Handbook of Macroeconomics Volumes 2A and 2B surveys major advances in macroeconomic scholarship since the publication of Volume 1 (1999), carefully distinguishing between empirical, theoretical, methodological, and policy issues, including fiscal, monetary, and regulatory policies to deal with crises, unemployment, and economic growth. As this volume shows, macroeconomics has undergone a profound change since the publication of the last volume, due in no small part to the questions thrust into the spotlight by the worldwide financial crisis of 2008. With contributions from the world’s leading macroeconomists, its reevaluation of macroeconomic scholarship and assessment of its future constitute an investment worth making.
1. Introduction to the Series - p. v 2. Editor's Biography - p. xix 3. Contributors - p. xxi 4. Group Photos - p. xxvii 5. Preface - p. xxvii 6. Acknowledgments - p. xxxi 7. Volume 2A - p. xxxi 8. Section 1: The Facts of Economic Growth and Economic Fluctuation - p. xxxi 9. Chapter 1: The Facts of Economic Growth - p. xxxi 10. Chapter 2: Macroeconomic Shocks and Their Propagation - p. 69 11. Abstract - p. 72 12. 1 Introduction - p. 72 13. 2 Methods for Identifying Shocks and Estimating Impulse Responses - p. 74 14. 3 Monetary Policy Shocks - p. 88 15. 4 Fiscal Shocks - p. 111 16. 5 Technology Shocks - p. 135 17. 6 Additional Shocks - p. 151 18. 7 Summary and Conclusions - p. 152 19. Acknowledgments - p. 154 20. Chapter 3: Macroeconomic Regimes and Regime Shifts - p. 162 21. Abstract - p. 164 22. 1 Introduction: Economic Recessions as Changes in Regime - p. 164 23. 2 Econometric Treatment of Changes in Regime - p. 169 24. 3 Economic Theory and Changes in Regime - p. 187 25. 4 Conclusions and Recommendations for Researchers - p. 196 26. Appendix - p. 197 27. Acknowledgments - p. 198 28. Chapter 4: The Macroeconomics of Time Allocation - p. 174 29. Chapter 5: Who Bears the Cost of Recessions? The Role of House Prices and Household Debt - p. 253 30. Chapter 6: Allocative and Remitted Wages: New Facts and Challenges for Keynesian Models - p. 296 31. Chapter 7: Fiscal and Financial Crises - p. 354 32. Section 2: The Methodology of Macroeconomics - p. 412 33. Chapter 8: Dynamic Factor Models, Factor-Augmented Vector Autoregressions, and Structural Vector Autoregressions in Macroeconomics - p. 412 34. Abstract - p. 412 35. 1 Introduction - p. 418 36. 2 DFMs: Notation and Summary of Econometric Methods - p. 421 37. 3 DFMs for Macroeconomic Monitoring and Forecasting - p. 440 38. 4 Identification of Shocks in Structural VARs - p. 443 39. 5 Structural DFMs and FAVARs - p. 471 40. 6 A Quarterly 200 + Variable DFM for the United States - p. 478 41. 7 Macroeconomic Effects of Oil Supply Shocks - p. 496 42. 8 Critical Assessment and Outlook - p. 514 43. Acknowledgments - p. 517 44. Chapter 9: Solution and Estimation Methods for DSGE Models - p. 525 45. Abstract - p. 529 46. 1 Introduction - p. 530 47. Part I Solving DSGE Models - p. 531 48. 3 A General Framework - p. 534 49. 4 Perturbation - p. 540 50. 5 Projection - p. 577 51. 6 Comparison of Perturbation and Projection Methods - p. 619 52. 7 Error Analysis - p. 620 53. Part II Estimating DSGE Models - p. 627 54. 9 Statistical Inference - p. 650 55. 10 The Likelihood Function - p. 662 56. 11 Frequentist Estimation Techniques - p. 672 57. 12 Bayesian Estimation Techniques - p. 693 58. 13 Conclusion - p. 712 59. Acknowledgments - p. 713 60. Chapter 10: Recursive Contracts and Endogenously Incomplete Markets - p. 724 61. Abstract - p. 726 62. 1 Introduction - p. 726 63. 2 A Simple Model of Dynamic Insurance - p. 728 64. 