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This book sheds new light on the general equilibrium theory of Léon Walras (1834–1910) from a historical perspective. Walras's construction of general equilibrium theory marked the dawn of modern economics, and the theory was greatly developed in the 20th century. However, Walras's own intentions and ideas behind the theory are still not fully understood.This book aims to clarify the intellectual background of Walras's economics by delving into his original writings, which have not received much attention until now. Part 1 of the book reconsiders the relationship between Walras and his predecessors, Adam Smith (1723–1790), Jean-Baptiste Say (1767–1832), and Achylle Nicolas Isnard (1749–1803), who are believed to have had a decisive influence on Walras's general equilibrium theory. In Part 2, the book explores Walras's views on the labor market, entrepreneurship, and non-selfish human nature, including concepts like sympathy, which have been overlooked in his general equilibrium theory and subsequently misunderstood to this day. Walras's economic thought is one of the foundational sources of modern economics. An accurate and in-depth understanding of it will provide a new perspective on the problems faced by modern economics and open future possibilities for economics as a social science. This book offers new insights not only to researchers and students of the history of economics but also to all those interested in the origins of modern economics.

This is the first book that uses the Harris – Todaro (H-T) model to study contemporary economic issues in developing countries, with a particular focus on China. The zenith of research utilizing this model occurred in the 1990s, primarily addressing the impact of economic policies during labor migration on wages and employment across various sectors, international trade, urban unemployment rates, and social welfare. After nearly four decades, research in this area gradually faded from the spotlight. Post-2010, however, there has been a resurgence in H-T model studies. Scholars have begun using this model to explore contemporary issues, revealing unprecedented insights and showcasing its robust applicability and vitality. The book features 13 papers authored by contributors since 2018, each utilizing the H-T model and published in various academic journals. It delves into pivotal issues of contemporary economic development in developing countries like China, including dual agricultural economy, producer services, foreign direct investment, agricultural pollution, migrant workers'remittances, and agricultural human capital investment. The book constructs general equilibrium models by integrating these topics with the H-T model, providing a framework to assess the impact of economic policies. Methodologically, it goes beyond conventional approaches by introducing constant elasticity of substitution functions and other methods to precisely express contemporary economic problems. Numerical simulations to examine the impact of economic policies are also used. Beyond presenting solutions to the current economic problems in developing countries, this book provides academic references for economic theory researchers.

This book shows how such a computational process functions, how great is its power and versatility, since it is possible to show how discoveries are made. In 1759, A. Smith realized that there must exist an additional powerful control mechanism behind Great Britain's authority and government, explaining the extraordinary successes of Great Britain. He called this the Invisible Hand. Despite having used this term only 3 times, the idea evokes extreme scientific and political emotions to this day. If we apply a molecular model of computation, such as in in Adleman's DNA computer, a computational model for the Invisible Hand can be built to show how it affects a society. It is a spontaneous, unconscious, distributed, noncontinuous computational process on the platform of minds of, e.g., people or ants. Knowing this mechanism, a future self-steering and self-optimization system for AI robot teams can be proposed, e.g., for construction sites and rescue operations.

Revised and updated for the 2nd edition, this textbook provides an analysis and investigation of the most essential areas of environmental economic theory and policy, including international environmental problems. The approach is based on standard theoretical tools, in particular equilibrium analysis, and aims to demonstrate how economic principles can help to understand environmental issues and guide policymakers. Current topics including climate change, overfishing and integrated approaches to environmental policies are carefully analyzed in this framework, and a multitude of practical examples from various parts of the world is presented. Addressing undergraduate and graduate students, this book is a must read for everybody interested in a better understanding of environmental economics.

The new edition of a widely used introduction to game theory and its applications, with a focus on economics, business, and politics.This widely used introduction to game theory is rigorous but accessible, unique in its balance between the theoretical and the practical, with examples and applications following almost every theory-driven chapter. In recent years, game theory has become an important methodological tool for all fields of social sciences, biology and computer science. This second edition of Strategies and Games not only takes into account new game theoretical concepts and applications such as bargaining and matching, it also provides an array of chapters on game theory applied to the political arena. New examples, case studies, and applications relevant to a wide range of behavioral disciplines are now included. The authors map out alternate pathways through the book for instructors in economics, business, and political science. The book contains four parts: strategic form games, extensive form games, asymmetric information games, and cooperative games and matching. Theoretical topics include dominance solutions, Nash equilibrium, Condorcet paradox, backward induction, subgame perfection, repeated and dynamic games, Bayes-Nash equilibrium, mechanism design, auction theory, signaling, the Shapley value, and stable matchings. Applications and case studies include OPEC, voting, poison pills, Treasury auctions, trade agreements, pork-barrel spending, climate change, bargaining and audience costs, markets for lemons, and school choice. Each chapter includes concept checks and tallies end-of-chapter problems. An appendix offers a thorough discussion of single-agent decision theory, which underpins game theory.

