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Aaron condition, see Pensions, Aaron condition, 611

Aaron, H. J., 605, 611

Abel, A. B., 27, 59, 104, 571, 608, 651 Actuarial fairness, 543, 546

Actuarial notes, 543, 581 yield on, 544, 550

AD curve, 16, 31

AD-AS model, see Models, AD-AS, 29 Adaptive expectations hypothesis (AEH), see

Expectations, adaptive, 8 Adjustment costs

capital stock, see Investment, adjustment costs for, 39

labour force, 105

prices, see Price adjustment costs, 380

Adjustment speed, see Transitional dynamics,

45

Age-dependent worker productivity, 568 Agenor, P. -R., 310

Aggregation in Blanchard-Yaari model, 549 Aghion, P., 461, 470, 475

Aging, see Population, aging of, 618 AK model, see Models, AK, 451

Akerlof, G. A., 186, 384, 387, 392, 396, 653

Alesina, A., 247

Allais, M., 590 Allen, R. G. D., v, 59

Alogoskoufis, G., 583 Altruism, 150, 626 Amable, B., 690 Anderson, S. P., 212

Andolfatto, D., 526, 529 Aoki, M., 310

Apostol, T. M., 678

Argy, V., 275 Armington, P. S., 275

Arrow, K. J., 331, 360, 475, 621, 632

AS curve, 9

Aschauer, D. A., 475, 477, 529, 583, 633 Asymptotic variance, 75, 77

Atkinson, A. B., 255, 259, 353 Attanasio, 0. P., 158, 508

Attfield, C. L. F., 79

Auerbach, A. J., 43, 604, 620, 621, 643,

646-648, 651, 652 Axelrod, R., 246

Ayres, F., 667, 689

Azariadis, C., 37, 177, 186, 510, 612, 623, 624, 626, 633, 700

Azariadis-Drazen model, see Models, Azariadis-Drazen, 624

Backus, D., 258

Bailey, M. J., 340

Balanced growth path, 407, 460, 472, 624 Ball, L., 396, 402

Bargaining

effect of unemployment on, 204 in efficient bargaining model, 194 in matching model, 221

in right-to-manage model, 192 relative union strength in, 192 relative worker strength in, 223

Barro, R. J., 23, 67, 79, 106, 124, 134, 139, 152, 158, 242, 246, 258, 407, 409,

415, 416, 423, 424, 443, 449, 451,

454, 456, 475, 477, 502, 529, 578, 650, 652

Barsky, R. B., 151

Batina, R. G., 356 Baumol, W. J., 13, 59, 314

Baxter, M., 475, 477, 482, 484, 492, 494, 496,

502

Bean, C. R., 163, 186 Becker, G. S., 651

Index

Beggar-thy-neighbour policy, 287, 288, 290 Belan, P., 615, 617, 618

Benassi, C., 402

Benassy, J. -P., 133, 360, 361, 402, 461, 463,

465-468, 529

Benhabib, J., 403, 459, 460, 475, 529

Bentham, J., 638

Bequests, 146, 548

and Ricardian equivalence, 149, 423 Berck, P., 658

Bergen, M., 402

Bergson, A., 608

Bernanke, B. S., 27

Bernheim, B. D., 152 Bertrand competition, 383 Beveridge curve, 224

Bewley, T., 321, 657

Bhandari, J. S., 310

Bierwag, G. 0., 651 Binmore, K., 192

Birth, 443, 548 date of, 546

Bismarck, 0. von, 596 Blackburn, K., 310

Blanchard, 0. -J., v, 25, 27, 41, 100, 101,

199-201, 203, 204, 213, 224, 233,

330, 380, 391, 393, 394, 396, 397, 402, 429, 479, 510, 541, 545, 569, 573, 576, 583, 589, 592, 596, 598,

