Book Description
This rigorous but brilliantly lucid book presents a self-contained treatment of modern economic dynamics. Stokey, Lucas, and Prescott develop the basic methods of recursive analysis and illustrate the many areas where they can usefully be applied.
After presenting an overview of the recursive approach, the authors develop economic applications for deterministic dynamic programming and the stability theory of first-order difference equations. They then treat stochastic dynamic programming and the convergence theory of discrete-time Markov processes, illustrating each with additional economic applications. They also derive a strong law of large numbers for Markov processes. Finally, they present the two fundamental theorems of welfare economics and show how to apply the methods developed earlier to general equilibrium systems.
The authors go on to apply their methods to many areas of economics. Models of firm and industry investment, household consumption behavior, long-run growth, capital accumulation, job search, job matching, inventory behavior, asset pricing, and money demand are among those they use to show how predictions can he made about individual and social behavior. Researchers and graduate students in economic theory will find this book essential.
Customer Reviews:
A reader.......2006-04-28
I have never, e*v*e*r encountered a worse book in any field in my entire life. Ok, so chapter 4 and 9 are cute - but you know what, you really don't need to write a book to publish 30 pages of material that is actually worth reading.
I had a clever teacher who once said: "If you want to pick mushrooms, go to the forest" - well, if you want to learn Math, take the bus and head to the math department. The presentation is completely unclear, there is no motivation and the math is treated in a ridiculusly simplified way.
According to SLP, to prove a theorem, all you need to do is make assumptions - no need to motivate why you make them - that would be overkill, rather leave it to the reder to motivate (as an annoying exercise).
I dream of the day a Mas-Collel of macro economics comes around and writes a comprehensive macro book. Until this day, I am left wiping my behind with chapter 1-3; 5-8; and 10-End. Oh well.
The first step in the methods.......2006-02-23
This book is a first great step into the theory and results that you need to really understand the technicalities behind current research on Dynamic General Equilibrium Macroeconomics.
Further, it's an excellent complement of Sargent and Ljungqvist's Recursive Macroeconomic Theory.
Essential.......2004-11-08
Essential for understanding modern macroeconomic theory, for better or worse. Chapter 4 on Dynamic Programming under certainty and bounded returns is beautiful. I recommend using this book in conjunction with Sargent's RMT.
tough, terse, but worth the fight.......2004-08-31
This is a really challenging book, worth fighting through. Some of the exercises are impossible without outside help, so for self-study the solutions manual by Irigoyen, et al is *essential*.
Good as research reference, but not in mastering the field.......2004-05-13
As a research economist or graduate student, especially if working in economic theory or dynamic macroeconomics, it is difficult to overstate the value of this book as a handy guide for a set of essential facts (re: theorems) regarding the existence of solutions to dynamic programming problems or markov decision processes, as well as characterizing the properties of the set of solutions.
That being said, this is not the book a budding theorist wants to learn techniques from (For the mathematical prerequisites: measure theory, topology, probability, stochastic processes, hilbert spaces, there are better treatments in the math literature. For dynamic programming in discrete time itself: Bertsekas and Shreve's 1978 text is far superior). Though I am not an expert in macroeconomics, I believe Sargent's sequence of books is a better source for learning the how-to-do, while keeping the economic questions crystal clear: neither of these is a strong point of this book.
Book Description
Everyone knows the small-world phenomenon: soon after meeting a stranger, we are surprised to discover that we have a mutual friend, or we are connected through a short chain of acquaintances. In his book, Duncan Watts uses this intriguing phenomenon--colloquially called "six degrees of separation"--as a prelude to a more general exploration: under what conditions can a small world arise in any kind of network?
The networks of this story are everywhere: the brain is a network of neurons; organisations are people networks; the global economy is a network of national economies, which are networks of markets, which are in turn networks of interacting producers and consumers. Food webs, ecosystems, and the Internet can all be represented as networks, as can strategies for solving a problem, topics in a conversation, and even words in a language. Many of these networks, the author claims, will turn out to be small worlds.