3 Advanced Topics - p. 773 65. 4 Applications - p. 810 66. 5 Conclusion - p. 836 67. Acknowledgments - p. 837 68. Chapter 11: Macroeconomics and Household Heterogeneity - p. 823 69. Abstract - p. 844 70. 1 Introduction - p. 845 71. 2 The Great Recession: A Heterogeneous Household Perspective - p. 848 72. 3 A Canonical Business Cycle Model with Household Heterogeneity - p. 857 73. 4 Calibration of the Benchmark Economy - p. 863 74. 5 Evaluating the Benchmark Economy - p. 870 75. 6 Cross-Sectional Household Heterogeneity and the Aggregate Dynamics of Consumption and Investment in a Severe Crisis - p. 880 76. 7 Inequality and Aggregate Economic Activity - p. 899 77. 8 Conclusion - p. 908 78. Acknowledgments - p. 909 79. Appendices - p. 918 80. Chapter 12: Natural Experiments in Macroeconomics - p. 921 81. Abstract - p. 924 82. 1 Introduction - p. 924 83. 2 Verification: The Permanent Income Hypothesis - p. 928 84. 3 Quantification: The Fiscal Multiplier - p. 947 85. 4 Identification: Causal Factors in Economic Growth - p. 956 86. 5 Critical Assessment and Outlook - p. 989 87. Appendix - p. 993 88. Acknowledgments - p. 1004 89. Chapter 13: Accounting for Business Cycles - p. 937 90. Abstract - p. 937 91. 1 Demonstrating the Equivalence Result - p. 1018 92. 2 The Accounting Procedure - p. 1035 93. 3 Applying the Accounting Procedure - p. 1040 94. 4 Conclusion - p. 1058 95. Acknowledgments - p. 1060 96. Appendix - p. 1060 97. Chapter 14: Incomplete Information in Macroeconomics: Accommodating Frictions in Coordination - p. 1063 98. Abstract - p. 1066 99. 1 Introduction - p. 1067 100. 2 Framework - p. 1076 101. 3 Imperfect Coordination - p. 1085 102. 4 Global Games: Theory - p. 1098 103. 5 Global Games: Applications - p. 1112 104. 6 Coordination and Synchronization - p. 1125 105. 7 Beauty Contests: Theory - p. 1135 106. 8 Beauty Contests: Applications - p. 1157 107. 9 Efficiency and Policy Implications - p. 1200 108. 10 Conclusion - p. 1209 109. Appendix Proofs - p. 1211 110. Acknowledgments - p. 1231 111. Chapter 15: New Methods for Macro-Financial Model Comparison and Policy Analysis - p. 1240 112. Volume 2B - p. 1319 113. Section 3: Financial-Real Connections - p. 1319 114. Chapter 16: Wholesale Banking and Bank Runs in Macroeconomic Modeling of Financial Crises - p. 1319 115. Abstract - p. 1346 116. 1 Introduction - p. 1346 117. 2 The Growth and Fragility of Wholesale Banking - p. 1349 118. 3 Basic Model - p. 1358 119. 4 Numerical Experiments - p. 1373 120. 5 Anticipated Runs - p. 1379 121. 6 Two Productive Assets and Spillover Effects - p. 1385 122. 7 Government Policy - p. 1388 123. 8 Summary and Directions for Future Research - p. 1397 124. Appendices - p. 1398 125. Chapter 17: Housing and Credit Markets: Booms and Busts - p. 1425 126. Abstract - p. 1425 127. 1 Introduction - p. 1428 128. 2 A Stark Model - p. 1432 129. 3 Related Literature: Households’ Leverage - p. 1446 130. 4 A Simple Model of Catastrophes - p. 1453 131. 5 Related Literature: Sentiments and Bubbles - p. 1466 132. 6 A Simple Model of Sentiments - p. 1472 133. 7 Evidence - p. 1481 134. 8 Conclusions - p. 1491 135. Acknowledgments - p. 1492 136. Chapter 18: Macro, Money, and Finance: A Continuous-Time Approach - p. 1496 137. Abstract - p. 1498 138. 1 Introduction - p. 1498 139. 2 A Simple Real Economy Model - p. 1504 140. 3 A Model with Price Effects and Instabilities - p. 1510 141. 4 A Simple Monetary Model - p. 1532 142. 5 Critical Assessment and Outlook - p. 1539 143. Acknowledgments - p. 1542 144. Chapter 19: Housing and Macroeconomics - p. 1545 145. Abstract - p. 1549 146. 