[PDF] Essays In Macroeconomic Theory And Optimal Policies eBook

Author : Boris Chafwehé
Publisher : Presses universitaires de Louvain
Page : 238 pages
File Size : 18,64 MB
Release : 2021-04-01
Category : Business & Economics
ISBN : 9782390611202

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This thesis contributes to modern macroeconomic theory. It is composed of three chapters that investigate the role of household heterogeneity and the design of monetary and fiscal policies in shaping macroeconomic outcomes. The first chapter studies the link between labour market risks and equilibrium in the market for durable goods. It develops a quantitative model in which households optimally choose nondurable consumption, the accumulation of durable goods, and holdings of financial assets. The model is used to show that, when unemployment risk increases, precautionary savings motives and the implied portfolio rebalancing towards liquid assets lead to decreases in the resale price of durables, a feature that is consistent with empirical observations. The second chapter investigates the properties of optimal taxes and transfers in a framework where household heterogeneity is explicitly accounted for. We describe how the introduction of heterogeneity alters the prescriptions of the model when compared to its representative agent counterpart. We also propose an empirical application of the theory to show that heterogeneity brings the model predictions closer to their counterpart in the data. The third chapter proposes a framework of optimal monetary policy in the case where government debt sustainability may be a constraint for the central bank. In the case where optimal policy exhibits «debt concerns» monetary policy becomes subservient to fiscal policy, and needs to partially give up on the objective of stabilizing inflation and the output gap. We link our results to the ones obtained in the literature on monetary and fiscal policy interactions, in which policies are usually summarized by exogenous feedback-rules. Applications of our theory to concrete policy scenarios are also provided.

Author : George Bitros
Publisher : Edward Elgar Publishing
Page : 328 pages
File Size : 35,66 MB
Release : 2002-01-01
Category : Business & Economics
ISBN : 9781782543602

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The distinguished contributors in this volume provide a variety of essays, which are written in honor of Emmanuel Drandakis. These essays fall into four uniform areas of economics: economic growth, general equilibrium, labor economics and game theory and applications. The editors focus on a select set of issues that stand high on the agenda of academic research. They provide fresh insights and approaches to the analysis of these issues, and thus open up wider avenues for our understanding of the dilemmas posed for theory and policy. Readers are offered new empirical evidence on such thorny social problems as, for example, unemployment, the intergenerational transmission of human capital and the response of wages to price and endowment changes.

Author : K. Vela Velupillai
Publisher : Routledge
Page : 328 pages
File Size : 38,75 MB
Release : 2004-04-22
Category : Business & Economics
ISBN : 1134358717

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Jean-Paul Fitoussi needs no introduction as one of the world's foremost Macroeconomists of his generation. This celebration of his work includes contributions from Nobel Prize - winning economists Robert W. Clower and Robert Solow as well as Olivier Blanchard and leading economic theorist, Edmond Malinvaud.

Author : Vincent Crawford
Publisher : Routledge
Page : 102 pages
File Size : 45,71 MB
Release : 2015-08-11
Category : Business & Economics
ISBN : 1317511069

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Essays in Economic Theory, first published in 1983, combines two essays on game theory and its applications in economics. The first, "Learning Behavior and the Noncooperative Equilibrium", considers whether an adaptive justification, like those commonly available for the optimization models frequently employed elsewhere in economics, can be found for the Nash noncooperative equilibrium. The second essay, "A Game of Fair Division", was motivated by the desire to find attractive methods for solving allocation problems and bargaining disputes that are simple enough to provide useful alternatives to existing methods. It studies in detail one such simple method: the classical "divide-and-choose" procedure. This book will be of interest to students of economics.

Author : Antoine Camous
Publisher :
Page : 114 pages
File Size : 22,58 MB
Release : 2015
Category : Fiscal policy
ISBN :