652, 653, 693

Blanchard-Yaari model, see Models, Blanchard-Yaari, 540

Blinder, A. S., 50-52, 59, 133, 134, 657 Blinder-Solow model, see Models,

Blinder-Solow, 50

Blueprints, 463

accumulation of, 463, 470, 471 price of, 464

rate of return on, 464

Bohn, H., 647

Bond, E. W., 460, 475

Booth, A. L., 192, 212 Bootstrap effect, 124, 127, 130

Borrowing constraint, see Ricardian equivalence, 144

Bosworth, B., 650

Bovenberg, A. L., 435, 439, 529, 554, 575, 578, 580, 583

Boyce, W. E., 678, 684, 694 Branson, W. H., 275, 279, 288, 652

Braun, R. A., 529 Breyer, E, 608-612, 617

Brock, W. A., 340, 344, 346, 348, 356

Broer, D. P., 468

Browning, M., 657

Bruno, M., 657 Budget constraint

of government, see Government budget constraint, 108

of household, see Household budget constraint, 108

Buiter rule, see Debt, stabilization rule for, 421

Buiter, W. H., 39, 59, 77, 105, 156, 158, 310,

421, 447, 548, 555, 556, 583, 605,

606, 643, 647, 648, 651 Bulow, J., 186

Burda, M., 27

Burmeister, E., 408, 409, 411, 416, 449, 475 Burness, H. S., 631

Burtless, G., 650

Caballero, R. J., 105

Calibration, 392, 493, 503, 529, 566

Calmfors, L., 198

Calvo, G. A., 76, 310, 398, 605, 629, 631,

638, 640

Campbell, J. Y., 478, 487, 506, 508, 510, 511,

529, 536, 537

Canton, E., 529 Canzoneri, M., 310

Capital

accumulation of, 40, 81, 406, 469, 481,

505, 551, 593, 612, 619 efficiency units of, 409

Human, see Human capital, 417 mobility, see Open economy, financial

openness of, 265

shadow price of installed, see Tobin's q, 82 share, 413

Card, D., 524

Carter, M., 79

Cash-in-advance constraint, 320 Cass, D., 313, 475

Cassou, S. P., 529

Chadha, B., 76

Chamley, C., 356

Characteristic root, see Eigenvalue, 509 Chari, V. V., 356, 529

Chatterjee, S., 529

1

Chiang, A. C., 141, 148, 5 672, 674, 675.

Chirco, A., 402

Cho, J. 0., 529 Chow, G. C., 505, 703

Christiano, L. J., 356, 503

Chung, J. W., 360 Circe, 236

Clarida, R., 402

Classical dichotomy, 18, .

Clower constraint, see Ca constraint, 3:

Clower, R. W., 106, 1 - Cobb-Douglas

production function, sr function, Cobl

utility function, sect:

Cobb-Dol._ Cogley, T., 501, 520, SZ;

Cole, H. L., 526, 529

Colombo, C., 402 Command optimum, see

first-best, 250

Commitment, 237, 630 and delegation, 247 and reputation, 242 Comparative dynarn 4

Competition, see M,

Perfect col,,pel

Conlisk, J., 475

Consols, 50, 100

Constant absolute risk Constant Elasticity 0:

Production r

Elasticity of Su

Utility functia

Elasticity of Su Constant relative risk a Constant returns to sc,-

Production : returns to scar

Consumption composite, 275, 360 function

in Blanchard-Yaari a in monopolistic corn in Ramsey model, 42 life-cycle pattern of, S4 two-period model of, 1 with wealth effects, 51

617

fl 346,348,356

Government budget it, 108

, usehold budget it. 108

, stabilization rule for, 421

77, 105, 156, 158, 310, 548, 555, 556, 583, 605,

647, 648, 651

!`)9, 411, 416, 449, 475

3, 503, 529, 566

398, 605, 629, 631,

487, 506, 508, 510, 511, 5 37

-n 81, 406, 469, 481,

593, 612, 619

409

in capital, 417 economy, financial f, 265

alled, see Tobin's q, 82

-'raint, 320

Eigenvalue, 509

Chiang, A. C., 141, 148, 547, 667, 669, 670, 672, 674, 675, 678, 700, 703

Chirco, A., 402

Cho, J. O., 529 Chow, G. C., 505, 703

Christiano, L. J., 356, 503, 529

Chung, J. W., 360 Circe, 236 Clarida, R., 402

Classical dichotomy, 18, 378

Clower constraint, see Cash-in-advance constraint, 320

Clower, R. W., 106, 107, 319

Cobb-Douglas

production function, see Production function, Cobb-Douglas, 111 utility function, see Utility function,