1 Introduction - p. 1549 147. 2 Facts - p. 1553 148. 3 Theory - p. 1568 149. 4 Theory vs Data - p. 1602 150. Acknowledgments - p. 1634 151. Chapter 20: Term Structure of Uncertainty in the Macroeconomy - p. 1640 152. Abstract - p. 1642 153. 1 Introduction - p. 1642 154. 2 Mathematical Framework - p. 1644 155. 3 Asset Pricing over Alternative Investment Horizons - p. 1646 156. 4 Relation to Impulse Response Functions - p. 1654 157. 5 Discrete-Time Formulas and Approximation - p. 1661 158. 6 Continuous-Time Approximation - p. 1668 159. 7 Models with Financial Constraints in Continuous Time - p. 1673 160. 8 Directions for Further Research - p. 1685 161. Acknowledgments - p. 1687 162. Appendices - p. 1687 163. Chapter 21: Quantitative Models of Sovereign Debt Crises - p. 1696 164. Abstract - p. 1698 165. 1 Introduction - p. 1698 166. 2 Motivating Facts - p. 1700 167. 3 Environment - p. 1707 168. 4 Benchmark Models - p. 1720 169. 5 Benchmark Results with Nonlinear Default Costs - p. 1723 170. 6 Rollover Crises - p. 1742 171. 7 Extensions and Literature Review - p. 1746 172. 8 Conclusion: Where We’ve Been and Where We Need to Go? - p. 1752 173. Acknowledgments - p. 1753 174. Section 4: Models of Economic Growth and Fluctuations - p. 1755 175. Chapter 22: RBC Methodology and the Development of Aggregate Economic Theory - p. 1755 176. Chapter 23: Families in Macroeconomics - p. 1787 177. Abstract - p. 1790 178. 1 Introduction - p. 1790 179. 2 The Family and the Macroeconomy in the Short and Medium Run - p. 1794 180. 3 The Family and Economic Growth - p. 1837 181. 4 The Family and the Political Economy of Institutional Change - p. 1861 182. 5 Conclusion - p. 1877 183. Acknowledgments - p. 1879 184. Appendices - p. 1879 185. Chapter 24: Environmental Macroeconomics - p. 1891 186. Abstract - p. 1894 187. 1 Introduction - p. 1895 188. 2 Limited Natural Resources and Sustainability Concerns - p. 1899 189. 3 Climate Change: The Natural-Science Background - p. 1912 190. 4 A Static Global Economy-Climate Model - p. 1938 191. 5 Dynamic IAMs - p. 1986 192. Chapter 25: The Staying Power of Staggered Wage and Price Setting Models in Macroeconomics - p. 2008 193. Chapter 26: Neoclassical Models in Macroeconomics - p. 2042 194. Abstract - p. 2044 195. 1 Introduction - p. 2044 196. 2 The Importance of Low Frequency Components in Macroeconomic Data - p. 2047 197. 3 Cass-Koopmans: The Foundation of Simple Models - p. 2060 198. 4 Neoclassical Models of the US Post-Korean War Economy - p. 2061 199. 5 Neoclassical Models of Depressions - p. 2087 200. 6 Neoclassical Modeling of Large Fiscal Shocks: The US World War II Economy - p. 2106 201. 7 Neoclassical Models of Productivity Shocks - p. 2114 202. 8 Neoclassical Models of Inequality - p. 2118 203. 9 Neoclassical Macroeconomics: Critical Assessments and Future Directions - p. 2121 204. 10 Conclusions - p. 2124 205. Acknowledgments - p. 2124 206. Chapter 27: Macroeconomics of Persistent Slumps - p. 2130 207. Section 5: Macroeconomic Policy - p. 2181 208. Chapter 28: Challenges for Central Banks’ Macro Models - p. 2181 209. Abstract - p. 2186 210. 1 Introduction - p. 2186 211. 2 Common Features of Central Bank Models - p. 2189 212. 3 A Benchmark Model - p. 2202 213. 4 Empirical Performance of Benchmark Models During the Great Recession - p. 2203 214. 5 Augmenting the Benchmark Model - p. 2218 215. 6 State of Macroeconomic Modeling: Critical Assessment and Outlook - p. 2246 216. Acknowledgments - p. 2249 217. Appendices - p. 2249 218. Chapter 29: Liquidity Requirements, Liquidity Choice, and Financial Stability - p. 2247 219. Chapter 30: Understanding Inflation as a Joint Monetary–Fiscal Phenomenon - p. 2303 220. Abstract - p. 2306 221. 