For all its elaborate theories and models, economics always reduces to comparisons. Should we build A rather than B? Will I be better off if I eat D rather than C? How much will it cost me to produce F instead of E? At root, the ultimate goal of economics is simple: assessing the alternatives and finding the best possible outcome. This basic mathematical concept underlies all introductions to the field of economics, yet as advanced students progress through the discipline, they often lose track of this foundational idea when presented with real-world complications and uncertainty. In Competitive Agents in Certain and Uncertain Markets, Robert G. Chambers develops an integrated analytic framework for treating consumer, producer, and market equilibrium analyses as special cases of a generic optimization problem. He builds on lessons learned by all beginning students of economics to show how basic concepts can still be applied even in complex and highly uncertain conditions. Drawing from optimization theory, Chambers demonstrates how the same unified mathematical framework applies to both stochastic and non-stochastic decision settings. The book borrows from both convex and variational analysis and gives special emphasis to differentiability, conjugacy theory, and Fenchel's Duality Theorem. Throughout, Chambers includes practical examples, problems, and exercises to make abstract material accessible. Bringing together essential theoretical tools for understanding decision-making under uncertainty, Competitive Agents in Certain and Uncertain Markets provides a unified framework for analyzing a broad range of microeconomic decisions. This book will be an invaluable resource for advanced graduate students and scholars of microeconomic theory.

Understanding Economic Equilibrium reveals how all markets fit together, and how we as individuals fit into that bigger picture.Economic agents all over the world are trying to maximize their returns given their efforts, resources, and opportunities. They come together in markets that ultimately allocate goods and services among many competing interests. We can readily see how individual markets behave; it's more difficult, but exponentially more important, to recognize the general equilibrium across all markets. Disturbances in one market have implications for others.These interrelationships are particularly important to understand when policy changes are being considered where actions in one market will impose changes on other markets, and not always in obvious or pleasant ways. Understanding Economic Equilibrium reveals how all markets fit together, and how we as individuals fit into that bigger picture.

Synthesising Marx's, Keynes's and Schumpeter's theories on wage-price dynamics, effective demand, real innovations and financial markets into a coherent whole, this book goes significantly beyond a consideration of their work in isolation. It focuses on exploring and analysing Goodwin's integrated Marx-Keynes-Schumpeter system (MKS), approaching this from a historical perspective.Chapters start from Harrod's and Kaldor's work, reconsidering prominent demand- and supply-side approaches to Keynesian macro-dynamics, supplemented by Goodwin's distributive cycle. The book presents a baseline MKS-type model, considering the rigorous treatment of uncertainty, opinion dynamics, the movement from flexicurity to social capitalism and democracy, and a high-order MKS macro-model.The exploration of the MKS model from a historical basis will make this a useful book for macroeconomics and history of economics scholars and students. It will also be helpful for those looking at macrodynamics in more depth.

This book addresses major issues such as a growing world energy demand, environmental degradation due to anthropogenic greenhouse gas (GHG) emission, and risk management of disastrous events such as pandemics, abnormal climate, and earthquakes. Using cutting-edge analytical tools, particularly computable general equilibrium (CGE) modelling, the analyses are focused on a very wide range of policy-relevant economic questions for the Asia-Pacific region, especially for Japan, China, India, Vietnam, and smaller nations, including Brunei, Timor Leste, and Fiji. The first part considers (a) the effects of climate change on agriculture sectors, energy policies, and future GHG emission trends, (b) adaptation to climate changes in energy policy and its impacts on the economies, and (c) risk management of catastrophic events such as global pandemics. The second part examines (a) energy environmental issues, (b) economic impacts of natural disaster and depopulation, and (c) effects of informatics development on risk management, using CGE modelling and other methods in regional science fields. Contributors are internationally active leading CGE modellers and environmental economists. The book should be greatly beneficial for scholars and graduate students as well as policy makers who are interested in the economic effects and management of risks relating to climate change and disastrous events.