Cobb-Douglas, 109

Cogley, T., 501, 520, 529 Cole, H. L., 526, 529 Colombo, C., 402

Command optimum, see Social optimum, first-best, 250

Commitment, 237, 630 and delegation, 247 and reputation, 242

Comparative dynamics, 487

Competition, see Monopolistic competition,

Perfect competition, 2 Conlisk, J., 475

Consols, 50, 100

Constant absolute risk aversion, 425 Constant Elasticity of Substitution (CES), see

Production function, Constant

Elasticity of Substitution, 233, see

Utility function, Constant Elasticity of Substitution, 233

Constant relative risk aversion, 329, 425 Constant returns to scale (CRTS), see

Production function, constant returns to scale, 2

Consumption composite, 275, 360 function

in Blanchard-Yaari model, 548, 549

in monopolistic competition model, 367 in Ramsey model, 422

life-cycle pattern of, 546, 589 two-period model of, 140, 541, 591 with wealth effects, 51

Index

Consumption possibility frontier, 599 Convergence

absolute, 415 conditional, 415

in Ramsey model, 431

in Solow-Swan model, 413 speed of, 416, 418, 431

in open economy, 432

in unit-elastic RBC model, 494, 516 Cooley, T. E, 503, 529

Cooper, R. N., 310

Cooper, R. W., 403, 529

Cooperative production factors, 2, 561, 575, 634

Corneo, G., 618

Corporatism, 198

Correia, I., 356

Correspondence principle, 30, 47, 67, 372, 637

Corsetti, G., 156

Cournot competition, 364 Cramer's rule, 663

Credibility

and admissible generational discounting, 631

and reputation, 242, 244 of monetary policy, 241 of tax policy, 249, 255

of union's wage demand, 206 Creditor country, 573

Croix, D. de la, 651

Cross, R., 59, 212

Crowding in

due to aging, 620

Crowding out

due to PAYG pensions, 601

in Blanchard-Yaari model, 554 in IS-LM model, 17, 47

in Ramsey model, 440, 555 in Solow-Swan model, 420

in unit-elastic RBC model, 485, 486, 495 in Well model, 448

Cuddington, J. T., 133

Cukierman, A., 258

Current account dynamics, 433, 573, 583, 694

Danthine, J. P., 503, 526, 529

Danziger, L., 397, 402

Dasgupta, P., 192

737

Index

Davies, G., 311

Davis, S. J., 233

Death, 540

instantaneous probability of, 543, 545 Deaton, A., 158, 362, 557

Debt

stabilization rule for, 421 Debtor country, 573

DeCanio, S. J., 67

Deficit finance, see Government budget constraint, 53

Demery, D., 79

Demmel, R., 617

Dependency ratio, 618 Devereux, M., 212, 529

Diagonalization of matrices, 37, 665 Diamond, P. A., 213, 220, 224, 233, 356, 403,