1 Introduction - p. 2307 222. 2 Endowment Economies with Ad Hoc Policy Rules - p. 2314 223. 3 Production Economies with Ad Hoc Policy Rules - p. 2333 224. 4 Endowment Economies with Optimal Monetary and Fiscal Policies - p. 2346 225. 5 Production Economies with Optimal Monetary and Fiscal Policies - p. 2372 226. 6 Empirical Considerations - p. 2382 227. 7 Practical Implications - p. 2394 228. 8 Critical Assessment and Outlook - p. 2401 229. Acknowledgments - p. 2409 230. Chapter 31: Fiscal Multipliers: Liquidity Traps and Currency Unions - p. 2337 231. Abstract - p. 2419 232. 1 Introduction - p. 2419 233. 2 Multipliers and Summary Multipliers - p. 2423 234. 3 A Closed Economy - p. 2427 235. 4 National Multipliers in a Liquidity Trap - p. 2428 236. 5 An Open Economy Model of a Currency Union - p. 2438 237. 6 National and Local Fiscal Multipliers in Currency Unions - p. 2442 238. 7 Liquidity Constraints and Non-Ricardian Effects - p. 2450 239. 8 Outside-Financed Fiscal Multipliers - p. 2456 240. 9 Taking Stock: Some Summary Multiplier Numbers - p. 2461 241. 10 Country Size, Aggregation, and Foreign Government Spending - p. 2465 242. 11 Conclusion - p. 2468 243. Appendices - p. 2469 244. Chapter 32: What is a Sustainable Public Debt? - p. 2492 245. Abstract - p. 2494 246. 1 Introduction - p. 2494 247. 2 Empirical Approach - p. 2498 248. 3 Structural Approach - p. 2521 249. 4 Domestic Default Approach - p. 2557 250. 5 Critical Assessment and Outlook - p. 2588 251. 6 Conclusions - p. 2590 252. Appendix: Details on Measurement of Effective Tax Rates - p. 2592 253. Acknowledgments - p. 2593 254. Chapter 33: The Political Economy of Government Debt - p. 2597 255. Index - p. pgI-1
Handbook of Macroeconomics Volumes 2A and 2B surveys major advances in macroeconomic scholarship since the publication of Volume 1 (1999), carefully distinguishing between empirical, theoretical, methodological, and policy issues, including fiscal, monetary, and regulatory policies to deal with crises, unemployment, and economic growth. As this volume shows, macroeconomics has undergone a profound change since the publication of the last volume, due in no small part to the questions thrust into the spotlight by the worldwide financial crisis of 2008. With contributions from the world’s leading macroeconomists, its reevaluation of macroeconomic scholarship and assessment of its future constitute an investment worth making.
1. Introduction to the Series - p. v 2. Editor's Biography - p. xix 3. Contributors - p. xxi 4. Group Photos - p. xxvii 5. Preface - p. xxvii 6. Acknowledgments - p. xxxi 7. Volume 2A - p. xxxi 8. Section 1: The Facts of Economic Growth and Economic Fluctuation - p. xxxi 9. Chapter 1: The Facts of Economic Growth - p. xxxi 10. Chapter 2: Macroeconomic Shocks and Their Propagation - p. 69 11. Abstract - p. 72 12. 1 Introduction - p. 72 13. 2 Methods for Identifying Shocks and Estimating Impulse Responses - p. 74 14. 3 Monetary Policy Shocks - p. 88 15. 4 Fiscal Shocks - p. 111 16. 5 Technology Shocks - p. 135 17. 6 Additional Shocks - p. 151 18. 7 Summary and Conclusions - p. 152 19. Acknowledgments - p. 154 20. Chapter 3: Macroeconomic Regimes and Regime Shifts - p. 162 21. Abstract - p. 164 22. 1 Introduction: Economic Recessions as Changes in Regime - p. 164 23. 2 Econometric Treatment of Changes in Regime - p. 169 24. 3 Economic Theory and Changes in Regime - p. 187 25. 