where they are first introduced. Fully updated and substantially revised, this third edition of Foundations of Modern Macroeconomics now includes brand new chapters covering highly topical subjects such as dynamic programming, competitive risk sharing equilibria and the New Keynesian DSGE approach.

Handbook of Economic Forecasting

An optimization-based econometric framework for the evaluation of monetary policy. NBER Macroeconomics Annual 12 ... The New Keynesian approach to Dynamic General Equilibrium Modeling: Models, methods and macroeconomic policy evalation.

Handbook of Economic Forecasting

The highly prized ability to make financial plans with some certainty about the future comes from the core fields of economics. In recent years the availability of more data, analytical tools of greater precision, and ex post studies of business decisions have increased demand for information about economic forecasting. Volumes 2A and 2B, which follows Nobel laureate Clive Granger's Volume 1 (2006), concentrate on two major subjects. Volume 2A covers innovations in methodologies, specifically macroforecasting and forecasting financial variables. Volume 2B investigates commercial applications, with sections on forecasters' objectives and methodologies. Experts provide surveys of a large range of literature scattered across applied and theoretical statistics journals as well as econometrics and empirical economics journals. The Handbook of Economic Forecasting Volumes 2A and 2B provide a unique compilation of chapters giving a coherent overview of forecasting theory and applications in one place and with up-to-date accounts of all major conceptual issues. Focuses on innovation in economic forecasting via industry applications Presents coherent summaries of subjects in economic forecasting that stretch from methodologies to applications Makes details about economic forecasting accessible to scholars in fields outside economics

Double Dividend

Schmidt, Sebastian, and Volker Wieland. 2012. The New Keynesian Approach to Dynamic General Equilibrium Modeling: Models, Methods, and Macroeconomic Policy Evaluation. Ch. 22 in Dixon and Jorgenson 2012, 1439–1512. Schreyer, Paul. 2001.

Double Dividend

A rigorous and innovative approach for integrating environmental policies and fiscal reform for the U.S. economy. Energy utilization, especially from fossil fuels, creates hidden costs in the form of pollution and environmental damages. The costs are well documented but are hidden in the sense that they occur outside the market, are not reflected in market prices, and are not taken into account by energy users. Double Dividend presents a novel method for designing environmental taxes that correct market prices so that they reflect the true cost of energy. The resulting revenue can be used in reducing the burden of the overall tax system and improving the performance of the economy, creating the double dividend of the title. The authors simulate the impact of environmental taxes on the U.S. economy using their Intertemporal General Equilibrium Model (IGEM). This highly innovative model incorporates expectations about future prices and policies. The model is estimated econometrically from an extensive 50-year dataset to incorporate the heterogeneity of producers and consumers. This approach generates confidence intervals for the outcomes of changes in economic policies, a new feature for models used in analyzing energy and environmental policies. These outcomes include the welfare impacts on individual households, distinguished by demographic characteristics, and for society as a whole, decomposed between efficiency and equity.

Macroprudential Banking Supervision Monetary Policy

The New Keynesian Approach to Dynamic General Equilibrium Modeling: Models, Methods and Macroeconomic Policy Evaluation, IMFS Working Paper Series, No. 52. Schmukler, Sergio L. (2004). Benefits and Risks of Financial Globalization: ...

Macroprudential Banking Supervision   Monetary Policy

The European experience suggests that the efforts made to achieve an efficient trade-off between monetary policy and prudential supervision ultimately failed. The severity of the global crisis have pushed central banks to explore innovative tools—within or beyond their statutory constraints—capable of restoring the smooth functioning of the financial cycle, including setting macroprudential policy instruments in the regulatory toolkit. But macroprudential and monetary policies, by sharing multiple transmission channels, may interact—and conflict—with each other. Such conflicts may represent not only an economic challenge in the pursuit of price and financial stability, but also a legal uncertainty characterizing the regulatory developments of the EU macroprudential and monetary frameworks. In analyzing the “legal interaction” between the two frameworks in the EU, this book seeks to provide evidence of the inconsistencies associated with the structural separation of macroprudential and monetary frameworks, shedding light upon the legal instruments that could reconcile any potential policy inconsistency.

Economic Growth

This is a book on deterministic and stochastic Growth Theory and the computational methods needed to produce numerical solutions.

