Author: Jinill Kim
Publisher:
ISBN:
Category : Equilibrium (Economics)
Languages : en
Pages : 48

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Author: Keith R. McLaren
Publisher:
ISBN: 9780642100979
Category : Equilibrium (Economics)
Languages : en
Pages : 49

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Author: Daniel Piazolo
Publisher:
ISBN:
Category : Saving and investment
Languages : en
Pages : 50

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Author: Gunnar Tersman
Publisher: International Monetary Fund
ISBN: 1451946139
Category : Business & Economics
Languages : en
Pages : 34

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This paper studies the volatility of consumption relative to output in the context of a simple general equilibrium model of a small open economy subject to exogenous shocks in productivity. With infinite horizons and exogenous relative prices, the model generates variance estimates that are well above what can be observed in empirical data. While finite horizons and endogenous terms of trade reduce the volatility of consumption, the model fails to generate sufficient serial correlation with respect to the consumption growth rate. If the household’s decision problem is modified to take into account durability and adjustment costs, the model does well on both dimensions.

Author: Fischer S. Black
Publisher: MIT Press
ISBN: 0262514095
Category : Business & Economics
Languages : en
Pages : 361

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Book Description
An incisive, unconventional assessment of general equilibrium theory; with a previously unpublished paper. Fischer Black is known for his brilliance as well as his sometimes controversial opinions. Highly respected for his scholarly writings in finance, he now moves into different territory with this incisive, unconventional assessment of general equilibrium theory and what that theory reveals about business cycles, growth, and labor economics. The general equilibrium approach, Black asserts, can be used to explain most of the economy's behavior. It can explain business cycles and growth without using sticky prices, irrationality, economies of scale, or imperfect competition. It can explain the volatility of consumption, output, sales, investment, and inventories with axiomatic utility and constant-returns-to-scale production. It can explain temporary layoffs, job changes with and without intervening unemployment, and the behavior of vacancies. It can explain lower wages in part-time jobs, wages that increase rapidly with time on the job, and the forces that cause migration from poor to rich countries. Although the general equilibrium approach can't be tested in conventional ways, it can be used to generate examples that explain stylized facts—generalized observations from the real world—that have preoccupied macroeconomists for the last decade. Black contrasts his interpretation of these facts with conventional interpretations. Finally, he reviews a substantial body of literature on these topics.

Author: Henk Don
Publisher: Springer Science & Business Media
ISBN: 9401579083
Category : Business & Economics
Languages : en
Pages : 192

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Book Description
Over the last decade or so, applied general equilibrium models have rapidly become a major tool for policy advice on issues regarding allocation and efficiency, most notably taxes and tariffs. This reflects the power of the general equilibrium approach to allocative questions and the capability of today's applied models to come up with realistic answers. However, it by no means implies that the theoretical, practical and empirical problems faced by researchers in applied modelling have all been solved in a satisfactory way. Rather, a promising field of research has been opened up, inviting theorists and practitioners to further explore and exploit its potential. The state of the art in applied general equilibrium modelling is reflected in this volume. The introductory Chapter (Part I) evaluates the use of economic modelling to address policy questions, and discusses the advantages and disadvantages of applied general equilibrium models. Three substantive issues are dealt with in Chapters 2-8: Tax Reform and Capital (Part II), Intertemporal Aspects and Expectations (Part III), and Taxes and the Labour Market (Part IV). While all parts contain results relevant for economic policy, it is clear that theory and applications for these areas are in different stages of development. We hope that this book will bring inspiration, insight and information to researchers, students and policy advisors.

Author: Jose Luis Torres Chacon
Publisher: Vernon Press
ISBN: 9781622730254
Category :
Languages : en
Pages : 270

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Book Description
This book offers an introductory step-by-step course to Dynamic Stochastic General Equilibrium modelling. Modern macroeconomic analysis is increasingly concerned with the construction, calibration and/or estimation and simulation of Dynamic General Equilibrium (DGE) models. The book is intended for graduate students as an introductory course to DGE modelling and for those economists who would like a hands-on approach to learning the basics of modern dynamic macroeconomic modelling. The book starts with the simplest canonical neoclassical DGE model and then gradually extends the basic framework incorporating a variety of additional features, such as consumption habit formation, investment adjustment cost, investment-specific technological change, taxes, public capital, household production, non-ricardian agents, monopolistic competition, etc. The book includes Dynare codes for the models developed that can be downloaded from the book's homepage.