526, 589, 590, 592, 595, 605, 607,

615, 638, 650, 657, 695

Diamond-Samuelson model, see Models,

Diamond-Samuelson, 590 Difference equations, 695

first-order, 37

first-order nonlinear, 593, 614, 619 system of, 37

system of stochastic, 508, 509

Differential equations, 675

first-order, 32, 407, 410, 416, 466, 467 system of, 419, 490, 570, 575, 576

DiPrima, R. C., 678, 684, 694

Disequilibrium model, see Models, quantity rationing, 107

Distribution

exponential, 217, 545, 546 lognormal, 508

normal, 63, 333

of planning horizon, 541

Dixit, A. K., 81, 105, 122, 259, 360, 372, 402,

424, 462, 675, 703

Dixon, H. D., 360, 368, 378, 382, 402

Dobell, A. R., 408, 409, 411, 416, 449, 475 Donaldson, J. B., 503, 526, 529

Dorfman, R., 81

Dornbusch model, see Models, Dornbusch, 105

Dornbusch, R., 105, 297, 310, 657 Dotsey, M., 487

Drazen, A., 133, 259, 356, 623, 626 Dreze, J., 328, 330

Driffill, J., 198, 258

Dual decision hypothesis, 107 Dual labour markets, 186, 197 Duality

indirect utility function, 188, 254, 363,

374, 381, 602, 613 optimal value function, 385 true price index, 361, 363, 558

two-stage budgeting, 275, 361, 381, 557 unit cost function, 462

Duck, N. W., 79

Dunlop, J., 190

Dutta, S., 402

Dynamic efficiency, see Golden rule; Oversaving, 411

Dynamic inconsistency, 207, 209, 237, 249, see Credibility, 249, 255, 629

Dynamic optimization, 700

Dynamics, see Transitional dynamics, 233

Eberly, J. C., 105 Eckstein, Z., 626-628, 632

Edelberg, W., 529

Education, 622 production of, 456

rationale for compulsory, 626, 632 training unskilled workers, 170

Effective behaviour of firms, 115

of households, 113 Efficiency wages, 178, 526

Efficient bargaining union, see Trade union, efficient bargaining, 194

Effort function, 179, 180

Eichenbaum, M., 503, 529

Eigenvalue, 430, 435, 448, 475, 491, 509, 575, 576, 664

equal to unity, 35 equal to zero, 35

Eigenvector, 665

Einzig, P., 311

Eisner, R., 59

Elasticity

of demand for goods variety, 365 of labour demand, 171, 208, 279

of labour supply, 26, 97, 255, 382, 485, 611 of substitution

between capital and labour, 97, 200, 250, 413, 431

between consumer good varieties, 360 between consumption and leisure, 172

between consumptia semi-, 279

Elaydi, S. N., 695, 696, Employment lottery, se. 44

525 Endogenous growth modi

and human capital, _St Lucas-Uzaw.

456 d and R&D efforts, see Nia,

Grossman-H. I .

easy substitution tx.0 labour, 449

with overlapping germs

Energy, 572 demand for, 575 world price of, 572

Envelope theorem, 385, 6

Equilibrium

bad and good, 201 in capital market. in financial capi

in foreign exchange ma in goods market, 112. 4 in labour market, 9. 10,

530, 561, - 4 in matching model, .2- in rental market for cap

Walrasian, 111 Essential production fat •

Ethier, W. J., 462, Euler equation

aggregate, 550, 570, 57,i for household con ,

453, 464, - - 591, 611,

for tax rates, 154 in OLG model, 445

socially optimal, 629. 6, with capital uncert_.

Euler's theorem, 97, 427 Evans, C. L., 503 Exchange rate

depreciation of, 264 fixed, 123, 266, 267 flexible, 123, 269 overshooting of, see Ovi

Expectations

basis, 107 . 186, 197

-“on, 188, 254, 363, 2, 613

385 363, 558

g. 275, 361, 381, 557 462

to Golden rule; 8,411

207, 209, 237, 249, 249, 255, 629

n, 700

„tonal dynamics, 233

, 632

ilsory, 626, 632 •markers, 170

I

526

see Trade union, aining, 194

,529 448, 475, 491, 509,

variety, 365 171, 208, 279

► 97, 255, 382, 485, 611

^ 1 labour, 97, 200, 250,

good varieties, 360 *ion and leisure, 172

between consumption and money, 321 semi-, 279

Elaydi, S. N., 695, 696, 700

Employment lottery, see Indivisible labour,

525

Endogenous growth models, 449 and human capital, see Models,

Lucas-Uzawa; Azariadis-Drazen, 456

and R&D efforts, see Models, Romer;