How do such networks matter? Simply put, local actions can have global consequences, and the relationship between local and global dynamics depends critically on the network's structure. Watts illustrates the subtleties of this relationship using a variety of simple models---the spread of infectious disease through a structured population; the evolution of cooperation in game theory; the computational capacity of cellular automata; and the sychronisation of coupled phase-oscillators.
Watts's novel approach is relevant to many problems that deal with network connectivity and complex systems' behaviour in general: How do diseases (or rumours) spread through social networks? How does cooperation evolve in large groups? How do cascading failures propagate through large power grids, or financial systems? What is the most efficient architecture for an organisation, or for a communications network? This fascinating exploration will be fruitful in a remarkable variety of fields, including physics and mathematics, as well as sociology, economics, and biology.
Customer Reviews:
All the details you need to know to understand Watts' and Strogatz' famous article.......2007-03-12
The book basically gives all the details needed to understand Watts and Strogatz famous Nature article 'Collective Dynamics of Complex Networks' in 1998. I think that it is basically Watts PhD-thesis and as such it is of course nicely written, but nothing for the laymen who is rather referred to Watts other, more story-telling book 'Six Degrees', Barabasi's book 'Linked', or to another book that I would recommend most, namely the one by Mark Buchanan titled 'Small Worlds'. Mark is a skillful scientific writer and his book has a broader scope that makes it more interesting than each of the two monographs that are a bit more focused on the scientists own contribution.
Not enough contents to be a good book.......2005-07-08
Networks are since a couple of years object of intense research in several different disciplines. One reason therefore is certainly the outstanding article by Watts and Strogatz, Collective dynamics of small world networks, Nature, 393:440--442, 1998. Unfortunatelly, this book can not continue the high level of this article. Actually, it does not really provide much more information than the article itself. I would suggest to read the article cited above and either decide for another book or to look directly in the literature and read the origninal articles.
To summarize, this book is not terribly weak, but one can clearly sees that it swims on the current 'complex networks' wave without providing enough justification for its existence. Of course, if you do not have access to the original literature and just what to have a general overview of complex networks and what be done with them, you may consider buying this book.
Good, but some typos.......2005-06-02
Mathematical level: Moderate; there's no calculus, and little high level math, but the book is quite mathematical in tone, and some of the arguments may be difficult to follow without a good "math sense". There are MANY equations and graphs.
Good points: Watts covers an area that will interest those who deal with mathematical models of social networks e.g. models of disease-spread, especially HIV. It might, however, cover other things that can spread through networks as well. He presents analysis of graphs (or networks) that are neither random nor highly structured; and begins to examine ways that the degree of structure v. randomness can be measured.
Bad points: There are more than the usual number of typos. The models presented are a "first step", only.
Inspiring.......2001-07-24
The author believes that human thought might be a small world, in the sense that one could reach any idea if he/she finds the right associations and "short-cut"s. The small-world theory is indeed one of those short cuts itself. It links many different domains and uncovers some interesting common behavior.
The theory is developed in a scientific manner with extensive numerical support. Rich literature reviews and many open questions make this book a good research reference. Complex observations are generally followed by qualitative explanations. However, some of the simpler derivations are not fully clear. I believe that adding a few lines here and there can turn this book into a textbook.
The book spans many different areas of science and a deep understanding of the related results may require some background. However, each chapter ends with a brief summary, allowing the reader to move forward if he/she finds the chapter difficult. In summary, as the author puts it, the book is simply the "end of the beginning" in an exciting new field.
Great scientific synthesis.......2000-07-12
The book takes a systematic look at the 'small world' graphs. These natural graphs have been discovered by graph theoretist as erly as 60's, but were not properly understood. The graphs are remarkable in their ability to cluster and scale lengths. There are fundumental connections between these graphs and complex systems, discrete dynamical systems, computation and information processing. Duncan has done a tremendous job in building experimetal and theoretical models trying to understand how these graphs come about and sustain themselves. Read this book.
