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New Approaches to Macroeconomic Modeling : Evolutionary Stochastic Dynamics, Multiple Equilibria, and Externalities as Field Effects - Masanao Aoki

New Approaches to Macroeconomic Modeling

Evolutionary Stochastic Dynamics, Multiple Equilibria, and Externalities as Field Effects

Paperback Published: 3rd August 1998
ISBN: 9780521637695
Number Of Pages: 308

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This book contributes substantively to state-of-the-art macroeconomic modeling by providing a method for modeling large collections of heterogeneous agents subject to non-pairwise externality called field effects, i.e. feedback of aggregate effects on individual agents or agents using state-dependent strategies. Adopting a level of microeconomic description which keeps track of compositions of fractions of agents by 'types' or 'strategies', time evolution of the microeconomic states is described by (backward) Chapman-Kolmogorov equations. Macroeconomic dynamics naturally arise by expansion of the solution in some power series of the number of participants. Specification of the microeconomic transition rates thus leads to macroeconomic dynamic models. This approach provides a consistent way for dealing with multiple equilibria of macroeconomic dynamics by ergodic decomposition and associated calculations of mean first passage times, and stationary probabilities of equilibria further provide useful information on macroeconomic behavior.

"Economists are indebted to Masanao Aoki. He has done an excellent job in bringing together a large amount of important material on stochastic dynamics, showing economists how to use it, and presenting it all in a clear and readable manner. The examples which he presents are interesting but surely only scratch the surface of what these tools can do to improve the realism and depth of economic modeling, macro and micro." Ken Judd, Hoover Institution, Stanford University

Introduction
Introduction
Simple illustrative and motivating examples
Empirical distributions: statistical laws in macroeconomics
Modeling Interactions
Modeling interactions I: Jump Markov processes
Modeling interactions II: master equations and field effects
Modeling interactions III: pairwise and multiple-pair interactions
Hierarchical Dynamics and Critical phenomena
Sluggish dynamics and hierarchical state spaces
Self-organizing and other critical phenomena in economic models
Appendices
Symbol Index
Subject Index
Table of Contents provided by Publisher. All Rights Reserved.

ISBN: 9780521637695
ISBN-10: 0521637694
Series: Evolutionary Stochastic Dynamics, Multiple Equilibria, and E
Audience: Professional
Format: Paperback
Language: English
Number Of Pages: 308
Published: 3rd August 1998
Publisher: CAMBRIDGE UNIV PR
Country of Publication: GB
Dimensions (cm): 22.94 x 15.34  x 1.8
Weight (kg): 0.42