4 Conclusions and Recommendations for Researchers - p. 196 26. Appendix - p. 197 27. Acknowledgments - p. 198 28. Chapter 4: The Macroeconomics of Time Allocation - p. 174 29. Chapter 5: Who Bears the Cost of Recessions? The Role of House Prices and Household Debt - p. 253 30. Chapter 6: Allocative and Remitted Wages: New Facts and Challenges for Keynesian Models - p. 296 31. Chapter 7: Fiscal and Financial Crises - p. 354 32. Section 2: The Methodology of Macroeconomics - p. 412 33. Chapter 8: Dynamic Factor Models, Factor-Augmented Vector Autoregressions, and Structural Vector Autoregressions in Macroeconomics - p. 412 34. Abstract - p. 412 35. 1 Introduction - p. 418 36. 2 DFMs: Notation and Summary of Econometric Methods - p. 421 37. 3 DFMs for Macroeconomic Monitoring and Forecasting - p. 440 38. 4 Identification of Shocks in Structural VARs - p. 443 39. 5 Structural DFMs and FAVARs - p. 471 40. 6 A Quarterly 200 + Variable DFM for the United States - p. 478 41. 7 Macroeconomic Effects of Oil Supply Shocks - p. 496 42. 8 Critical Assessment and Outlook - p. 514 43. Acknowledgments - p. 517 44. Chapter 9: Solution and Estimation Methods for DSGE Models - p. 525 45. Abstract - p. 529 46. 1 Introduction - p. 530 47. Part I Solving DSGE Models - p. 531 48. 3 A General Framework - p. 534 49. 4 Perturbation - p. 540 50. 5 Projection - p. 577 51. 6 Comparison of Perturbation and Projection Methods - p. 619 52. 7 Error Analysis - p. 620 53. Part II Estimating DSGE Models - p. 627 54. 9 Statistical Inference - p. 650 55. 10 The Likelihood Function - p. 662 56. 11 Frequentist Estimation Techniques - p. 672 57. 12 Bayesian Estimation Techniques - p. 693 58. 13 Conclusion - p. 712 59. Acknowledgments - p. 713 60. Chapter 10: Recursive Contracts and Endogenously Incomplete Markets - p. 724 61. Abstract - p. 726 62. 1 Introduction - p. 726 63. 2 A Simple Model of Dynamic Insurance - p. 728 64. 3 Advanced Topics - p. 773 65. 4 Applications - p. 810 66. 5 Conclusion - p. 836 67. Acknowledgments - p. 837 68. Chapter 11: Macroeconomics and Household Heterogeneity - p. 823 69. Abstract - p. 844 70. 1 Introduction - p. 845 71. 2 The Great Recession: A Heterogeneous Household Perspective - p. 848 72. 3 A Canonical Business Cycle Model with Household Heterogeneity - p. 857 73. 4 Calibration of the Benchmark Economy - p. 863 74. 5 Evaluating the Benchmark Economy - p. 870 75. 6 Cross-Sectional Household Heterogeneity and the Aggregate Dynamics of Consumption and Investment in a Severe Crisis - p. 880 76. 7 Inequality and Aggregate Economic Activity - p. 899 77. 8 Conclusion - p. 908 78. Acknowledgments - p. 909 79. Appendices - p. 918 80. Chapter 12: Natural Experiments in Macroeconomics - p. 921 81. Abstract - p. 924 82. 1 Introduction - p. 924 83. 2 Verification: The Permanent Income Hypothesis - p. 928 84. 3 Quantification: The Fiscal Multiplier - p. 947 85. 4 Identification: Causal Factors in Economic Growth - p. 956 86. 5 Critical Assessment and Outlook - p. 989 87. Appendix - p. 993 88. Acknowledgments - p. 1004 89. Chapter 13: Accounting for Business Cycles - p. 937 90. Abstract - p. 937 91. 1 Demonstrating the Equivalence Result - p. 1018 92. 2 The Accounting Procedure - p. 1035 93. 3 Applying the Accounting Procedure - p. 1040 94. 4 Conclusion - p. 1058 95. Acknowledgments - p. 1060 96. Appendix - p. 1060 97. Chapter 14: Incomplete Information in Macroeconomics: Accommodating Frictions in Coordination - p. 1063 98. Abstract - p. 1066 99. 1 Introduction - p. 1067 100. 2 Framework - p. 1076 101. 3 Imperfect Coordination - p. 1085 102. 4 Global Games: Theory - p. 1098 103. 5 Global Games: Applications - p. 1112 104. 6 Coordination and Synchronization - p. 1125 105. 