Economic Growth

This is a book on deterministic and stochastic Growth Theory and the computational methods needed to produce numerical solutions. Exogenous and endogenous growth models are thoroughly reviewed. Special attention is paid to the use of these models for fiscal and monetary policy analysis. Modern Business Cycle Theory, the New Keynesian Macroeconomics, the class of Dynamic Stochastic General Equilibrium models, can be all considered as special cases of models of economic growth, and they can be analyzed by the theoretical and numerical procedures provided in the textbook. Analytical discussions are presented in full detail. The book is self contained and it is designed so that the student advances in the theoretical and the computational issues in parallel. EXCEL and Matlab files are provided on an accompanying website to illustrate theoretical results as well as to simulate the effects of economic policy interventions.

Getting it Wrong

However, the opposing New Keynesian approach advocates models with sticky prices, consistent with the assumption of ... cycle theory (i.e., the “dynamic stochastic general equilibrium” framework) and combines it with Keynesian features, ...

Getting it Wrong

A leading economist contends that the recent financial crisis was caused not by the failure of mainstream economics but by corrupted monetary data constructed without reference to economics. Blame for the recent financial crisis and subsequent recession has commonly been assigned to everyone from Wall Street firms to individual homeowners. It has been widely argued that the crisis and recession were caused by “greed” and the failure of mainstream economics. In Getting It Wrong, leading economist William Barnett argues instead that there was too little use of the relevant economics, especially from the literature on economic measurement. Barnett contends that as financial instruments became more complex, the simple-sum monetary aggregation formulas used by central banks, including the U.S. Federal Reserve, became obsolete. Instead, a major increase in public availability of best-practice data was needed. Households, firms, and governments, lacking the requisite information, incorrectly assessed systemic risk and significantly increased their leverage and risk-taking activities. Better financial data, Barnett argues, could have signaled the misperceptions and prevented the erroneous systemic-risk assessments. When extensive, best-practice information is not available from the central bank, increased regulation can constrain the adverse consequences of ill-informed decisions. Instead, there was deregulation. The result, Barnett argues, was a worst-case toxic mix: increasing complexity of financial instruments, inadequate and poor-quality data, and declining regulation. Following his accessible narrative of the deep causes of the crisis and the long history of private and public errors, Barnett provides technical appendixes, containing the mathematical analysis supporting his arguments.

Dynamic Modelling and Control of National Economies 1989

In recent years two major modelling approaches prevailin the field: neo-Keynesian and general equilibrium. ... neo-Keynesian models retain their prestige in forecasting and the analysis of the short- and medium-term macroeconomic policy ...

Dynamic Modelling and Control of National Economies 1989

The Symposium aimed at analysing and solving the various problems of representation and analysis of decision making in economic systems starting from the level of the individual firm and ending up with the complexities of international policy coordination. The papers are grouped into subject areas such as game theory, control methods, international policy coordination and the applications of artificial intelligence and experts systems as a framework in economic modelling and control. The Symposium therefore provides a wide range of important information for those involved or interested in the planning of company and national economics.

Dynamic General Equilibrium Modeling

The New Keynesian Microfoundations. NBER Macroeconomics Annual. Vol. 2. pp. 69-104. Rotemberg, Julio J. and Michael Woodford. 1995. Dynamic General Equilibrium Models with Imperfectly Competitive Product Markets.

Dynamic General Equilibrium Modeling

Modern business cycle theory and growth theory uses stochastic dynamic general equilibrium models. In order to solve these models, economists need to use many mathematical tools. This book presents various methods in order to compute the dynamics of general equilibrium models. In part I, the representative-agent stochastic growth model is solved with the help of value function iteration, linear and linear quadratic approximation methods, parameterised expectations and projection methods. In order to apply these methods, fundamentals from numerical analysis are reviewed in detail. In particular, the book discusses issues that are often neglected in existing work on computational methods, e.g. how to find a good initial value. In part II, the authors discuss methods in order to solve heterogeneous-agent economies. In such economies, the distribution of the individual state variables is endogenous. This part of the book also serves as an introduction to the modern theory of distribution economics. Applications include the dynamics of the income distribution over the business cycle or the overlapping-generations model. In an accompanying home page to this book, computer codes to all applications can be downloaded.

