Experimenting with Dynamic Macromodels (eBook)

Preface 7
Contents 11
Part I Basics 16
1 Foundations of Macroeconomic Dynamics 17
1.1 Introduction 17
1.2 Growth and Cycles 18
1.3 Solow’s Model: Continuous Time Version 20
1.4 Harrod–Domar’s Alternative 23
1.5 Discrete Time Formulation of Solow’s Model 24
1.6 Continuous Versus Discrete Time 26
1.7 Aggregation 26
2 Population Dynamics and the Labour Market 29
2.1 Laws of Population Dynamics 29
2.2 Labour Supply 32
2.3 Labour Demand 34
2.4 Market Equilibrium 35
3 Production Functions 37
3.1 Introduction 37
3.2 Cobb–Douglas Production Functions 38
3.3 CES Production Functions 39
3.4 Leontief Production Functions 41
3.5 Remainder 42
Part II Simple Dynamic Macromodels 43
4 A Model Without R& D and Public Expenditure
4.1 Introduction 45
4.2 The Macro Model 46
4.3 Choice of Functions to Implement the Model 49
5 Some Determinants of Endogenous Growth 53
5.1 Introduction 53
5.2 Expenditure on R& D
5.3 Endogenous Technical Progress 54
5.4 Choice of Functions for the Simulations 58
6 Public Expenditure and Taxes 59
6.1 Introduction 59
6.2 Modelling Taxes and Public Expenditure 59
6.3 The Production Sector of the Economy 60
6.4 A Macromodel with R& D and Public Expenditure
6.5 Choosing the Functions for the Simulations 63
Part III Computer Simulations 65
7 Stationary Population: Cobb – Douglas Simulations 69
7.1 Preliminary 69
7.2 No R& D Activity
7.3 Positive R& D Expenditure
8 Stationary Population: CES Simulations 105
8.1 Introduction 105
8.2 No R& D Activity
8.3 Positive R& D Expenditure
8.4 Afterthought 147
9 Stationary Population: Leontief Simulations 149
9.1 Introduction 149
9.2 No R& D Activity
9.3 Positive R& D Expenditure
10 Steady Growing Population 183
10.1 Introduction 183
10.2 No R& D Activity
10.3 Positive R& D Expenditure
11 Logistic Growing Population 203
11.1 Preliminary 203
11.2 No R& D Activity
11.3 Positive R& D Expenditure
11.4 Logistic Population Growth: A Caveat 227
12 Effects of Public Expenditure 229
12.1 Preliminary 229
12.2 Zero R& D Activity
12.3 Positive R& D Expenditure
12.4 Conclusion 261
13 Material Welfare Comparisons 263
13.1 Motivation 263
13.2 Material Welfare Results 264
Appendix: Representative Agent 267
1. Introduction 267
2. Utility Maximization 267
3. Demand Functions for S Shaped Labour Supply 268
4. Individual 270
Shaped Labour Supply Function 270
References 273
Index 277