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Recursive Macroeconomic Theory
A substantially revised new edition of a widely used text, offering both an introduction to recursive methods and advanced material.
Recursive methods offer a powerful approach for characterizing and solving complicated problems in dynamic macroeconomics. Recursive Macroeconomic Theory provides both an introduction to recursive methods and advanced material, mixing tools and sample applications. Only experience in solving practical problems fully conveys the power of the recursive approach, and the book provides many applications. This third edition offers substantial new material, with three entirely new chapters and significant revisions to others. The new content reflects recent developments in the field, further illustrating the power and pervasiveness of recursive methods.
New chapters cover asset pricing empirics with possible resolutions to puzzles; analysis of credible government policy that entails state variables other than reputation; and foundations of aggregate labor supply with time averaging replacing employment lotteries. Other new material includes a multi-country analysis of taxation in a growth model, elaborations of the fiscal theory of the price level, and age externalities in a matching model.
The book is suitable for both first- and second-year graduate courses in macroeconomics and monetary economics. Most chapters conclude with exercises. Many exercises and examples use Matlab programs, which are cited in a special index at the end of the book.
Recursive methods offer a powerful approach for characterizing and solving complicated problems in dynamic macroeconomics. Recursive Macroeconomic Theory provides both an introduction to recursive methods and advanced material, mixing tools and sample applications. Only experience in solving practical problems fully conveys the power of the recursive approach, and the book provides many applications. This third edition offers substantial new material, with three entirely new chapters and significant revisions to others. The new content reflects recent developments in the field, further illustrating the power and pervasiveness of recursive methods.
New chapters cover asset pricing empirics with possible resolutions to puzzles; analysis of credible government policy that entails state variables other than reputation; and foundations of aggregate labor supply with time averaging replacing employment lotteries. Other new material includes a multi-country analysis of taxation in a growth model, elaborations of the fiscal theory of the price level, and age externalities in a matching model.
The book is suitable for both first- and second-year graduate courses in macroeconomics and monetary economics. Most chapters conclude with exercises. Many exercises and examples use Matlab programs, which are cited in a special index at the end of the book.
1321 pages, Hardcover
First published August 21, 2000
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Displaying 1 - 2 of 2 reviews
May 7, 2020
[Review is for the fourth edition]
What more can be said. It is the gold standard of graduate macro for a reason. Extensive in the range of topics, from the standard dynastic neoclassical model with compete markets and no frictions, to various alternatives that deviate from this idealization. Topics range from mathematical preliminaries (Markov processes, filters, dynamic programming, etc.) and the basics of recursive competition equilibrium to Bewley models, Ramsey taxation problem, growth, labor search models, and so on.
I'm not a macro person for sure (I'm finishing the first year of a PhD program, with a primary field mostly likely in public economics), but I will say this is a worthwhile investment for any aspiring economist.
What more can be said. It is the gold standard of graduate macro for a reason. Extensive in the range of topics, from the standard dynastic neoclassical model with compete markets and no frictions, to various alternatives that deviate from this idealization. Topics range from mathematical preliminaries (Markov processes, filters, dynamic programming, etc.) and the basics of recursive competition equilibrium to Bewley models, Ramsey taxation problem, growth, labor search models, and so on.
I'm not a macro person for sure (I'm finishing the first year of a PhD program, with a primary field mostly likely in public economics), but I will say this is a worthwhile investment for any aspiring economist.
January 29, 2025
Probably the most advanced mainstream macro textbook. Advanced enough, so that you can get new research ideas right on your way.
Displaying 1 - 2 of 2 reviews