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Cover -- Title Page -- Copyright Page -- Table of Contents -- Preface -- 1: Introduction -- 1.1 Dynamic General Equilibrium versus Traditional Macroeconomics -- 1.2 Traditional Macroeconomics -- 1.3 Dynamic General Equilibrium Macroeconomics -- 1.4 The Structure of This Book -- 2: The Centralized Economy -- 2.1 Introduction -- 2.2 The Basic Dynamic General Equilibrium Closed Economy -- 2.3 Golden Rule Solution -- 2.3.1 The Steady State -- 2.3.2 The Dynamics of the Golden Rule -- 2.4 Optimal Solution -- 2.4.1 Derivation of the Fundamental Euler Equation -- 2.4.2 Interpretation of the Euler Equation -- 2.4.3 The Intertemporal Production Possibility Frontier -- 2.4.4 Graphical Representation of the Solution -- 2.4.5 Static Equilibrium Solution -- 2.4.6 Dynamics of the Optimal Solution -- 2.4.7 Algebraic Analysis of the Saddlepath Dynamics -- 2.5 Real-Business-Cycle Dynamics -- 2.5.1 The Business Cycle -- 2.5.2 Permanent Technology Shocks -- 2.5.3 Temporary Technology Shocks -- 2.5.4 The Stability and Dynamics of the Golden Rule Revisited -- 2.6 Labor in the Basic Model -- 2.7 Investment -- 2.7.1 q-Theory -- 2.7.2 Time to Build -- 2.8 Conclusions -- 3: Economic Growth -- 3.1 Introduction -- 3.2 Modeling Economic Growth -- 3.3 The Solow-Swan Model of Growth -- 3.3.1 Theory -- 3.3.2 Growth and Economic Development -- 3.3.3 Balanced Growth -- 3.4 The Theory of Optimal Growth -- 3.4.1 Theory -- 3.4.2 Additional Remarks on Optimal Growth -- 3.5 Endogenous Growth -- 3.5.1 The AK Model of Endogenous Growth -- 3.5.2 Human Capital Models of Endogenous Growth -- 3.6 Conclusions -- 4: The Decentralized Economy -- 4.1 Introduction -- 4.2 Consumption -- 4.2.1 The Consumption Decision -- 4.2.2 The Intertemporal Budget Constraint -- 4.2.3 Interpreting the Euler Equation -- 4.2.4 The Consumption Function -- 4.2.5 Permanent and Temporary Shocks -- 4.3 Savings.

The definitive graduate textbook on modern macroeconomicsMacroeconomic Theory is the most up-to-date graduate-level macroeconomics textbook available today. This revised second edition emphasizes the general equilibrium character of macroeconomics to explain effects across the whole economy while taking into account recent research in the field. It is the perfect resource for students and researchers seeking coverage of the most current developments in macroeconomics.Michael Wickens lays out the core ideas of modern macroeconomics and its links with finance. He presents the simplest general equilibrium macroeconomic model for a closed economy, and then gradually develops a comprehensive model of the open economy. Every important topic is covered, including growth, business cycles, fiscal policy, taxation and debt finance, current account sustainability, and exchange-rate determination. There is also an up-to-date account of monetary policy through inflation targeting. Wickens addresses the interrelationships between macroeconomics and modern finance and shows how they affect stock, bond, and foreign-exchange markets. In this edition, he also examines issues raised by the most recent financial crisis, and two new chapters explore banks, financial intermediation, and unconventional monetary policy, as well as modern theories of unemployment. There is new material in most other chapters, including macrofinance models and inflation targeting when there are supply shocks. While the mathematics in the book is rigorous, the fundamental concepts presented make the text self-contained and easy to use. Accessible, comprehensive, and wide-ranging, Macroeconomic Theory is the standard book on the subject for students and economists.The most up-to-date graduate macroeconomics textbook available todayGeneral equilibrium macroeconomics and the latest advances covered fully and completelyTwo new chapters investigate banking and monetary policy, and unemploymentAddresses questions raised by the recent financial crisisWeb-based exercises with answersExtensive mathematical appendix for at-a-glance easy referenceThis book has been adopted as a textbook at the following universities:American UniversityBentley CollegeBrandeis UniversityBrigham Young UniversityCalifornia Lutheran UniversityCalifornia State University - SacramentoCardiff UniversityCarleton UniversityColorado CollegeFordham UniversityLondon Metropolitan UniversityNew York UniversityNortheastern UniversityOhio University - Main CampusSan Diego State UniversitySt. Cloud State UniversityState University Of New York - Amherst CampusState University Of New York - Buffalo North CampusTemple University - MainTexas Tech UniversityUniversity of AlbertaUniversity Of Notre DameUniversity Of OttawaUniversity Of PittsburghUniversity Of South Florida - TampaUniversity Of TennesseeUniversity Of Texas At DallasUniversity Of WashingtonUniversity of Western OntarioWesleyan UniversityWestern Nevada Community College

AbstractThis article examines how the currently high level of the UK's debt–GDP ratio can be reduced. We consider whether anything can be learned from previous experience over the last 120 years by examining the contributions both to the increase in the debt–GDP ratio and to the reduction of the debt–GDP ratio by various components of the government budget constraint: the primary surplus, growth, inflation, and interest rates and payments. We also examine the effectiveness of policy in influencing these components. We conclude by considering what level of UK debt might be sustainable and whether this is economically and politically achievable.

This lecture is about how best to evaluate economic theories in macroeconomics and finance, and the lessons that can be learned from the past use and misuse of evidence. It is argued that all macro/finance models are 'false' so should not be judged solely on the realism of their assumptions The role of theory is to explain the data. Models should be judged by their ability to do this. Data‐mining will often improve the statistical properties of a model but does not improve economic understanding. These propositions are illustrated from the last 50 years of macro and financial econometrics.