In Monetary and Fiscal Policy Through a DSGE Lens, Harold L. Cole develops and extends versions of a classic quantitative model of economic growth to take on a wide range of topics in monetary and fiscal policy. Bridging the gap between current undergraduate and graduate texts in the field, this comprehensive book covers the basic elements of advanced macroeconomics and equips readers to understand the debate on key policy questions. By using the simple DSGE, or dynamic stochastic general equilibrium, framework to build a series of quantitative models, the book combines a gradual introduction to advanced analytic methods with computer programming and quantitative policy analysis. In a clear discussion of the sophisticated interaction between theory and data, Cole explains how to gauge how well a model captures key elements in the data and how to reverse engineer a model to data. The book covers costs of inflation, optimal monetary policy, the impact of labor and capital taxes, and optimal fiscal policy. It systematically discusses technical material including the new Keynesian liquidity shock models, standard analytic methods, such as Lagrangian methods, and computational methods using Matlab and Python. With a strong computational emphasis, the volume teaches how to program up and solve systems of non-linear equations and develop models to study the macroeconomy. Knowing how to deeply understand and analyze models and develop computational code to evaluate the implications of those models is essential for students of macroeconomics. This book connects the standard undergraduate material to the elaborate models of advanced graduate courses with systematic and logical coverage of the basics of advanced modern macroeconomics.

This book provides a comprehensive introduction to general equilibrium theory, covering the standard topics as well as the developments of the theory over the past fifty years. This ensures that the reader gains a thorough account of what has been established both in pure theory and in applications.In addition to the basic topics, this book elaborates on fields which are relevant but not mentioned frequently in this context. The material covered includes international trade, growth, finance and implementation, and it offers a broader view than what is usual in texts on general equilibrium theory. This book would make for suitable reading for undergraduate and graduate courses in macroeconomics.

The birth and death of firms is one of the main features of the business cycle. Yet mainstream DGSE macroeconomic models mostly ignore this phenomenon, thereby excluding any potential impact of economic policy on the probability of the birth and death of firms. Those DGSE models that do allow for this phenomenon do so at the cost of drastic simplifications, which effectively rule out causal links between the strategic interaction of industrial firms and the macroeconomy. This innovative new book develops a bottom-up, agent-based framework that shows how strategic interactions at the level of oligopolistic firms, and even at the level of individuals, affect entire industrial sectors and the equilibrium of the macroeconomy. It will appeal to academic researchers and graduate students working in computational economics, agent-based modelling and econophysics, as well as mainstream economists interested in learning more about alternatives to DGSE models in macroeconomics.

It is impossible to understand modern economics without knowledge of the basic tools of gametheory and mechanism design. This book provides a graduate-level introduction to the economic modeling of strategic behavior. The goal is to teach Economics doctoral students the tools of game theory and mechanism design that all economists should know.

This book is for people who want to understand modern trade theory, particularly the Melitz model. It lays out Melitz theory from first principles and relates it to earlier theories of Armington and Krugman. For trade theory specialists, the book produces some significant conclusions. It identifies conditions under which Krugman and Melitz models produce essentially the same results for the welfare effects of trade liberalization as those obtained from Armington, and conditions under which this is not true. These findings will be of interest to academics and policy advisors who need to understand critiques of Armington by proponents of Krugman and Melitz.For computable general equilibrium (CGE) modelers, the book shows how Melitz-style CGE models can be calibrated, solved and interpreted. A major practical contribution of the book is to show how large-scale Armington models such as GTAP can be converted to Melitz by the addition of a small number of equations and minimal alteration of the original Armington model.The book describes computational experience in solving Melitz CGE models using GEMPACK software. This experience will be of interest to researchers currently attempting to solve Melitz-based CGE models. Almost all previous Melitz studies have used GAMS software. Authors of these studies have reported computational difficulties. These difficulties did not occur in this book's GEMPACK-based computations. The book concludes that: (a) CGE modelers can embrace Melitz while retaining their Armington-based models as powerful interpretive devices; and (b) via GEMPACK, large-scale CGE models incorporating Melitz specifications can be solved with no more difficulty than similar-dimensioned Armington models.

This book attempts to elucidate the views of Keynes's General Theory as far as equilibrium, expectations and information are concerned, and compares them with those of modern classical economists of the Chicago and Ricardian persuasion.

This book discusses mathematical models for various applications in economics, with a focus on non-linear dynamics. Based on the author's over 50 years of active work in the field, the book has been inspired by models from the period between 1920 and 1950. Following a brief introduction to economics for mathematicians and other modelers, it assembles a repository of useful specific functions for global dynamic modeling. Furthermore, twelve “research stubs” – outlined research agendas that have not yet been fully worked on – are suggested for further study and could even be expanded to entire research projects. The book is a valuable resource, particularly for young scientists who are skilled in mathematical and computational techniques and are looking for applications in economics.

This book mainly addresses the general equilibrium asset pricing method in two aspects: option pricing and variance risk premium. First, volatility smile and smirk is the famous puzzle in option pricing. Different from no arbitrage method, this book applies the general equilibrium approach in explaining the puzzle. In the presence of jump, investors impose more weights on the jump risk than the volatility risk, and as a result, investors require more jump risk premium which generates a pronounced volatility smirk. Second, based on the general equilibrium framework, this book proposes variance risk premium and empirically tests its predictive power for international stock market returns.

