An Introduction to Computational Macroeconomics

Anelí Bongers, Universidad de Málaga, Spain et al.

This book presents an introduction to computational macroeconomics, using a new approach to the study of dynamic macroeconomic models. It solves a variety of models in discrete time numerically, using a Microsoft Excel spreadsheet as a computer tool. The solved models include dynamic macroeconomic models with rational expectations, both non-microfounded and microfounded, constituting a novel approach that facilitates the learning and use of dynamic general equilibrium models, which have now become the principal tool for macroeconomic analysis. Spreadsheets are widely known and relatively easy to use, meaning that the computer skills needed to work with dynamic general equilibrium models are affordable for undergraduate students in Advanced Macroeconomics courses.

Introducción a la Macroeconomía Computacional

Anelí Bongers, Universidad de Málaga, Spain et al.

Este libro presenta una introducción a la macroeconomía computacional, utilizando un nuevo enfoque para el estudio de los modelos macroeconómicos dinámicos. Para ello resolveremos numéricamente una gran variedad de modelos en tiempo discreto, utilizando como herramienta informática una hoja de cálculo; en particular, Excel de Microsoft. Los modelos resueltos incluyen tanto modelos macroeconómicos dinámicos con expectativas racionales no microfundamentados, como modelos microfundamentados, constituyendo un enfoque que facilita el aprendizaje y uso de los modelos de equilibrio general dinámico, los cuales se han convertido en la principal herramienta para el análisis macroeconómico en la actualidad. Las hojas de cálculo son ampliamente conocidas y relativamente fáciles de usar, lo que supone que los conocimientos informáticos necesarios para poder trabajar con modelos de equilibrio general dinámico son asequibles para alumnos de grado.

Introducción a la Macroeconomía Computacional

Anelí Bongers, Universidad de Málaga, Spain et al.

Este libro presenta una introducción a la macroeconomía computacional, utilizando un nuevo enfoque para el estudio de los modelos macroeconómicos dinámicos. Para ello resolveremos numéricamente una gran variedad de modelos en tiempo discreto, utilizando como herramienta informática una hoja de cálculo; en particular, Excel de Microsoft. Los modelos resueltos incluyen tanto modelos macroeconómicos dinámicos con expectativas racionales no microfundamentados, como modelos microfundamentados, constituyendo un enfoque que facilita el aprendizaje y uso de los modelos de equilibrio general dinámico, los cuales se han convertido en la principal herramienta para el análisis macroeconómico en la actualidad. Las hojas de cálculo son ampliamente conocidas y relativamente fáciles de usar, lo que supone que los conocimientos informáticos necesarios para poder trabajar con modelos de equilibrio general dinámico son asequibles para alumnos de grado.

Stock-Flow-Consistent Models and Institutional Variety

Romar Correa, St Andrew’s College, India and Amelia Correa, St Andrew’s College, India

Orthodox macroeconomics is founded on microeconomics. Heterodox economists either reject micro foundations or experiment with behavioural relationships without paying attention to the principles that generate them. The book takes off from Michal Kalecki’s aphorism about economics being a science that confused stocks and flows. Kalecki was famous for presiding over a marriage between Marx and Keynes and all three figure prominently in the volume. However, the first part of the title is a homage to Wynne Godley who pioneered stock-flow-consistent modeling in our times. The authors exploit lagged values of variables emerging from the definitions. Lags also emerge in so-called stock-flow norms connecting the aggregates. Some moving and shaking of identities and a difference or differential equation emerges. The requirements for stability of the dynamic systems are illuminating and the reader can stop at structure and history with the first half of the book. The conversation with orthodoxy begins with the second part. The equivalent equation systems of the first part throw up different pairs of characters whose happiness must be maximised over time. The price to pay through the solution process is the confrontation with many ugly expressions but the explicit calculations are undertaken repeatedly only to reassure students through drillwork that tedium is not the same as difficulty. The payoffs are that variable transitions in capitalism (the second part of the title) are captured from a small clutch of identities. The movements from backward agriculture to capitalism, from ‘golden age’ capitalism to ‘financialization’, are modeled. A separate chapter is devoted to Europe. The policy prescriptions of heterodox economics do not compare with the richness of critique and positive analysis. ‘Positive’ and ‘normative’ are one in this work, the combination of stock-flow norms along with ‘forgotten’ policy variables like the tax rate promising order and stability to economies.

Understanding DSGE models

Theory and Applications

Celso Jose Costa Junior, São Paulo School of Economics, Brazil

While the theoretical development of DSGE models is not overly difficult to understand, practical application remains somewhat complex. The literature on this subject has some significant obscure points. This book can be thought of, firstly, as a tool to overcome initial hurdles with this type of modeling. Secondly, by showcasing concrete applications, it aims to persuade incipient researchers to work with this methodology. In principle, this is not a book on macroeconomics in itself, but on tools used in the construction of this sort of models. It strives to present this technique in a detailed manner, thereby providing a step by step course intended to walk readers through this otherwise daunting process. The book begins with a basic Real Business Cycle model. Subsequently various frictions are gradually incorporated into a standard DSGE model: imperfect competition; frictions in prices and in wages ; habit formation; non-Ricardian agents; adjustment cost in investment; costs of not using the maximum installed capacity; and finally, Government.

Introduction to Dynamic Macroeconomic General Equilibrium Models

José Luis Torres Chacon, Universidad de Málaga, Spain

This book offers an introductory step-by-step course in Dynamic Stochastic General Equilibrium (DSGE) modelling. Modern macroeconomic analysis is increasingly concerned with the construction, calibration and/or estimation and simulation of DSGE models. The book is intended for graduate students as an introductory course to DSGE 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 DSGE 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. The second edition is identical to the first with the exception of a revised appendix to Chapter 2. The revised appendix can be downloaded free of charge in the accompanying downloads section.

Introduction to Dynamic Macroeconomic General Equilibrium Models

José Luis Torres Chacon, Universidad de Málaga, Spain

This book offers an introductory step-by-step course in 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.