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Dynamic General Equilibrium Modeling: Computational Methods and Applications

Amazon.com Price:  $37.23 (as of 01/05/2019 13:24 PST- Details)

Description

Modern business cycle theory and growth theory uses stochastic dynamic general equilibrium models. With a purpose to solve these models, economists want to use many mathematical tools. This book presents quite a lot of methods With a purpose to compute the dynamics of general equilibrium models. In part I, the representative-agent stochastic growth model is solved with the assistance of value function iteration, linear and linear quadratic approximation methods, parameterised expectations and projection methods. With a purpose to apply these methods, fundamentals from numerical analysis are reviewed in detail. In particular, the book discusses issues that are incessantly neglected in existing work on computational methods, e.g. find out how to find a good initial value.

In part II, the authors discuss methods With a purpose to solve heterogeneous-agent economies. In such economies, the distribution of the individual state variables is endogenous. This a part of the book also serves as an introduction to the brand new theory of distribution economics. Applications include the dynamics of the source of revenue distribution over the business cycle or the overlapping-generations model.

In an accompanying home page to this book, computer codes to all applications will also be downloaded.


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