This essential volume reflects the continuing and enduring utility of general equilibrium as a framework of analyses. It attempts to reiterate that understanding broad and holistic consequence of economic events and policies go beyond partial equilibrium perspective. Cutting across areas of research, general equilibrium perspectives in terms of small-scale GE models following the theory and perspectives of Ronald Jones can help readers develop informed judgement regarding critical policies. These include but are not limited to several areas of specific interest - the interaction of financial factors with international trade and implications for the'real sectors'of the economy, the impact of labour market reforms on the unorganised sectors in developing and transition countries, the non-uniform effects of inflation and deflation on internal and external factor flows, and the sought-after relation between foreign investment and skill accumulation.

This title, first published in 1984, considers a temporary monetary equilibrium theory under certainty in a differentiable framework. Using the techniques of differential topology the author investigates the structure of the set of temporary monetary equilibria. Temporary Monetary Equilibrium Theory: A Differentiable Approach will be of interest to students of monetary economics.

The concept of equilibrium is fundamental to economic theory, according to which, it exists when supply and demand are balanced. Equilibrium Models in Economics critically examines the major problematic assumptions employed to build equilibrium models. It gives particular attention to the assumptions used to characterize learning, knowledge and expectations. Lawrence Boland here explores whether equilibrium models can provide a realistic explanation of economic events and objects such as prices, market demands and market supplies. He traces how the different perspectives on equilibrium models represented by such creators as Kenneth Arrow, Robert Clower, and George Richardson influenced subsequent developments in economics. A key debate is about the comparative importance of whether equilibrium refers to a state of an actual economy or a property of a formal mathematical model. Another is the extent that the distinction between a model's exogenous vs. endogenous variables involves causality. Also explored are more recent efforts provided by behavioral, evolutionary, and complexity economics-whether they might change how economics is practiced in the future and how they could. Equilibrium Models in Economics is a trenchant exploration of how the discipline has grappled with attempts to understand and explain the way information, knowledge, and the expectations of actors participating in the economy influence outcomes and behavior. It presents a realistic, workable theory of knowledge and learning, simulating how decision makers and other actors operate in fast-changing equilibrium conditions.

This book addresses the gaps in undergraduate teaching of partial equilibrium analysis, providing a general equilibrium viewpoint to illustrate the assumptions underlying partial equilibrium welfare analysis. It remains unexplained, at least at the level of general economics teaching, in what sense partial equilibrium analysis is indeed a part of general equilibrium analysis. Partial equilibrium welfare analysis isolates a market for a single commodity from the rest of the economy, presuming that other things remain equal, and measures gains and losses by means of consumer surplus. This is a money metric that is supposed to be summable across individuals, recommending policy that maximizes the social surplus. But what justifies such apparently uni-dimensional practise? Within a general equilibrium framework, the assumption of no income effect is presented as the key condition, and substantive general equilibrium situations in which the condition emerges are presented. The analysis is extended to the case of uncertainty, in which the practice adopts aggregate expected consumer surplus, and scrutinizes when such practice is justified. Finally, the book illustrates partial equilibrium as an institutional artifact, meaning that institutional constraint induces individuals to behave as if they are in partial equilibrium. This volume forms an important contribution to the literature by researching why this disparity persists and the implications for economics education.

This is a new kind of textbook in microeconomic theory. In place of the usual concentration on partial equilibrium analysis and discussion of a standard series of topics, the authors seek to introduce the student from the start to the general equilibrium approach to microeconomics, in the form of the two-sector model. This model is then applied to a variety of subjects in different special fields of economic analysis: welfare economics, international trade, public finance and income distribution. This book represents a very different approach to the teaching of micro-economic theory than normally followed, and one that will be of greater long-run value to the serious student of economics. In place of the usual textbook development of the subject as traditionally conceived through topics of increasing complexity and analytical difficulty, using partial equilibrium techniques of analysis, the book concentrates on the exposition and application of a more logically integrated set of tools that have been found of greater use in the analysis of problems arising not only in traditional micro-economics but also in a number of fields of economics that have customarily been hived off into separate specialized advanced courses. General Equilibrium Analysis starts with the description of the two-sector model and how these two sectors are built based on the individual micro-units in which they made up of and how they fit into the concept of the circular flow of income. Subsequent chapters deal with the evaluation of changes in factor endowment, demand preferences and technical progress by means of the model; and the theory of government, which includes both the theory of government expenditure, or public goods, and the theory of government tax and/or subsidy programmes-changes in budgetary scale, tax substitution and expenditure substitution. The model is then extended to an open economy-the so-called'two by two by two'--to consider both the normative effect of inte