Grossman-Helpman , 461 "capital-fundamentalist", 449

AK, see Models, AK, 451

easy substitution between capital and labour, 449

with overlapping generations, 583 Energy, 572

demand for, 575 world price of, 572

Envelope theorem, 385, 640 Equilibrium

bad and good, 201

in capital market, 593, 600, 605

in financial capital market, 136, 453, 552 in foreign exchange market, 269

in goods market, 112, 465, 481, 552

in labour market, 9, 10, 112, 174, 366, 465, 530, 561, 584

in matching model, 223

in rental market for capital, 530, 561, 584 Walrasian, 111

Essential production factors, 407, 634 Ethier, W. J., 462, 468

Euler equation aggregate, 550, 570, 572

for household consumption, 137, 316, 425, 453, 464, 480, 506, 543, 545, 548, 591, 611, 627

for tax rates, 154 in OLG model, 445

socially optimal, 629, 639 with capital uncertainty, 329

Euler's theorem, 97, 427 Evans, C. L., 503 Exchange rate

depreciation of, 264 fixed, 123, 266, 267 flexible, 123, 269

overshooting of, see Overshooting, 301 Expectations

Index

adaptive, 8, 31, 65 conditional, 64 constraint, 130

perfect foresight, 8, 135, 297, 423, 478, 610, 652

rational, 9, 60, 130, 237, 402, 477, 510, 652 unconditional, 63

Walrasian, 126

Expected remaining lifetime, 546, 567 Expected utility theory, 328, 541

Factor price frontier, 490, 562, 602, 603 Factor scarcity effect, 560, 563-565

empirical guess for, 567 Fall-back position

of firm, 192, 222 of union, 192 of worker, 222

Farber, H. S., 212 Farmer, R. E. A., v, 403 Faruqee, H., 583 Favero, C., 79 Feenstra, R. C., 319, 321 Fehr, H., 648, 651

Feldstein, M. S., 27, 151, 310, 609, 650 Felicity function, 135

additively separable, 342 exponential, 425

Inada-style conditions for, 423, 590 iso-elastic, 329, 425, 457

linear, 457, 478, 525

logarithmic, 137, 209, 326, 478, 546, 569, 594, 602

Ferguson, C. E., 97

Fertility, 619, 626

Financial wealth, see Wealth, financial, 135 Finite horizons, 145, 541, 546, 589

Firms

in matching model, 218 iso-profit curve, 188

market value of, 40, 81, 426, 481, 551 monopolistically competitive, 463

Fiscal increasing returns, 199 and wage moderation, 201 and wage tax deal, 201

Fiscal policy

in Blanchard-Yaari model, 554 in Blinder-Solow model, 52 in Classical model, 18, 113

in Dornbusch model, 300

739

Index

in extended Ramsey model, 477 in IS-LM model, 17

with perfect foresight, 102 in IS-LM model, 21

in menu cost model, 389

in Mundell-Fleming model, 267, 268, 270 in quantity rationing model, 118

in Ramsey model, 440

in Solow-Swan model, 419 in the open economy, 123 in two-country world, 286

in unit-elastic RBC model, 483 role of persistence, 496

welfare effect of, 374

with stock-flow interaction, 47 Fischer model, see Models, Fischer, 72

Fischer, S., v, 25, 41, 71, 75, 76, 79, 131, 249,

330, 356, 429, 475, 479, 592, 596, 598, 653, 657

Fisher, I., 18, 158, 311

Fisher, J. D. M., 529 Fisher, W. H., 440, 475

Fleming, J. M., 308, 310

Flood, R. P., 310

Flows in labour market, see Matching model, 232

Foley, D. K., 529

Ford, H., 179

Frenkel, J. A., 304, 310, 583 Friedman rule, 23, 340, 391 and Ramsey taxation, 354