Innovation Entrepreneurship and the Economy in the US China and India

Optimal growth with irreversible investment in a Ramsey model. Econometrica 38 (March) ... The new neoclassical synthesis and the role of monetary policy. ... Dynamic General Equilibrium Modeling—Computational Methods and Applications.

Innovation  Entrepreneurship  and the Economy in the US  China  and India

What drives innovation and entrepreneurship in India, China, and the United States? Our data-rich and evidence-based exploration of relationships among innovation, entrepreneurship, and economic growth yields theoretical models of economic growth in the context of macroeconomic factors. Because we know far too little about the key characteristics of Chinese and Indian entrepreneurs and the ways they innovate, our balanced, systematic comparison of entrepreneurship and innovation results in a new approach to looking at economic growth that can be used to model empirical data from other countries. The importance of innovation and entrepreneurship to any economy has been recognized since the pioneering work of Joseph Schumpeter. Our analysis of the major factors that affect innovation and entrepreneurship in these three parts of the world – US, China and India –provides a comprehensive view of their effects and their likely futures. Looks at elements important for innovation and entrepreneurship and compares them against each other within the three countries Places theoretical modeling of economic growth in the context of the overall macroeconomic factors Explores questions about the relationships among innovation, entrepreneurship and economic growth in China, India and the US

Inflation in China

Classical works in modern macroeconomics and monetary economics (e.g. Walsh, 2003a; Thomas, 2006; Romer, 2006; Mishkin, 2007) emphasize the role of the inflation dynamics model in monetary policy analysis, highlighting its importance in ...

Inflation in China

Inflation plays a central role in macroeconomic and financial policy regulation, and its dynamic formation has gradually become a popular research topic in this field. This book comprehensively studies the dynamic mechanism of inflation in China from the perspective of New Keynesian economics. By combining the dynamic trajectory of price changes since China's reform and opening-up under Deng Xiaoping as well as the underlying economic operating characteristics, the book deploys a multifaceted approach to understand the mechanism of inflation dynamics. The author explores the microfoundations of inflation dynamics, and underlines their importance in the context of modern monetary policy. In particular, he builds upon the traditional New Keynesian Phillips curve to include factors of globalization and financialization within the inflation formation regime of modern China. As the book explores the dynamic mechanism of China's inflation from different perspectives including inflation cycle theory, price index internal conduction, price index chain transmission, capital rotation, and industry inflation mechanisms, international readers will gain a full understanding of China's inflation, monetary policy, and economy.

Applied Methods for Trade Policy Analysis

The chapter develops a dynamic general equilibrium model calibrated to Austrian data . ... More recently , a number of new approaches to the labour market have been generated from the macroeconomic field of New Keynesian Economics .

Applied Methods for Trade Policy Analysis

This book provides a comprehensive introduction to the applied economic modeling of trade policies.

An Encyclopedia of Keynesian Economics Second edition

... 'Modern Forecasting Models in Action: Improving Macroeconomic Analyses at Central Banks', International Journal of Central ... 'RAMSES – A New General Equilibrium Model for Monetary Policy Analysis', Economic Review, 2, Riksbank.