The financial crisis of 2007 and the following recession present a major challenge to macroeconomic theory. The same holds true for exceptionally low interest rates during the recent years and for the puzzle that super-expansive monetary policies failed to produce high inflation. Approaches that focus on steady states, rational expectations, and individuals planning over infinite horizons, are not suitable for analysing such abnormal situations. A Study in Monetary Macroeconomics refines and improves mainstream approaches to resolve these puzzles and to contribute to a better understanding of monetary and fiscal policies. Using a rich institutional structure that includes features such as credit money, external finance, borrowing constraints, net worth, real estate and commercial banks, this timely study reduces rationality requirements to cope with its complex setting. It starts with a simple baseline model, deriving results from mathematical reasoning and simulations whilst adhering to the method of dynamic general equilibrium (DGE) with optimizing agents and fully specified models. Highly topical, A Study in Monetary Macroeconomics uses a unified theoretical framework to demonstrate that a DGE approach makes it possible to develop clean models that work outside steady states and are appropriate for answering macroeconomic questions of actual interest.

This title, first published in 1984, is a contribution to applied international trade theory. The author explores the specification and estimation of a multisector general equilibrium model of the open economy. The model is formulated with the aim of assessing empirically the effects of three key policy variables on trade flows, domestic prices, and the trade balance. The policy variables with which the author is concerned are the rate of growth of the stock of domestic credit, commercial policy, as represented by tariffs, and, finally, the exchange rate. This title will be of interest to students of economics.

This study, first published in 1979, continues by examining the question of whether a competitive economy can efficiently allocate a stock of non-renewable natural resources through time. Long-run analyses of competitive economies with such resources have concluded that, without perfect foresight or a complete set of future markets extending infinitely far into the future, there is no economic mechanism to guarantee that the initial price is set so that the economy converges to the socially desirable path of balanced growth. This title will be of interest to students of environmental and natural resource economics.

Europe's and Latin America's social and economic stagnation is a direct result of the unresolved phenomena of the financialization crisis that broke in 2008 in developed countries. Editors Noemi Levy and Etelberto Ortiz analyze the limitations of economic growth and development under capitalist economic organizations where financial capital is dominant as well as explore alternate economic policies.This book argues that institutional settings based on the international monetary market, the global production organization, and the international commerce arraignments need to be redesigned to improve countries'economic growth, job opportunities, and salaries. In order for economic disequilibria to be reduced among regions, countries, and social classes, economic surplus appropriation must be regulated. Divided into four distinct thematic sections, the chapters discuss how income distribution must be re-evaluated in order to halt the economic crisis of developing countries in Europe and Latin America and to boost a new cycle of economic growth and development.This critical discussion will be of value to economic scholars and researchers, policy makers wishing to learn more about the limitations of economic growth, as well as journalists specializing in economic issues.Contributors include: A. Álvarez, E. Basilio, R. Bellofiore, H. Bougrine, A. Chapoy, A. Cibils, C. Domínguez, F. Garibaldo, M. Guadalupe Huerta, L. Kato, N. Levy, T. López, J. Marroquín, S. Martínez, M. Mortagua, E. Ortiz, L.Á. Ortiz, G. Pinazo, L.-P. Rochon, C.A. Rozo, D. Tropeano. A. Vercelli

The authors present a new formal framework for finding the long-run competitive market equilibrium through short-run equilibria by exploiting the operating policies and plant valuations. This “short-run approach” develops ideas of Boiteux and Koopmans. Applied to the peak-load pricing of electricity generated by thermal, hydro and pumped-storage plants, it gives a sound and practical method of valuing the fixed assets—in this case, the river flows and the geological sites suitable for reservoirs. Its main mathematical basis is the producer's short-run profit maximization programme and its dual; their solutions have relatively simple forms that can greatly ease the fixed-point problem of solving for the general equilibrium. Since the optimal values (profit and cost functions) are usually nondifferentiable—this is so when there are joint costs of production such as capacity constraints—nonsmooth calculus is employed to resolve long-standing discrepancies between textbook theory andindustrial reality by giving subdifferential extensions of basic results of microeconomics, including the Wong-Viner Envelope Theorem.