critiques of, 345 demonstration of, 343 distorted, 348

Friedman, B. M., 67

Friedman, M., 21, 23, 27, 68, 339, 380

Frisch demand for leisure, 561

Frydman, R., 79

Fudenberg, D., 403

Fuente, A. de la, 669, 675, 678, 700, 703

Full consumption, 557

Full income, 109, 254, 362, 377

Full liquidity rule, see Friedman rule, 340

Gahvari, E, 356

Gall, J., 402, 529, 657 Galor, 0., 594, 651 Gartner, M., 310

Generational accounting, 643, 645 advantages of system of, 643

in Diamond-Samuelson model, 643 objections against method of, 647

Generational disconnectedness, 443

Generational turnover, 550, 553 Generational turnover effect, 560, 563-565

empirical guess for, 567 Georges, C., 529

Gertler, M., 402, 583

Giavazzi, E, 434, 692 Gilchrist, S., 529

Giovannini, A., 573, 583

Glomm, G., 475, 651 Gokhale, J., 643, 646, 647, 651

Golden rule, 410, 428, 482, 532, 553, 560, 604, 613

and dynamic efficiency, 411 biological-interest-rate consumption-, 595 modified, 429

for private capital, 641

for public capital, 638, 639, 642 of public finance, 152, 153, 170, 642 production-, 595

savings rate in, 411 Goodfriend, M. S., 356, 402, 653

Goods market equilibrium (GME), see Equilibrium, in goods market, 112

Gordon, D. B., 242, 246, 258 Gordon, R. H., 651

Gordon, R. J., 27, 402 Gottfries, N., 212

Gould, J. P., 59

Government budget constraint, 50, 111, 199,

200, 252, 254, 367, 454, 481, 506,

556

and bond financing, 54, 420 and measurement of deficit, 642 and money financing, 53

and tax financing, 419

bond financing in static model, 369, 375 intertemporal, 136, 140, 153, 442, 552,

635, 643, 644

Gramlich, E. M., 633

Grandmont, J. -M., 651

Gray, J. A., 79

Great ratios, 484, 516, 566

Greenwood, J., 475, 485, 529 Griliches, Z., 475

Grilli, V., 247

Groot, H. L. E de, 466, 468 Gross substitutes, 169

Grossman, G. M., 461, 462

Grossman, H. I., 106, 124

Grossman, S. J., 67

Grossman-Helpman

Grossman-Help

Grout, P. A., 212

Grove, M. A., 651

Growth

and the investment su

of labour-augmenting te4

stylized facts about, 404

Gylfason, T., 475

Haavelmo, T., 389

Hacche, G., 475

Hairault, J. -0., 529 Hall, R. E., 477, 502, 5,1.y

Haltiwanger, J. C., 233

Hamberg, D., 475

Hamermesh, D. S., 2

Hamiltonian, 701 current-value, 81, 44:

701

Hamlet, 133, 359 Hammond, P. J., 143,

700 Hansen, C. T., 4.2. Hansen, G. D., 522-525

Hansen, L. P., 508, 529, 6' - Harrison, R., 638

Harrod neutrality, see Tec.

409

Hart, 0 D., 402

Haveman, R., 642, 651

Hayashi, E, 83, 572

Hazard rate, 217, 543. age-independent, 545

Head, A. C., 529 Heckman, J. J., 173, 529.