7 Beauty Contests: Theory - p. 1135 106. 8 Beauty Contests: Applications - p. 1157 107. 9 Efficiency and Policy Implications - p. 1200 108. 10 Conclusion - p. 1209 109. Appendix Proofs - p. 1211 110. Acknowledgments - p. 1231 111. Chapter 15: New Methods for Macro-Financial Model Comparison and Policy Analysis - p. 1240 112. Volume 2B - p. 1319 113. Section 3: Financial-Real Connections - p. 1319 114. Chapter 16: Wholesale Banking and Bank Runs in Macroeconomic Modeling of Financial Crises - p. 1319 115. Abstract - p. 1346 116. 1 Introduction - p. 1346 117. 2 The Growth and Fragility of Wholesale Banking - p. 1349 118. 3 Basic Model - p. 1358 119. 4 Numerical Experiments - p. 1373 120. 5 Anticipated Runs - p. 1379 121. 6 Two Productive Assets and Spillover Effects - p. 1385 122. 7 Government Policy - p. 1388 123. 8 Summary and Directions for Future Research - p. 1397 124. Appendices - p. 1398 125. Chapter 17: Housing and Credit Markets: Booms and Busts - p. 1425 126. Abstract - p. 1425 127. 1 Introduction - p. 1428 128. 2 A Stark Model - p. 1432 129. 3 Related Literature: Households’ Leverage - p. 1446 130. 4 A Simple Model of Catastrophes - p. 1453 131. 5 Related Literature: Sentiments and Bubbles - p. 1466 132. 6 A Simple Model of Sentiments - p. 1472 133. 7 Evidence - p. 1481 134. 8 Conclusions - p. 1491 135. Acknowledgments - p. 1492 136. Chapter 18: Macro, Money, and Finance: A Continuous-Time Approach - p. 1496 137. Abstract - p. 1498 138. 1 Introduction - p. 1498 139. 2 A Simple Real Economy Model - p. 1504 140. 3 A Model with Price Effects and Instabilities - p. 1510 141. 4 A Simple Monetary Model - p. 1532 142. 5 Critical Assessment and Outlook - p. 1539 143. Acknowledgments - p. 1542 144. Chapter 19: Housing and Macroeconomics - p. 1545 145. Abstract - p. 1549 146. 1 Introduction - p. 1549 147. 2 Facts - p. 1553 148. 3 Theory - p. 1568 149. 4 Theory vs Data - p. 1602 150. Acknowledgments - p. 1634 151. Chapter 20: Term Structure of Uncertainty in the Macroeconomy - p. 1640 152. Abstract - p. 1642 153. 1 Introduction - p. 1642 154. 2 Mathematical Framework - p. 1644 155. 3 Asset Pricing over Alternative Investment Horizons - p. 1646 156. 4 Relation to Impulse Response Functions - p. 1654 157. 5 Discrete-Time Formulas and Approximation - p. 1661 158. 6 Continuous-Time Approximation - p. 1668 159. 7 Models with Financial Constraints in Continuous Time - p. 1673 160. 8 Directions for Further Research - p. 1685 161. Acknowledgments - p. 1687 162. Appendices - p. 1687 163. Chapter 21: Quantitative Models of Sovereign Debt Crises - p. 1696 164. Abstract - p. 1698 165. 1 Introduction - p. 1698 166. 2 Motivating Facts - p. 1700 167. 3 Environment - p. 1707 168. 4 Benchmark Models - p. 1720 169. 5 Benchmark Results with Nonlinear Default Costs - p. 1723 170. 6 Rollover Crises - p. 1742 171. 7 Extensions and Literature Review - p. 1746 172. 8 Conclusion: Where We’ve Been and Where We Need to Go? - p. 1752 173. Acknowledgments - p. 1753 174. Section 4: Models of Economic Growth and Fluctuations - p. 1755 175. Chapter 22: RBC Methodology and the Development of Aggregate Economic Theory - p. 1755 176. Chapter 23: Families in Macroeconomics - p. 1787 177. Abstract - p. 1790 178. 1 Introduction - p. 1790 179. 2 The Family and the Macroeconomy in the Short and Medium Run - p. 1794 180. 3 The Family and Economic Growth - p. 1837 181. 4 The Family and the Political Economy of Institutional Change - p. 1861 182. 5 Conclusion - p. 1877 183. Acknowledgments - p. 1879 184. Appendices - p. 1879 185. Chapter 24: Environmental Macroeconomics - p. 1891 186. Abstract - p. 1894 187. 