Lars Peter Hansen and Thomas J. Sargent
- Published in print:
- 2013
- Published Online:
- October 2017
- ISBN:
- 9780691042770
- eISBN:
- 9781400848188
- Item type:
- book
- Publisher:
- Princeton University Press
- DOI:
- 10.23943/princeton/9780691042770.001.0001
- Subject:
- Economics and Finance, History of Economic Thought
A common set of mathematical tools underlies dynamic optimization, dynamic estimation, and filtering. This book uses these tools to create a class of econometrically tractable models of prices and ...
More
A common set of mathematical tools underlies dynamic optimization, dynamic estimation, and filtering. This book uses these tools to create a class of econometrically tractable models of prices and quantities. The book presents examples from microeconomics, macroeconomics, and asset pricing. The models are cast in terms of a representative consumer. While the book demonstrates the analytical benefits acquired when an analysis with a representative consumer is possible, it also characterizes the restrictiveness of assumptions under which a representative household justifies a purely aggregative analysis. The book unites economic theory with a workable econometrics while going beyond and beneath demand and supply curves for dynamic economies. It constructs and applies competitive equilibria for a class of linear-quadratic-Gaussian dynamic economies with complete markets. The book, based on the 2012 Gorman lectures, stresses heterogeneity, aggregation, and how a common structure unites what superficially appear to be diverse applications. An appendix describes MATLAB programs that apply to the book's calculations.Less
A common set of mathematical tools underlies dynamic optimization, dynamic estimation, and filtering. This book uses these tools to create a class of econometrically tractable models of prices and quantities. The book presents examples from microeconomics, macroeconomics, and asset pricing. The models are cast in terms of a representative consumer. While the book demonstrates the analytical benefits acquired when an analysis with a representative consumer is possible, it also characterizes the restrictiveness of assumptions under which a representative household justifies a purely aggregative analysis. The book unites economic theory with a workable econometrics while going beyond and beneath demand and supply curves for dynamic economies. It constructs and applies competitive equilibria for a class of linear-quadratic-Gaussian dynamic economies with complete markets. The book, based on the 2012 Gorman lectures, stresses heterogeneity, aggregation, and how a common structure unites what superficially appear to be diverse applications. An appendix describes MATLAB programs that apply to the book's calculations.
Paul Milgrom
- Published in print:
- 2006
- Published Online:
- January 2009
- ISBN:
- 9780199298839
- eISBN:
- 9780191711480
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199298839.003.0020
- Subject:
- Economics and Finance, History of Economic Thought
This chapter examines Samuelson's Le Chatelier principle of how the market responds to a change in parameters of demand and supply curves. It uses examples in demand theory, economic policy, and ...
More
This chapter examines Samuelson's Le Chatelier principle of how the market responds to a change in parameters of demand and supply curves. It uses examples in demand theory, economic policy, and empirical research to illustrate the principle. It also stresses the flexibility of the principle to adapt to changing assumptions. Changes from the optimizing agents to equilibrium systems whose primary use is to provide a foundation for understanding multipliers are observed. The chapter evaluates the performance of the principle performed when confronted with local optimization problems as in production function settings, and in positive feedbacks systems as in gaming situations. The principle is found progressive in that it is able to capitalize on symmetric relations among substitutes and complements. In that regard, the principle has extended research into multiplier analysis, a research area that will continue into the 21st century.Less
This chapter examines Samuelson's Le Chatelier principle of how the market responds to a change in parameters of demand and supply curves. It uses examples in demand theory, economic policy, and empirical research to illustrate the principle. It also stresses the flexibility of the principle to adapt to changing assumptions. Changes from the optimizing agents to equilibrium systems whose primary use is to provide a foundation for understanding multipliers are observed. The chapter evaluates the performance of the principle performed when confronted with local optimization problems as in production function settings, and in positive feedbacks systems as in gaming situations. The principle is found progressive in that it is able to capitalize on symmetric relations among substitutes and complements. In that regard, the principle has extended research into multiplier analysis, a research area that will continue into the 21st century.