This book aims to explore stability in an international financial system using disequilibrium theory. It examines historical cases of both instability and stability and reviews price-disequilibrium theory to construct a theoretical model for a stable international financial system. In the modern knowledge economy in a global world, financial socio-technical systems still continue to be central to global commerce. Moreover, technological advances in computer and communications have changed both the knowledge economy and the financial system. While globalization and technology have made international finance more powerful and important to knowledge economies, they have also increased the volatility, instability, and fraudulent use of international finance. The international world has not experienced a long-term, stable financial system after 1913. International financial systems have been periodically unstable, triggering financial crises and resultant economicdepressions in different nations. Yet the global economy cannot develop properly without a stable international system, which distributes wealth to economically productive activities. How then can a stable and modern international-financial-system be constructed? In this provocative volume, the authors applies the cross-disciplinary analysis of societal dynamics to important economic writers to derive a new approach to the problem of stabilizing international financial systems.

Andreu Mas-Colell revolutionized our understanding of competitive markets, price formation, and the behavior of market participants. General Equilibrium and Game Theory offers readers a compendium of his most important scholarly contributions, gathering in a single volume the groundbreaking papers that have solidified his standing as one of the preeminent economic theorists of our time.Built upon the foundations of neoclassical economics, Mas-Colell's work is distinguished by a mathematical and analytical elegance that brings theory closer to real-world situations. He overturns the standard assumption of general equilibrium theory—that markets are perfectly competitive and their participants are perfectly rational—and concludes that neither the law of supply and demand nor the existence of equilibrium prices depends on the rationality of agents. Similarly, Mas-Colell (working with Sergiu Hart) challenges classical game theory's reliance on rational behavior, demonstrating that adaptation and learning shape the dynamics of repeated games.Addressing central questions of finance, trade, industrial organization, and welfare economics, Mas-Colell shows the surprising power and versatility of differentiability and linear-space mathematical techniques, and he emphasizes the fruitfulness of cooperative game-theory approaches, such as Shapley value theory and the Bargaining Set, for understanding competition and distribution. General Equilibrium and Game Theory is a signal contribution to economic theory and an invaluable resource for anyone wishing to study the craft of a master of economic modeling.

The economic theory of general equilibrium underpins the most important models used in economic theory in general and in its more specialized areas such as macroeconomics, international trade, environmental economics, growth theory, and developmental economics. In Foundations of the Theory of General Equilibrium, leading academic scholar, Yves Balasko offers a good introduction to the economic theory of general equilibrium and makes use of various mathematical tools as intuitive and easy as possible. The second half of the book addresses properties of the general equilibrium model that are still at the frontier of current research. These properties deal with the characterization of economies with a unique equilibrium and, more generally, with the relationships between the number of equilibria and the fundamentals of an economy.

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.

Policies affecting resource allocation across tradable sectors and those affecting the incentives to produce tradable activities are key determinants of macroeconomic balance and growth. Computable general equilibrium models have made significant contributions to both types of policies. With advancements in computing power and software, these models have become easy to implement and are now widespread. The question then is when and how to formulate them to avoid the ‘black box'syndrome.This book seeks to address these issues through carefully selected essays that analyse how to model general equilibrium linkages in a single economy, across developing and developed economies, and across both micro and macro policies. Micro policies examined include tariffs quotas and VERs, the choice of taxes to maximize government revenue, migration and remittances, and the political economy of tariff setting. Applications on macro policies cover capital inflows, real exchange rate determination, and the modeling of the effects of adjustment policies on income distribution.The book provides insights on the development of a family of models for diverse policy choices, focusing on the ways to model the following: links between tradable and non-tradable activities, labor markets, and portfolio choices given limited capital mobility. Selected essays are all inspired by specific policy problems, including the adaptation to external shocks (i.e. oil), consequences of capital inflows, determinants of migration and associated remittances, the productivity of foreign aid, and rent-seeking activities under trade regimes with non-price trade restrictions. Examples in this book lay out the theoretical foundations, alongside a variety of applications, to help formulate coherent and transparent models for policy analysis. Archetype economies are extensively used to show how differences in economic structure influence the effects of policies. Graduate students and policy analysts interested in modeling will find this a useful compendium of studies.

First Published in 1994. Nicholas Kaldor was born in Hungary in 1908 and died as Baron Kaldor of Newnham in the City of Cambridge, England, in 1986. The years between revealed no hint of scandal or psychological problems that might make Kaldor the subject of a novel. His life was, instead, a straight line of growth and achievement, of intellectual enjoyment and strong values. Kaldor's struggles were intellectual-namely, his efforts to comprehend the economics of the real world, to fit this understanding into economic theory, and to convince his fellow citizens and economists of the accuracy of his perceptions. Kaldor forces us to ponder what the relationship between economic theory and practice should be.