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This thesis investigates the design of appropriate institutions to ensure the good conduct of fiscal and monetary policy. The three chapters develop theoretical frameworks to address the time-inconsistency of policy plans or prevent the occurrence of self-fulfilling prophecies. Time-inconsistency refers to a situation where preferences over policy change over time. Optimal policy plans are not credible, since agents anticipate the implementation of another policy in the future. This issue is particularly pervasive to monetary policy, since nominal quantities (price level, interest rates, etc.) are very sensitive to expected policies, but predetermined to actual policy choices. The first chapter investigates how fiscal policy can mitigate the inflation bias of monetary policy in an economy with heterogeneous agents. Whenever there is a desire for redistribution, progressive fiscal helps to implement a policy mix less biased toward inflation. Importantly, even the richest supports some fiscal progressivity, since over their life cycle, they benefit from a more balanced policy-mix. A self-fulfilling prophecy, or coordination failure, refers to a situation where a more desirable economic outcome could be reached, but fail to be, by the only effect of pessimistic expectations. Self-fulfilling debt crises are a classical example: pessimistic investors bid down the price of debt, which increases the likelihood of default, which in turn justifies the initial decrease in price. The second chapter, co-authored with Russell Cooper, asks whether monetary policy can deter self-fulfilling debt crises. The analysis shows how a counter-cyclical inflation policy with commitment is effective in doing so. Importantly, it can be implemented without endangering the primary objective of monetary policy, to deliver an inflation target for instance. The third chapter, co-authored with Andrew Gimber, revisits the classic Laffer curve coordination failure: taxes could be low, but they are high because agents anticipate high tax rates. In a dynamic environment with debt issuance, the multiplicity of equilibria critically depends on inherited debt. At high levels of public debt, fiscal policy is pro-cyclical: taxes increase when output decreases, and self-fulfilling fiscal crisis can occur. Overall, this chapter sheds light on the perils of high level of public debt.

Author : Athanasios Asimakopulos
Publisher : McGill-Queen's Press - MQUP
Page : 291 pages
File Size : 20,98 MB
Release : 1991-02-01
Category : Business & Economics
ISBN : 0773563032

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Economic Theory, Welfare, and the State looks at how economic theory can be used to investigate and analyse the operations of market economies and to provide the basis for improvements in government policy-making. The collection begins with two chapters on the history of economic thought, followed by an exploration of possible areas of conflict between the interests of groups and individuals, and an insightful blend of economic history and economic theory that sheds light on the Canadian government's policy of settling the Prairies by providing land grants. Also included are a critical analysis of rational expectations models and their use in econometrics, an examination of why money should be treated as a public good, and two contributions on international trade theory. Two chapters deal with the problem of maintaining satisfactory levels of employment and three chapters examine different aspects of public pensions. Among the contributors to this volume are a former teacher of Weldon's, his fellow students and colleagues, and former students. They are Louis Ascah, Athanasios Asimakopulos, Clarence Lyle Barber, Kenneth E. Boulding, John Burbidge, Robert D. Cairns, John S. Chipman, John H. Dales, Christopher Green, Peter Howitt, Murray C. Kemp, Gideon Rosenbluth, Robin Rowley, Thomas K. Rymes, David Schwartzman, Dan Usher, and Shigemi Yabuuchi.

Author : François Courtoy
Publisher : Presses universitaires de Louvain
Page : 0 pages
File Size : 45,92 MB
Release : 2022-08-04
Category : Business & Economics
ISBN : 9782390612391

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This thesis contributes to two fields of macroeconomics. The first two chapters contribute to the literature that investigates the role of household heterogeneity, in terms of marginal propensity to consume and labor income, for the 'optimal' design of fiscal policies. The first chapter explores how the introduction of household heterogeneity alters the prescriptions derived from the standard optimal fiscal policy framework that only accounts for a representative agent. When heterogeneity is accounted for the government uses taxation and transfers as a redistributing device that only partially corrects for fluctuations in income inequality. The second chapter builds on the results of the first. It develops a quantitative model that is estimated with US data on income and consumption dispersion among households. The model is then used to assess the relevance of the actual US fiscal policy. Unexpectedly, it concludes that the US fiscal policy is close to optimal. The third chapter contributes to the literature that is at the crossroad of the fields of history of macroeconomics and of macroeconomic pedagogy. It aims at reflecting on the theory used in the first two chapters of the thesis and in the teaching of macroeconomics. It identifies and discuss the deep methodological discrepancy between the theory used in research and graduate macroeconomics courses, on the one hand, and in undergraduate macroeconomic courses, in the other hand.

Author : Bhaskar Dutta
Publisher : Oxford University Press, USA
Page : 294 pages
File Size : 29,97 MB
Release : 1990
Category : Business & Economics
ISBN :

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Each of the fifteen contributions to this volume explores a particular area of economic theory, presenting fresh insights and analyses. The first three chapters, on macroeconomics and policy, study the effects of wage-cuts, administered prices, deficit financing and other monetary measures taken by the government. Part II discusses the economics of equilibrium and welfare, analysing the implications for decentralization in growth models with non-equilibrium prices. In Part III on economic growth, the question of decentralization is addressed from a different perspective. Part IV examines industrial organization - the effect of innovation incentives; the pros and cons of restrictions on firms entering an industry; and the question of competitive reward schemes within organizations. Finally, there are three studies in international economics: on the relationship between the terms of trade and the real income of an LDC which is trading with a developed country; the problems with traditional theories of devaluation when applied to LDCs; and the effects of free trade on unemployment.