1 Introduction - p. 1895 188. 2 Limited Natural Resources and Sustainability Concerns - p. 1899 189. 3 Climate Change: The Natural-Science Background - p. 1912 190. 4 A Static Global Economy-Climate Model - p. 1938 191. 5 Dynamic IAMs - p. 1986 192. Chapter 25: The Staying Power of Staggered Wage and Price Setting Models in Macroeconomics - p. 2008 193. Chapter 26: Neoclassical Models in Macroeconomics - p. 2042 194. Abstract - p. 2044 195. 1 Introduction - p. 2044 196. 2 The Importance of Low Frequency Components in Macroeconomic Data - p. 2047 197. 3 Cass-Koopmans: The Foundation of Simple Models - p. 2060 198. 4 Neoclassical Models of the US Post-Korean War Economy - p. 2061 199. 5 Neoclassical Models of Depressions - p. 2087 200. 6 Neoclassical Modeling of Large Fiscal Shocks: The US World War II Economy - p. 2106 201. 7 Neoclassical Models of Productivity Shocks - p. 2114 202. 8 Neoclassical Models of Inequality - p. 2118 203. 9 Neoclassical Macroeconomics: Critical Assessments and Future Directions - p. 2121 204. 10 Conclusions - p. 2124 205. Acknowledgments - p. 2124 206. Chapter 27: Macroeconomics of Persistent Slumps - p. 2130 207. Section 5: Macroeconomic Policy - p. 2181 208. Chapter 28: Challenges for Central Banks’ Macro Models - p. 2181 209. Abstract - p. 2186 210. 1 Introduction - p. 2186 211. 2 Common Features of Central Bank Models - p. 2189 212. 3 A Benchmark Model - p. 2202 213. 4 Empirical Performance of Benchmark Models During the Great Recession - p. 2203 214. 5 Augmenting the Benchmark Model - p. 2218 215. 6 State of Macroeconomic Modeling: Critical Assessment and Outlook - p. 2246 216. Acknowledgments - p. 2249 217. Appendices - p. 2249 218. Chapter 29: Liquidity Requirements, Liquidity Choice, and Financial Stability - p. 2247 219. Chapter 30: Understanding Inflation as a Joint Monetary–Fiscal Phenomenon - p. 2303 220. Abstract - p. 2306 221. 1 Introduction - p. 2307 222. 2 Endowment Economies with Ad Hoc Policy Rules - p. 2314 223. 3 Production Economies with Ad Hoc Policy Rules - p. 2333 224. 4 Endowment Economies with Optimal Monetary and Fiscal Policies - p. 2346 225. 5 Production Economies with Optimal Monetary and Fiscal Policies - p. 2372 226. 6 Empirical Considerations - p. 2382 227. 7 Practical Implications - p. 2394 228. 8 Critical Assessment and Outlook - p. 2401 229. Acknowledgments - p. 2409 230. Chapter 31: Fiscal Multipliers: Liquidity Traps and Currency Unions - p. 2337 231. Abstract - p. 2419 232. 1 Introduction - p. 2419 233. 2 Multipliers and Summary Multipliers - p. 2423 234. 3 A Closed Economy - p. 2427 235. 4 National Multipliers in a Liquidity Trap - p. 2428 236. 5 An Open Economy Model of a Currency Union - p. 2438 237. 6 National and Local Fiscal Multipliers in Currency Unions - p. 2442 238. 7 Liquidity Constraints and Non-Ricardian Effects - p. 2450 239. 8 Outside-Financed Fiscal Multipliers - p. 2456 240. 9 Taking Stock: Some Summary Multiplier Numbers - p. 2461 241. 10 Country Size, Aggregation, and Foreign Government Spending - p. 2465 242. 11 Conclusion - p. 2468 243. Appendices - p. 2469 244. Chapter 32: What is a Sustainable Public Debt? - p. 2492 245. Abstract - p. 2494 246. 1 Introduction - p. 2494 247. 2 Empirical Approach - p. 2498 248. 3 Structural Approach - p. 2521 249. 4 Domestic Default Approach - p. 2557 250. 5 Critical Assessment and Outlook - p. 2588 251. 6 Conclusions - p. 2590 252. Appendix: Details on Measurement of Effective Tax Rates - p. 2592 253. Acknowledgments - p. 2593 254. Chapter 33: The Political Economy of Government Debt - p. 2597 255. Index - p. pgI-1