Due to the dialectical analysis of fundamental economic categories, the market economy appears as a complex, nonlinear, functionally closed (but causally open) system of economic actions. Such systems have a number of unique properties that have been well studied in chaos theory, constructivism and second-order cybernetics. This allows for the study of economic processes to involve unique research and development of these fields in the format of interdisciplinary analysis. In this monograph, a mathematical model of general economic equilibrium (i.e. the model of the attractor) is proposed, for which a decentralized economy always strives towards by virtue of the immanent logic of the development of intrasystem processes (but never reaches it because of the permanent impact of natural and social environments).

Many considerations are involved in examining the regularities regarding how changes in the tax burden affect national budget revenues, on the one hand, and how these changes influence economic activities, on the other hand. This book will explain how these affect employment and output rates. It is equally important to examine how government spending influences economic growth. The Keynesian model of aggregate demand gives a quite comprehensive picture of how the tax burden influences economic growth. Though this model has been the subject of many studies and is well explored, it can be said that its analytical capabilities have not yet been fully examined. For instance, based on the study of key characteristics of one of the modified versions of the above-mentioned model, it has been established that the impact of the tax burden on aggregate demand cannot be determined unequivocally. Usually, an increase in the tax burden is one means of decreasing aggregate demand, but, at the same time, an increase in the tax burden may trigger an increase in aggregate demand under certain conditions. It is notable that the tax burden affects both the effectiveness of using productive resources, that is, production technology, and the level of resource usage. Both of these aspects of the tax burden are important, but the impact on the level of resource usage is especially important. The Laffer Effect refers to the result of this impact and it should be taken into consideration when working out a fiscal policy that boosts economic growth. In order to achieve stable economic growth, it is extremely important to establish levels of the tax burden and government spending that will ensure optimization of the level of resource usage. Keynesian models deal with the situation when aggregate supply is not dependent on tax rates, while aggregate demand, especially the part of it that relates to consumption, is the function of taxes. Supply-side economics also considers only a single aspect of the tax issue in the Laffer Curve, which emphasizes the impact of the tax rate on aggregate supply. The single-sidedness of the above theories can be overcome by the Laffer-Keynesian synthesis. This book focuses on the model of macroeconomic equilibrium that allows for this synthesis, in which aggregate demand and aggregate supply are represented as functions of the tax burden.

Known internationally as ‘Mr. Shareholding'economist, Li Yining has had a transformative impact on China's economic transition, most notably as an early advocate of ownership reform and in his promotion of shareholding theory. By examining the interrelationship between the government, enterprises and the market, Chinese Economy in Disequilibrium presents an in-depth discussion on the issues of resource allocation, industrial structure, institutional innovation and economic fluctuation in the current Chinese economy under the condition of disequilibrium. Credited with developing the theory of economic disequilibrium, Professor Li distinguishes two types of disequilibrium on the basis of whether or not the majority of firms in the economy are viable profit-makers. In Chinese Economy in Disequilibrium, Professor Li points out that not only has China's economy been in a state of disequilibrium, but it also has issues with enterprises not being under budget constraint. Given the limitations of market regulation under economic disequilibrium, Professor Li advocates the reform of the enterprise system and upholds the government's leading role in the establishment of order in the socialist commodity economy. A number of measures are also proposed with the aim of facilitating the transition of China's economy from disequilibrium to equilibrium. The central theme is that the reform and transition are means to serve economic growth and social development, which would eventually benefit the ordinary citizens in society.Yining Li is a Professor of Economics and Emeritus Dean of Peking University's Guanghua School of Management. He is one of China's foremost economists, and the author of twenty books and numerous articles on a wide range of economic subjects including reform and development in China. He has received a number of prestigious awards and honours for his research. As the leading proponent of a market economy in China, Professor Li hashad a tremendous influence on China's economic reform policy over the last three decades. He has served on the Standing Committee of the National People's Congress of China and is currently Vice-Chairman of the Economic Committee of the Chinese People's Political Consultative Conference.

The authors, leading researchers in the fields of mathematical economics and methodology, present the first comprehensive synthesis of literature on qualitative and other nonparametric techniques, which are important elements of comparative statics and stability analysis in economic theory. The topics covered show how to assess the comparative statics and stability of economic models without a precise quantitative knowledge of all model components. Applications of the analysis range from determining refutable hypotheses from theory to auditing the solutions of large, computer-based systems.This book discusses in depth the methodology involved in a nonparametric analysis of many neoclassical economic models. Constituting a virtually self-contained manual on such analysis, it provides detailed derivation of necessary and sufficient conditions for the existence of restrictive comparative statics and stability results for a range of specified models. Further, algorithms for applying certain of these conditions are given, with examples, as well as the underlying mathematical approach taken.A large body of research is unified covering issues that have been dealt with piecemeal in scattered but important journal articles by the authors and others. The book will prove invaluable to mathematical economists, mathematicians specializing in matrix or graph theory, applied economists working with large-scale economic models, and advanced students of economics.Originally published in 1999.The Princeton Legacy Library uses the latest print-on-demand technology to again make available previously out-of-print books from the distinguished backlist of Princeton University Press. These editions preserve the original texts of these important books while presenting them in durable paperback and hardcover editions. The goal of the Princeton Legacy Library is to vastly increase access to the rich scholarly heritage found in the thousands of books published by Princeton University Press since its founding in 1905.

