Macroeconomic analysis

A concise but rigorous and thorough introduction to modern macroeconomic theory. This book offers an introduction to modern macroeconomic theory. It is concise but rigorous and broad, covering all major areas in mainstream macroeconomics today and showing how macroeconomic models build on and relate to each other. The self-contained text begins with models of individual decision makers, proceeds to models of general equilibrium without and with friction, and, finally, presents positive and normative theories of economic policy. After a review of the microeconomic foundations of macroeconomics, the book analyzes the household optimization problem, the representative household model, and the overlapping generations model. It examines risk and the implications for household choices and macroeconomic outcomes; equilibrium asset returns, prices, and bubbles; labor supply, growth, and business cycles; and open economy issues. It introduces frictions and analyzes their consequences in the labor market, financial markets, and for investment; studies money as a unit of account, store of value, and medium of exchange; and analyzes price setting in general equilibrium. Turning to government and economic policy, the book covers taxation, debt, social security, and monetary policy; optimal fiscal and monetary policies; and sequential policy choice, with applications in capital income taxation, sovereign debt and default, politically motivated redistribution, and monetary policy biases. Macroeconomic Analysis can be used by first-year graduate students in economics and students in master's programs, and as a supplemental text for advanced courses.

Intro -- Title Page -- Copyright -- Dedication -- Table of Contents -- List of Figures -- List of Tables -- Preface -- 1. Microeconomic Foundations -- 1.1. Microeconomics -- 1.1.1. Allocation, Feasibility, Optimality -- 1.1.2. Competitive Equilibrium -- 1.1.3. Walras's Law -- 1.1.4. Fundamental Theorems of Welfare Economics -- 1.2. Primitives -- 1.2.1. Event Tree -- 1.2.2. Preferences -- 1.2.3. Technology -- 1.3. Bibliographic Notes -- 2. Consumption and Saving -- 2.1. Consumption Smoothing -- 2.1.1. Two Periods -- 2.1.2. More Periods -- 2.1.3. Infinite Horizon -- 2.2. Extensions

2.2.1. Borrowing Constraint -- 2.2.2. Nongeometric Discounting and Time Consistency -- 2.2.3. Multiple Goods -- 2.3. Bibliographic Notes -- 3. Dynamic Competitive Equilibrium -- 3.1. Representative Agent and Capital Accumulation -- 3.1.1. Economy -- 3.1.2. Firms -- 3.1.3. Households -- 3.1.4. Market Clearing -- 3.1.5. General Equilibrium -- 3.1.6. Social Planner Allocation and Pareto Optimality -- 3.1.7. Analysis -- 3.1.8. Population Growth -- 3.2. Overlapping Generations and Capital Accumulation -- 3.2.1. Economy -- 3.2.2. Firms -- 3.2.3. Households -- 3.2.4. Market Clearing

3.2.5. General Equilibrium …