Book Description
Standard texts and research in economics and finance ignore the absence of evidence from the analysis of real, unmassaged market data to support the notion of Adam Smith's stabilizing Invisible Hand. In stark contrast, this text introduces a new empirically-based model of financial market dynamics that explains the volatility of prices options correctly and clarifies the instability of financial markets. The emphasis is on understanding how real markets behave, not how they hypothetically 'should' behave.
Customer Reviews:
So what? .......2007-03-26
I am a 3rd year PhD student in Financial Economics, and although I should confess that I only browsed the book, not having fully read it (sorry about that...), I must say that this approach totally misses the target. I recommend anyone who is interested in knowing why to look up the following book review:
[...]
Have fun.
Good summary of the literature.......2007-01-10
I think this book is nicely written and covers a variety of subjects. What I missed while reading it was more applied examples.
McCauley complements Keynes and Mandelbrot.......2005-02-01
McCauley's(M) book definitely should be in the library of any technically trained (BA or BS degree in mathematics or statistics and a BA or BS in economics or finance) reader who is aware of the constant failure of neoclassical economics(and its modern variates such as rational expectations,real business cycle theory,monetarism,or supplyside economics), econometrics(Tinbergen,Frisch,Haavelmo and ,unfortunately,"Keynesian"econometricians like Modigliani,Tobin,Klein,and Solow) and financial analysts(Fama,Black,Merton,Scholes,Sharpe,Osborne,Markowitz and Cootner)to explain and forecast turning points in the business cycles of various countries and/or turning points in various financial markets(stock,commodity,real estate,currency,bond,money or derivatives)at any time in the last century,at least,using the assumption of normality(normal,lognormal,bivariate normal,multivariate normal,approximately normal,etc.).M presents a stochastic model based on the application of Green's Theorem to predict the future values of different options contracts(pp.180-192)that avoids the incorrect assumption of normality.M emphasizes changes in returns,as opposed to changes in prices a la Mandelbrot(pp.73-75).Again, the incorrect assumption of normality is avoided.This reviewer views these developments as occurring within the framework established by Mandelbrot no later than 1966.M is developing and improving aspects of Mandelbrot's general approach.However,there are three areas of M's book that need to be revised in a future edition.The first is his analysis of the classical-neoclassical concept of equilibrium and the process of adjustment involved over time.The argument made by neoclassical economists is that the economy( and all markets)is self equilibrating and always tending to or converging toward the optimal equilibrium point,although in point of fact,due to a constant set of external shocks,this equilibrium position is never reached.Thus, all short-run transactions may or may not be made at disequilibrium prices with no recontracting possible.The result,in the short run,is non optimal.However, in the long run,all of the losses and/or gains from such disequilibrium positions cancel or average out so that the resulting process can be analyzed "as if" the different markets were actually attaining equilibriums.Of course,all changes in market prices are assumed to be normally distributed around the equilibrium,market clearing price which is the average(arithmetic mean)of a normal probability distribution.This argument also is incorrect,but is much more difficult to refute since it is much more sophisticated ,using(misusing)the law of large numbers and the central limit theorem without ever actually examining the basic data.M needs to fine tune his basically sound critique to deal with the more sophisticated version of the neoclassical argument.If he does not,the neoclassical response will be that he does not understand microeconomic price theory.Second, Mandelbrot should not be bracketed with the likes of Markowitz Osborne,Sharpe,Black,Scholes,Merton,etc., on p.4 .Mandelbrot has, in fact,been clearly opposed,since the early 1960's, to the type of theoretical and statistical analysis and result that has been published by this group of economists and financial analysts.Third,M appears to have never read Keynes's A Treatise on Probability(1921;TP) or the 1939-40 exchange between Tinbergen and Keynes over the logical foundations