Handbook of Macroeconomics

Note: Supplemental materials are not guaranteed with Rental or Used book purchases.

ISBN: 9780444501585 | 0444501584
Cover: Hardcover
Copyright: 12/13/1999

Buy New

Print on Demand: 2-4 Weeks. This item cannot be cancelled or returned.

$145.38

Part 6: Financial Markets and the Macroeconomy. 19. Asset prices, consumption, and the business cycle (J.Y. Campbell). 20. Human behavior and the efficiency of the financial system (R.J. Shiller). 21. The financial accelerator in a quantitative business cycle framework (B. Bernanke, M. Gertler and S. Gilchrist). Part 7: Monetary and Fiscal Policy. 22. Political economics and macroeconomic policy (T. Persson, G. Tabellini). 23. Issues in the design of monetary policy rules (B.T. McCallum). 24. Inflation stabilization and BOP crises in developing countries (G.A. Calvo, C.A. Vegh). 25. Government debt (D.W. Elmendorf, N.G. Mankiw). 26. Optimal fiscal and monetary policy (V.V. Chari, P.J. Kehoe).

Introduction to the Series

Contents of the Handbook

vii

Preface to the Handbook

PART 6 - FINANCIAL MARKETS AND THE MACROECONOMY

Asset Prices, Consumption, and the Business Cycle

1231

(74)

John Y. Campbell

Abstract

1232

(1)

Keywords

1232

(1)

Introduction

1233

(5)

International asset market data

1238

(7)

The equity premium puzzle

1245

(15)

The stochastic discount factor

1245

(4)

Consumption-based asset pricing with power utility

1249

(3)

The riskfree rate puzzle

1252

(3)

Bond returns and the equity premium and riskfree rate puzzles

1255

(1)

Separating risk aversion and intertemporal substitution

1256

(4)

The dynamics of asset returns and consumption

1260

(24)

Time-variation in conditional expectations

1260

(4)

A longlinear asset pricing framework

1264

(4)

The stock market volatility puzzle

1268

(4)

Implications for the equity premium puzzle

1272

(3)

What does the stock market forecast?

1275

(2)

Changing volatility in stock returns

1277

(3)

What does the bond market forecast?

1280

(4)

Cyclical variation in the price of risk

1284

(12)

Habit formation

1284

(6)

Models with heterogeneous agents

1290

(3)

Irrational expectations

1293

(3)

Some implications for macroeconomics

1296

(9)

References

1298

(7)

Human Behavior and the Efficiency of the Financial System

1305

(36)

Robert J. Shiller

Abstract

1306

(1)

Keywords

1306

(1)

Introduction

1307

(1)

Prospect theory

1308

(5)

Regret and cognitive dissonance

1313

(1)

Anchoring

1314

(3)

Mental compartments

1317

(1)

Overconfidence, over-and under-reaction and the representativeness heuristic

1318

(6)

The disjunction effect

1324

(1)

Gambling behavior and speculation

1325

(1)

The irrelevance of history

1325

(3)

Magical thinking

1328

(1)

Quasi-magical thinking

1329

(1)

Attention anomalies and the availability heuristic

1330

(1)

Culture and social contagion

1331

(1)

A global culture

1332

(1)

Concluding remarks

1333

(8)

References

1334

(7)

The Financial Accelerator in a Quantitative Business Cycle Framework

1341

(56)

Ben S. Bernanke

Mark Gertler

Simon Gilchrist

Abstract

1342

(1)

Keywords

1342

(1)

Introduction

1343

(3)

The model: overview and basic assumptions

1346

(3)

The demand for capital and the role of net worth

1349

(6)

Contract terms when there is no aggregate risk

1350

(2)

Contract terms when there is aggregate risk

1352

(1)

Net worth and the optimal choice of capital

1352

(3)

General equilibrium

1355

(12)

The entrepreneurial sector

1356

(4)

The complete log-linearized model

1360

(7)

Model simulations

1367

(8)

Model parametrization

1367

(1)

Results

1368

(7)

A highly selected review of the literature

1375

(4)

Directions for future work

1379

(18)

Appendix A. The optimal financial contract and the demand for capital

1380

(1)

The partial equilibrium contracting problem

1380

(5)

The log-normal distribution

1385

(1)

Aggregate risk

1385

(2)

Appendix B. Household, retail and government sectors

1387

(1)

Households

1387

(1)

The retail sector and price setting

1388

(1)

Government sector

1389

(1)

References

1390

(7)

PART 7 - MONETARY AND FISCAL POLICY

Political Economics and Macroeconomic Policy

1397

(86)

Torsten Persson

Guido Tabellini

Abstract

1399

(1)

Keywords

1399

(1)

Introduction

1400

(4)

Part A. Monetary Policy

1404

(1)

Credibility of monetary policy

1405

(11)

A simple positive model of monetary policy

1405

(2)

Ex ante optimal monetary policy

1407

(2)

Discretion and credibility

1409

(3)

Reputation

1412

(3)

Notes on the literature

1415

(1)

Political cycles

1416

(10)

Opportunistic governments

1416

(6)

Partisan governments

1422

(3)

Notes on the literature

1425

(1)

Institutions and incentives

1426

(13)

Fixed exchange rates: simple rules and escape clauses

1427

(2)

Central bank independence

1429

(3)

Inflation targets and inflation contracts

1432

(5)