Author: Marc A. C. Hafstead
Publisher: Stanford University
ISBN:
Category :
Languages : en
Pages : 211

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This dissertation focuses on the consequences of labor market policies, environmental cap-and-trade policies, and monetary policy. These three types of economic policies are admittedly very distinct, but they are tied together by the type of analysis I employ to study these policies. For each, I develop a specific general equilibrium model aimed at highlighting the policy in question and use cutting-edge computational methods to numerically solve the model across an array of potential policies. In the first chapter, The Distributional Effects of Labor Adjustment Cost Policies, I introduce a general equilibrium model with heterogeneous plants and labor adjustment costs to explore both the aggregate and distributional effects of labor adjustment costs. I use the model to analyze the effects of policies that would repeal all or half of state-mandated firing costs in European countries. The model predicts that a full repeal of state-mandated firing costs in the average European country would increase aggregate labor productivity by 0.7%-6.2% while increasing the rate of job turnover by 65%-420%. In the second chapter, Emissions Allowance Allocation in Cap-and-Trade Policies, I present a version of "Impacts of Alternative Emissions Allowance Allocation Methods Under a Federal Cap-and-Trade Program", co-written with Lawrence H. Goulder and Michael Dworsky, published in the Journal of Environmental Economics and Management, Volume 60, Issue 3, November 2010, pages 161-181. To examine the implications of alternative allowance allocation designs for industry profits and GDP under a federal cap-and-trade program to reduce greenhouse gas emissions, we employ a general equilibrium model of the U.S. economy with a unique treatment of capital dynamics that permits close attention to profit impacts. Effects on profits depend critically on the relative reliance on auctioning or free allocation of allowances. Freely allocating fewer than 15\% of the emissions allowances generally suffices to prevent profit losses in the most vulnerable U.S. industries. Freely allocating all of the allowances substantially overcompensates these industries. When emissions allowances are auctioned and the proceeds are employed to finance cuts in income tax rates, GDP costs are about 33 percent lower than when all the allowances are freely allocated. The results are robust to policies differing in stringency, the availability of offsets, and the opportunities for intertemporal trading of allowances. In the final chapter, I present \textit{Interbank Lending and Monetary Policy in a DSGE Model}, which was written with Josephine Smith. We build a DSGE model with heterogeneous banks and interbank lending to explore how monetary policy should respond to shocks in the interbank lending market. To do this, we build upon the Bernanke, Gertler, and Gilchrist \citeyear{bgg1999} model of the financial accelerator by introducing a monopolistically competitive banking sector. The model is the first of its kind to include a monopolistically competitive banking sector, heterogeneous banks, and an interbank lending market. We find that the heterogeneous monopolistically competitive banking sector mitigates macroeconomic variance in the model relative to a perfectly competitive banking sector. Multiple banks that imperfectly compete with each other can help absorb shocks better than a single representative bank and mitigate the financial accelerator effect. We also find that financial supply side shocks, as measured by shocks to the productivity of bank loan production, have a much greater effect on the real economy than the demand-side financial shocks. In addition, we find that shocks to the ex-ante most productive banks have a larger effect on the real economy than shocks to the ex-ante least productive banks because the banks with high productivity (ex-ante) have a larger share of the financial market. Analyzing the effect of shocks to interbank lending rates (relative to the central bank policy rate), we find large macroeconomic effects of such policies. Finally, we find that a monetary policy interest rate rule that incorporates the financial sector can actually dampen the effects of traditional non-financial shocks such as productivity, government spending, and monetary policy shocks and leads to a significant decrease in business-cycle volatility.

Author: Luis Serven
Publisher: World Bank Publications
ISBN:
Category : Investments
Languages : en
Pages : 47

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Author: Rochelle Mary Edge
Publisher:
ISBN:
Category : Macroeconomics
Languages : en
Pages : 68

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"This paper uses a dynamic general-equilibrium model with a nominal tax system to consider the effects of temporary partial expensing allowances on investment and other macroeconomic aggregates"--Abstract.