of the basic econometric technique of multiple regression and correlation analysis ,as it regards forecasting of the business cycle.Keynes's complete argument can be found in chapter 17,pp.205-214,and chapters 29,30, 32,and 33 of the TP.Keynes always argued that,outside of the fields of life and physical science,the normal distribution was rather special and limited in application. The use of it required clearcut empirical testing of the data before normality could be assumed.Finally,Keynes's analytic tool in the General Theory(1936) is to show that the general case in macroeconomics is the existence of multiple stable equiibria.This describes the commodity or output market.The labor market is a function of changes in the commodity market.The labor market is in a state of constant disequilibrium,equilibrium only possibly occurring in the special case of a global optimum being obtained in the commodity market.M is correct that the analysis in most markets should be based on excess demand functions.Keynes arrived at this approach in 1936.A set of D=Z functions(functions clearly defined by Keynes in the GT and analyzed by Keynes in chapters 20 and 21 of the GT) define a locus of points that Keynes called the AGGREGATE SUPPLY CURVE.Only one of these points gives a global optimum.The economics profession has made a bloody mess of Keynes's mathematical analysis since the publication of the GT in 1936,constantly confusing the expected aggregate supply function,Z,with the aggregate supply curve,D=Z.M's treatment of Keynes is deficient and needs to be fixed in a later edition.A complete mathematical analysis of Keynes's theory of effective demand is contained in Brady(2004),"Essays on JM Keynes and..."
Some strengths, some weaknesses .......2004-12-28
The book serves up a very interesting and enlightening alternative to traditional economic thought in a variety of different contexts. I would certainly recommend it to any graduate student of physics or economics seeking to have a well rounded view the financial world.
The great weakness of this text is that the author seems to more than simply disagree with traditional economic theory, he despises it. That might not by itself be so great a weakness if the theory offered up in its stead were compelling, but, the author's passion notwithstanding, that is not the case here. The math aside, in tone and method this book reminds me very much of books authored by Intelligent Design advocates, seeking more to destroy the prominent competing theory than to present a coherent theory of its own.
Perhaps such passion is needed to get the neoclassical economists to pay attention. As in many things, I suspect the two schools of thought have much to teach one another.
On a more practical level, this is not a book for those who have not had a very solid grounding in mathematics, and likely unsuitable for all but the brightest, and most mathematically inclined, undergraduates.
Dynamics of Markets - Econophysics and Finance.......2004-12-10
Dynamics of Markets - Econophysics and Finance
by Joseph McCauley
reviewed by: Enrico Scalas
In 1720, Newton invested his money in the South Sea bubble and lost £20000, a lot of money in those days [1].
So, physicists do not always do it better in financial markets.
Having said that, let us now go on and consider the merits and limits of this book by Joseph McCauley.
The book is divided into nine chapters. Chapters 1, 3, 8 and 9 cover material from epistemology (ch. 1), probability theory (ch. 3), fluid dynamics (ch. 8), and the theory of computation (ch. 9). Chapters 2, 4, 5,6 and 7 are mainly devoted to economics and finance. Namely, chapter 2 critically reviews the general theory of equilibrium, chapter 4 is on the dynamics of markets, chapter 5 and 6 present portfolio selection theory and
option pricing, respectively, and, finally, chapter 7 is a criticism of thermodynamic analogies in finance.
The range of interests of the author is overwhelming and this book is the first attempt to put together many concepts taken from various disciplines in a coordinate view. I am a fan of this method and I much appreciate the effort of the author. However, this is also a limit, as the reader looking for recipes to price options or to select a suitable portfolio will be somehow disappointed. In the very same way, those looking for a
rational criticism of neo-classical assumptions in economics are likely to read the chapters on option pricing without great passion.
In a short review, it is impossible to take into account all the aspects of McCauley's book.