The remarkable story and personalities behind one of the most important theories in modern economicsFinding Equilibrium explores the post–World War II transformation of economics by constructing a history of the proof of its central dogma—that a competitive market economy may possess a set of equilibrium prices. The model economy for which the theorem could be proved was mapped out in 1954 by Kenneth Arrow and Gerard Debreu collaboratively, and by Lionel McKenzie separately, and would become widely known as the'Arrow-Debreu Model.'While Arrow and Debreu would later go on to win separate Nobel prizes in economics, McKenzie would never receive it. Till Düppe and E. Roy Weintraub explore the lives and work of these economists and the issues of scientific credit against the extraordinary backdrop of overlapping research communities and an economics discipline that was shifting dramatically to mathematical modes of expression.Based on recently opened archives, Finding Equilibrium shows the complex interplay between each man's personal life and work, and examines compelling ideas about scientific credit, publication, regard for different research institutions, and the awarding of Nobel prizes. Instead of asking whether recognition was rightly or wrongly given, and who were the heroes or villains, the book considers attitudes toward intellectual credit and strategies to gain it vis-à-vis the communities that grant it.Telling the story behind the proof of the central theorem in economics, Finding Equilibrium sheds light on the changing nature of the scientific community and the critical connections between the personal and public rewards of scientific work.

This unique book contains novel and in-depth research regarding economic development in Japan. The authors examine economic development in Japan from both theoretical and empirical perspectives. Using general equilibrium growth accounting and the overlapping generations model, they analyze the relationships between population, agriculture and the economy. The research results are unprecedented and show the effects of increased adult longevity on national savings and the effects of demographic change on the industrial structure; the push-pull effects of technical change in agricultural and non-agricultural sectors and the positive effects of population on technical change and economic development.

The years in-between the two World Wars were a crucial period for the building of economic dynamics as an autonomous field. Different competing research programs arose at international level. Great progress was achieved by studies on the business cycle, with the first statistical applications. Outside the theory of the business cycle, a significant line of inquiry was that pursued at the end of the 1930s by Hicks and Samuelson. This period also saw the formulation of another approach to formal economic dynamics which in the 1930s represented the frontier of research from the analytical point of view. It was an approach which set the notion of equilibrium at the basis of dynamics, exactly as in the case of statics, thus leading to the definition of a dynamic equilibrium approach. The aim of this volume is to take into consideration this original research field sparked from Pareto's works and initially developed during the 1920s in the United States by two American mathematicians, G. Evans and C. Ross. In the 1930s, the concept of dynamic equilibrium became the main research field of the Pareto school which gave its most important contributions in this field. The Paretian economists as Amoroso, de Pietri Tonelli, Sensini, and the younger, such as Bordin, Palomba, La Volpe, Fossati and Zaccagnini, for the most part students of the former, developed this approach in many directions. The theory of dynamic equilibrium reached remarkable results from an analytical viewpoint through the wide application of the functional calculus, thus anticipating a perspective which was taken into consideration in the 1960s with the theory of optimal growth. Despite the Pareto school's relevance, it remained widely unknown, not only at international level, but also in Italy. Recently, it has been object of renewed interest. This present work aims at reconstructing the fundamental contributions offered by the Pareto school in forming the economic dynamics theory.

General Equilibrium Models of Monetary Economies: Studies in the Static Foundations of Monetary Theory is a collection of essays that addresses the integration of the theory of money and the theory of value by using a mathematical general equilibrium theory. The papers discuss monetary theory, microeconomic theory, bilateral trade, transactions costs, intertemporal allocation, and the value of money. The Arrow-Debreu model of Walrasian general equilibrium theory provides a framework to represent money as a device for facilitating trade among economic agents without the use of money as a medium of exchange and as a store of value. The essays analyze the rationale for using a medium of exchange, for using a store of value, and for holding of idle balances in equilibrium. The essays show that by explicit modeling of the structure and difficulties of trade, a powerful class of models which deny money and finance a role in the economy, has by itself shown to have provided the foundation for the structures of trade. The collection will prove helpful for economists, statistician, mathematicians, students or professors of economics and business.