An Encyclopedia of Keynesian Economics  Second edition

Acclaim for the first edition: ÔThis easy-to-read collection . . . tells the whole story. Filled with short, well-written pieces, the encyclopedia covers the names and ideas that preceded Keynes, that carried his work to the center of the profession, and that eventually supplanted him there . . . There are excellent and unexpected articles on the Austrian school, the Lausanne school, and the Ricardo effect. There are well-done pieces on all the basic theoretical models at the heart of Keynesianism . . . [the] volume has been well put together. The editors deserve special praise for letting each contributor tell his own story. Those who oppose KeynesÕs ideas are just as well represented as those who carry the torch for him. This evenhandedness helps to ensure a volume that is truly representative and that will allow its users to get a full picture of the life and times of Keynesian economics.Õ Ð Bradley W. Bateman, Grinnell College, US ÔThe book will also be of some interest to serious scholars, partly because it includes biographies of many economists too young to have been included in the New Palgrave, such as Dornbusch, Fisher, Herschel Grossman, Kregel, Lucas, and Robert Townsend. It also includes some very interesting longer essays.Õ Ð Peter Howitt, The Economic Journal ÔThis book provides an excellent summary of the many strands of ÔKeynesianÕ- style thought both before and after 1936. Its well-considered entries take care to make explicit the assumptions and fundamental points of difference between theories too often concealed by the parents and advocates of specific theories in their zeal to promote the universality of the ideas. There is scarcely an entry that suffers from wordiness and repetition; the readerÕs scarce time is not abused.Õ Ð Elizabeth Webster, Economic Record ÔThis reviewer found using this source exhilarating and endowed with additional interest in view of the 1997 discussion on the inclusion or noninclusion of Keynesian economics in introductory economics textbooks. The editors should be applauded for helping to preserve a part of intellectual heritage.Õ Ð Bogdan Mieczkowski, American Reference Books ÔIt is the best single reference source on Keynesian economics and will be welcomed by students and teachers in economics as well as scholars in related social sciences and government policy makers.Õ Ð Educational Book Review This thoroughly revised and updated second edition of a highly acclaimed and authoritative reference work introduces the major concepts in the field of Keynesian economics. The comprehensive Encyclopedia features accessible, informative and provocative contributions by leading international scholars working in the tradition of Keynes. It brings together widely dispersed yet theoretically congruent ideas, presents concise biographies of economists who have contributed to the debate on Keynes and the Keynesian Revolution, and outlines the basic principles, models and tools used to discuss the economic consequences of The General Theory. Longer entries on specific topics associated with Keynes and the Keynesian Revolution analyse the principal factors that contributed to The General Theory, the economics of Keynes and the rise and apparent decline of Keynesian economics in greater detail. The second edition will ensure that An Encyclopedia of Keynesian Economics will remain the best single reference source on Keynesian economics and will continue to be welcomed by academics, students and teachers of economics as well as by scholars in related social sciences and government policymakers.

Macroeconomics

... of Modern Methods for Policy Analysis William Scarth. systems are referred to as DSGE (standing for dynamic stochastic general equilibrium) models. Sometimes the sticky-price version is referred to as the New Keynesian macro model, ...

Macroeconomics

øThis important textbook offers a comprehensive look into the two main traditions in contemporary macroeconomics _ New Classical and Keynesian _ and examines the work of economists who have drawn on principles from both traditions to form a new, integr

Milton Friedman Robert E Lucas Jr and Edmund S Phelps

Lucas ( 1976 ) argued that traditional ( Keynesian - dominated ) methods of policy evaluation may be misleading as ... dynamic , stochastic general equilibrium models with parameters that are independent of a change in policy regime .

Milton Friedman  Robert E  Lucas  Jr  and Edmund S  Phelps

This groundbreaking series brings together a critical selection of key papers by the Nobel Memorial Laureates in Economics that have helped shape the development and present state of economics. The editors have organised this comprehensive series by theme and each volume focuses on those Laureates working in the same broad area of study. The careful selection of papers within each volume is set in context by an insightful introduction to the Laureates' careers and main published works. This landmark series will be an essential reference for scholars throughout the world.

Advances in Time Series Data Methods in Applied Economic Research

Rules, discretion and reputation in a model of monetary policy. ... American Economic Review, 90(5), 1421–1431. ... non-linear credibility in a dynamic stochastic general equilibrium model: theory and a small computational simulation.

Advances in Time Series Data Methods in Applied Economic Research

This conference proceedings volume presents advanced methods in time series estimation models that are applicable various areas of applied economic research such as international economics, macroeconomics, microeconomics, finance economics and agricultural economics. Featuring contributions presented at the 2018 International Conference on Applied Economics (ICOAE) held in Warsaw, Poland, this book presents contemporary research using applied econometric method for analysis as well as country specific studies with potential implications on economic policy. Applied economics is a rapidly growing field of economics that combines economic theory with econometrics to analyse economic problems of the real world usually with economic policy interest. ICOAE is an annual conference started in 2008 with the aim to bring together economists from different fields of applied economic research in order to share methods and ideas. Approximately 150 papers are submitted each year from about 40 countries around the world. The goal of the conference and the enclosed papers is to allow for an exchange of experiences with different applied econometric methods and to promote joint initiatives among well-established economic fields such as finance, agricultural economics, health economics, education economics, international trade theory and management and marketing strategies. Featuring global contributions, this book will be of interest to researchers, academics, professionals and policy makers in the field of applied economics and econometrics.