I will just discuss one: equilibrium in economics. But, before that, let me underline that this is the first book in Econophysics where everything in finance is done by explicitly formulating and calculating Green functions. Second, the author presents the European option price predictions in a closed algebraic form and, third, Gaussian returns play no role in the predictions fully based on the empirical distribution.
The author presents a nice criticism of the concept of equilibrium in economics which, in itself, is worth
buying and reading the book. The arguments are scattered throughout the book, as the author is interested
in discussing the behaviour of financial market. For economics and finance, the author provides convincing evidence that the only legitimate form of equilibrium is vanishing excess demand. But price fluctuations in actual financial markets cannot be effectively explained by a sequence of different economic equilibria determined by varying exogenous factors. Then, the only possibility is that excess demand is considered as a stochastic process leading to diffusive models for price (or return) dynamics. Thus, the use of the Green-function formalism in Finance is a natural and logical choice.
McCauley's discussion on equilibrium would have been helped by reference to Kaldor's 1972 paper on the irrelevance of equilibrium economics [2]. Kaldor's point of view coincides with the one of McCauley when he argues that ultimately theories must be confronted with the real world. In discussing the difference between an axiomatic theorem and a scientific theory, Kaldor quotes Einstein: << Physics constitute a logical system of thought which is in a state of evolution, whose basis cannot be distilled, as it were, from experience by an inductive
method, but can only be arrived at by free invention. The justification (truth content) of the system rests in the verification of the derived propositions by sense experiences. The skeptic will say: "it may well be true that this system of equations is reasonable from a logical standpoint. But it does not prove that it corresponds to nature". You are right, dear skeptic. Experience alone can decide on truth. >> [3]
Also in this book, as in many contemporary books, there are various misprints and the constant reference to wrong equation numbers is disturbing.
I think that this book can be read with profit both by physicists interested in complex systems and by economists interested in the principles of their discipline. Economists can always refer to Newton's example mentioned above, when they read in the book about the success of physicists in finance.
References
[1] C. Reed, "The Damn'd South Sea" Britain's greatest financial speculation and its unhappy ending, documented in a rich Harvard collection. Harvard Magazine, May-June 1999.
[2] N. Kaldor, "The Irrelevance of Equilibrium Economics", The Economic Journal, vol. 82, n. 328, 1237-1255, 1972.
[3] A. Einstein, "Ideas and Opinions", Gramercy; Reprint edition (December 12, 1988).
Book Description
Modeling the Environment is the first introductory textbook for a technique of rapidly growing importance. It requires little or no mathematical background, and is appropriate for undergraduate environmental students as well as professionals new to modelling. Developed from the author's own introductory course, it is classroom-tested and represents an important contribution to the field of system dynamics.
Modeling techniques that allow managers and researchers to see in advance the consequences of actions and policies are becoming increasingly important to environmental management. The models produced are vital analytical tools that aid the policy-setting and implementation process, and help us to understand how environmental systems respond to management interventions.
Modeling the Environment is a basic introduction to one of the most widely known and used modeling techniques, system dynamics. The book is designed to build the skills of students as they progress from learning fundamental ideas to constructing models of increasing complexity. Written in a clear and comprehensible style, the book:
- presents basic concepts of modeling using system dynamics
- illustrates the mechanics of model construction through a range of working models
- offers a rich array of exercises for students to use in applying the principles and techniques described in the text
- walks students through the design and application of models of specific types of environmental systems
.
In addition, the book contains more than 300 figures and model illustrations, and provides a guide to an interactive website where students can use the text to "navigate" management flight simulators ? models of both real and hypothetical systems developed by the author. The book also contains appendixes that help students review the necessary math, and which provide additional concepts and exercises for further study.
Customer Reviews:
Great Book for Anyone.......2006-12-12
This is a great book for anyone who wants to gain a thorough understanding of Stella software. The book is easy to read, and the examples and case studies are well chosen.