Notes on the literature

1437

(2)

Part B. Fiscal Policy

1439

(1)

Credibility of Fiscal policy

1440

(10)

The capital levy problem

1440

(5)

Multiple equilibria and confidence crises

1445

(1)

Public debt management

1446

(2)

Reputation and enforcement

1448

(1)

Notes on the literature

1449

(1)

Politics of public debt

1450

(16)

Political instability in a two-party system

1451

(6)

Coalition governments

1457

(4)

Delayed stabilizations

1461

(2)

Debt and intergenerational politics

1463

(1)

Notes on the literature

1464

(2)

Part C. Politics and Growth

1466

(1)

Fiscal policy and growth

1466

(7)

Inequality and growth

1467

(2)

Political instability and growth

1469

(3)

Property rights and growth

1472

(1)

Notes on the literature

1472

(1)

References

1473

(10)

Issues in the Design of Monetary Policy Rules

1483

(48)

Bennett T. McCallum

Abstract

1484

(1)

Keywords

1484

(1)

Introduction

1485

(1)

Concepts and distinctions

1486

(4)

Special difficulties

1490

(5)

Choice of target variable

1495

(10)

Choice of instrument variable

1505

(10)

Issues concerning research procedures

1515

(3)

Interactions with fiscal policy

1518

(5)

Concluding remarks

1523

(1)

References

1524

(7)

Inflation Stabilization and BOP Crises in Developing Countries

1531

(84)

Guillermo A. Calvo

Carlos A. Vegh

Abstract

1533

(1)

Keywords

1533

(1)

Introduction

1534

(2)

Understanding chronic inflation

1536

(5)

Inflation as an optimal tax

1537

(1)

Shocks and accommodation

1538

(1)

Multiple equilibria

1539

(1)

The ``provinces'' effect

1540

(1)

Delayed stabilization

1540

(1)

In conclusion

1541

(1)

Evidence on the real effects of stabilization in chronic-inflation countries

1541

(21)

Exchange-rate-based stabilization: empirical regularities

1543

(11)

Money-based stabilization: empirical regularities

1554

(3)

Recession now versus recession later

1557

(2)

A word of caution

1559

(3)

Exchange-rate-based stabilization I: inflation inertia and lack of credibility

1562

(11)

Inflation inertia

1562

(7)

Lack of credibility

1569

(4)

Exchange-rate-based stabilization II: durable goods, credit, and wealth effects

1573

(9)

Durable goods

1573

(2)

Credit market segmentation

1575

(2)

Supply-side effects

1577

(3)

Fiscal policy

1580

(1)

And the winner is...

1581

(1)

Money-based stabilization

1582

(8)

A simple model

1582

(5)

Extensions to other money-based regimes

1587

(1)

Money anchor versus exchange-rate anchor

1588

(2)

Balance-of-payments crises

1590

(14)

Liquidity

1591

(1)

The Krugman model

1592

(3)

Krugman model: critique and extensions

1595

(2)

The current account approach

1597

(2)

Financial considerations

1599

(5)

Concluding remarks

1604

(3)

References

1607

(8)

Government Debt

1615

(56)

Douglas W. Elemendorf

N. Gregory Mankiw

Abstract

1616

(1)

Keywords

1616

(1)

Introduction

1617

(1)

The data

1617

(10)

Debt and deficits in the USA and other countries

1618

(2)

Measurement issues

1620

(5)

Future fiscal policy

1625

(2)

The conventional view of debt

1627

(13)

How does debt affect the economy?

1628

(4)

How large is the long-run effect of debt on the economy?

1632

(8)

Ricardian equivalence

1640

(19)

The idea and its history

1640

(5)

The debate over Ricardian equivalence: theoretical issues

1645

(9)

The debate over Ricardian equivalence: empirical issues

1654

(5)

Optimal debt policy

1659

(4)

Fiscal policy over the business cycle

1659

(1)

Fiscal policy and national saving

1660

(2)

Tax smoothing

1662

(1)

Conclusion

1663

(1)

References

1663

(8)

Optimal Fiscal and Monetary Policy

1671

V.V. Chari

Patrick J. Kehoe

Abstract

1672

(1)

Keywords

1672

(1)

Introduction

1673

(3)

The primal approach to optimal taxation

1676

(10)

The Ramsey allocation problem

1676

(4)

Elasticities and commodity taxation

1680

(2)

Uniform commodity taxation

1682

(2)

Intermediate goods

1684

(2)

Fiscal policy

1686

(34)

General framework

1686

(7)

Capital income taxation

1693

(6)

Cyclical properties

1699

(12)

Other environments

1711

(9)

Monetary policy

1720

(22)

Three standard monetary models

1721

(12)

From monetary to real

1733

(3)

Cyclical properties

1736

(6)

Conclusion

1742

(1)

References

1743

Author Index

(32)

Subject Index

Please wait while the item is added to your bag...

FREE SHIPPING

Rent More, Save More! Use code: BBRENTAL

5% off 1 book, 7% off 2 books, 10% off 3+ books

Handbook of Macroeconomics

Summary

Table of Contents

Supplemental Materials

FREE SHIPPING

Rent More, Save More! Use code: BBRENTAL

5% off 1 book, 7% off 2 books, 10% off 3+ books

Handbook of Macroeconomics

Summary

Table of Contents

Supplemental Materials

Digital License