Great interdisciplinary book on environmental modeling.......2000-05-24
A highly readable introduction to environmental modeling. What distinguishes the book from other environmental science and environmental modeling works is its interdisciplinary treatment. In particular, the models integrate the physical world and the world of human behavior. Far too many environmental models fail to close the feedbacks between human behavior and the state of the environment, instead taking waste inputs or resource use as exogenous. This book helps students learn to model human behavior (social and economic) as an integral part of the ecological system. The models and software mean the book encourages active learning, and enable students to explore important issues on their own if they choose.
Modeling the Environment.......2000-04-24
This book is easy to read and contains clear examples of how to use stella software to model the environment. The marvel here is the software, not the book. For the software timid, it might suppliment the software users guide.
Book Description
This book is an effective, concise text for students and researchers that combines the tools of dynamic programming with numerical techniques and simulation-based econometric methods. Doing so, it bridges the traditional gap between theoretical and empirical research and offers an integrated framework for studying applied problems in macroeconomics and microeconomics.
In part I the authors first review the formal theory of dynamic optimization; they then present the numerical tools and econometric techniques necessary to evaluate the theoretical models. In language accessible to a reader with a limited background in econometrics, they explain most of the methods used in applied dynamic research today, from the estimation of probability in a coin flip to a complicated nonlinear stochastic structural model. These econometric techniques provide the final link between the dynamic programming problem and data. Part II is devoted to the application of dynamic programming to specific areas of applied economics, including the study of business cycles, consumption, and investment behavior. In each instance the authors present the specific optimization problem as a dynamic programming problem, characterize the optimal policy functions, estimate the parameters, and use models for policy evaluation.
The original contribution of Dynamic Economics: Quantitative Methods and Applications lies in the integrated approach to the empirical application of dynamic optimization programming models. This integration shows that empirical applications actually complement the underlying theory of optimization, while dynamic programming problems provide needed structure for estimation and policy evaluation.
Book Description
Just as macroeconomic models describe the overall economy within a changing, or dynamic, framework, the models themselves change over time. In this text Stephen J. Turnovsky reviews in depth several early models as well as a representation of more recent models. They include traditional (backward-looking) models, linear rational expectations (future-looking) models, intertemporal optimization models, endogenous growth models, and continuous time stochastic models. The author uses examples from both closed and open economies. Whereas others commonly introduce models in a closed context, tacking on a brief discussion of the model in an open economy, Turnovsky integrates the two perspectives throughout to reflect the increasingly international outlook of the field.
This new edition has been extensively revised. It contains a new chapter on optimal monetary and fiscal policy, and the coverage of growth theory has been expanded substantially. The range of growth models considered has been extended, with particular attention devoted to transitional dynamics and nonscale growth. The book includes cutting-edge research and unpublished data, including much of the author's own work.
Customer Reviews:
Methods of Macroeconomic Dynamics.......2000-03-27
Very good Book. Is easy and usefull to read. I recommend read it.
Book Description
This solutions manual is a valuable companion volume to the classic textbook Recursive Methods in Economic Dynamics by Nancy L. Stokey and Robert E. Lucas. The exercises in the Stokey and Lucas book are integral to the text, and thus, a reader cannot fully appreciate the text without understanding the results developed in the exercises. This manual provides detailed answers to the central exercises in Recursive Methods.
The authors' selection of exercises is designed to maximize the reader's understanding of Recursive Methods. Solutions are presented to every question in the core chapters on recursive methods, as well as most questions from the chapters on mathematical background. Some questions from the chapters on applications of these techniques to economic models have been reserved so as to provide instructors with a crucual "test bank" of questions.
Efficient and lucid in approach, this manual will greatly enhance the value of Recursive Methods as a text for self-study.
Customer Reviews:
hmmm.......2007-08-26
I found the solutions to part 3 weird. the proofs don't seem to be too logical. luckily I had math classes and don't have to learn the necessary analysis from the book. If you intend to do so, you need to be really smart with good error correction... In my opinion economists should not try to teach math.
Book Description
Macroeconomics increasingly uses stochastic dynamic general equilibrium models to understand theoretical and policy issues. Unless very strong assumptions are made, understanding the properties of particular models requires solving the model using a computer. This volume brings together leading contributors in the field who explain in detail how to implement the computational techniques needed to solve dynamic economics models. A broad spread of techniques are covered, and their application in a wide range of subjects discussed. The book provides the basics of a toolkit which researchers and graduate students can use to solve and analyse their own theoretical models.
Customer Reviews:
not well-written.......2002-01-12
I need to do some parameterized expectation work. I read Chapter 7. It is not well-written. The authors first introduce the general framework, and then introduce a series of examples. People would be stuck at the general framework part. They don't know WHY do we do that.
A better way to introduce this method would be to use one or two completely worked out examples, paying particular attention to explain the ideas behind doing what we are doing. This way people will know the ideas behind the method, even though not necessarily the general framework (who need to know the general framework anyway?) Then introduce the general framework, and more examples.
I agree.......2000-09-22
with the reviewer from Chile. This is a very good book covering a fairly wide range of material at a level that is surprisingly accessible. It is well edited, and makes solid use of the internet to provide programs for buyers to download and try for themselves. Highly recommended.
A complete survey of how to solve dynamic economies.......2000-09-13
This book has the merit of collecting many major recent contributions from authors that continuosly make serious research in numerical and computational methods of solving the now basic problems we face in macroeconomics principally (but that serves in other areas in economics too), that put them in a simple theoretic and practical way for the economist. It perfectly serves as an introductory book for graduate studies in this area and as an complete reference book for further research.
Book Description
This work provides a unified and simple treatment of dynamic economics using dynamic optimization as the main theme, and the method of Lagrange multipliers to solve dynamic economic problems. The author presents the optimization framework for dynamic economics in order that readers can understand the approach and use it as they see fit. Instead of using dynamic programming, the author chooses instead to use the method of Lagrange multipliers in the analysis of dynamic optimization because it is easier and more efficient than dynamic programming, and allows readers to understand the substance of dynamic economics better. The author treats a number of topics in economics, including economic growth, macroeconomics, microeconomics, finance and dynamic games. The book also teaches by examples, using concepts to solve simple problems; it then moves to general propositions.
Customer Reviews:
An alternative to Lucas, Sargent and recursive methods.......2004-01-18
Most grad students are taught to solve dynamic equilbrium problems using recursive methods. Two of the prominent books that I am familiar with are:
* Thomas Sargent's Dynamic Macroeconomics
* Lucas and Stokey's Recursive Methods in Economic Dynamics
(Note: I see that Sargent has another volume out, Recursive Macroeconomic Theory, with Lars Ljungqvist.)
Chow's book presents a Lagrangian method for dynamic optimization. This is a far easier approach than recursive methods, as anyone who is familiar with simple calculus will attest. Chow presents the method then --and this is the real value of this book-- systematically applies it to familiar market equilibrium, financial, business cycle, game theory, and growth models (all dynamic, of course).
BENEFITS:
* Chow's Lagrangian method removes mathematical obstacles to understanding important macroeconomic models
* Chow is a good writer, and this book is far easier to understand than the two books listed above
* This is a great reference for grad students looking for foundations for your own research
Average customer rating:
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Dynamic and Stochastic Efficiency Analysis: Economics of Data Envelopment Analysis
Jati K. Sengupta
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- Schaum's Outline of Financial Management
- Servant Leader
- Sight, Sound, Motion: Applied Media Aesthetics
- State-Directed Development: Political Power and Industrialization in the Global Periphery
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- StrengthsFinder 2.0: A New and Upgraded Edition of the Online Test from Gallup's Now, Discover Your Strengths
- The Analysis of Household Surveys: A Microeconomic Approach to Development Policy (World Bank)
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