Heijdra, B. J., 370, 372, 3 - 485, 529, 554

Helpman, E., 356, 461, 4c

Henderson, D. W., 310 Hendry, D. E, 79 Henry, J., 690

Hercowitz, Z., 485, 529 Hicks neutrality, see TeL.Ing

409 Hicks, J. R., 27

Hirshleifer, J., 328, 331, 3

Ln model, 643 tethod of, 647 ht-tedness, 443

553

Ct, 560, 563-565

547, 651

S2, 532, 553, 560,

Icy, 411

to consumption-, 595

111 r-11

8, 639, 642 2. 153, 170, 642

, 402, 653

- n (GME), see

in goods market, 112 5, 258

I

rstraint, 50, 111, 199,

4. 367, 454, 481, 506,

420 deficit, 642

53

9

model, 369, 375

153, 442, 552,

4

i, 529

Grossman, G. M., 461, 462, 466, 470, 475

Grossman, H. I., 106, 124

Grossman, S. J., 67

Grossman-Helpman model, see Models, Grossman-Helpman, 461

Grout, P. A., 212

Grove, M. A., 651 Growth

and the investment subsidy, 453

of labour-augmenting technology, 409 stylized facts about, 404

Gylfason, T., 475

Haavelmo, T., 389

Hacche, G., 475 Hairault, J. -0., 529 Hall, R. E., 477, 502, 529

Haltiwanger, J. C., 233 Hamberg, D., 475

Hamermesh, D. S., 28, 105 Hamiltonian, 701

current-value, 81, 429, 459, 464, 467, 479,

701

Hamlet, 133, 359

Hammond, P. J., 143, 667, 669, 675, 678, 700

Hansen, C. T., 402

Hansen, G. D., 522-525

Hansen, L. P., 508, 529, 657

Harrison, R., 638

Harrod neutrality, see Technological change, 409

Hart, 0 D., 402 Haveman, R., 642, 651

Hayashi, F., 83, 572

Hazard rate, 217, 543, 581 age-independent, 545

Head, A. C., 529

Heckman, J. J., 173, 529, 657

Heijdra, B. J., 370, 372, 375, 377, 402, 468,

485, 529, 554, 557, 572, 583 Helpman, E., 356, 461, 462, 466, 470, 475 Henderson, D. W., 310

Hendry, D. E, 79

Henry, J., 690 Hercowitz, Z., 485, 529

Hicks neutrality, see Technological change, 409

Hicks, J. R., 27

Hirshleifer, J., 328, 331, 333

Index

Hoel, M., 186

Homburg, S., 617

Homer, 236, 257

Hoover, K. D., 79

Horioka, C., 310 Horn, H., 212 Hornstein, A., 529

Horst, A. van der, 572, 583 Hosios, A. J., 233

Household budget constraint, 5, 108, 252, 315, 321, 459, 464

adjusted, 352

intertemporal, 135, 139, 147, 253, 350, 424, 479, 546, 590, 597, 610, 623, 627, 634, 644

Howarth, R. B., 651

Howitt, P., 403, 461, 470, 475 Huang, K. X. D., 529

Huffman, G. W., 485, 529

Human capital

accumulation of, 457, 621, 622 and education, 626

and physical capital, 469, 623 in Lucas-Uzawa model, 457 in Solow-Swan model, 417

Human wealth, see Wealth, human, 136 Hume, D., 18, 123, 263

Hysteresis

and trade unions, 204 in AD-AS model, 35, 692

in open economy Ramsey model, 434, 437 solving models with, 690

Ihori, T., 356, 612, 613, 642, 651

Implicit contracts, 177

Implicit function theorem, 34, 531, 584, 619, 667

Impulse response functions, 535, 684 for government spending shocks, 492 for stochastic technology shocks, 511 sensitivity of, 519

Inada conditions, 406, 413, 427, 448, 452, 551, 570, 610

Inada, K. -I., 406 Indivisible labour, 524 Inefficiency

and wage bargaining, 193 Inessential production factors, 250, 450 Infinite horizons, 423

Inflation

741

Index

cheating solution for, 241, 243 optimal enforceable rate of, 246 public finance approach to, 348 under discretion, 239, 242 under rule, 240, 242

Inflation aversion

of median voter, 248 of policy maker, 238

Information set, 63, 238

Inheritance, 146

Innovation, 465, 466 optimal rate of, 467, 468

Innovations, see Stochastic innovations, 72

Instantaneous utility function, see Felicity function, 135

Intergenerational knowledge transfers, 623, 625

the role of parents in, 626

Intergenerational redistribution, 554, 565,

607, 629, 639

Internal propagation mechanism, 501, 529 weakness of, 520

International policy coordination, 291, 310 Intertemporal separability, 557, 640

Intertemporal substitution elasticity, 425,

452, 457, 485, 524, 543, 546, 591 Intragenerational fairness, 609

Intriligator, M. D., 81, 376, 429, 667, 675, 703 Inventories, 100

Investment accelerator

in extended Ramsey model, 492 accelerator theory of, 45

adjustment costs for, 39, 80, 207, 432, 572 and trade unions, 206

installation function for, 207, 433, 572 irreversibility of, 104, 206

policy, 44, 82 public, 153, 170

and growth, 454, 475

in Diamond-Samuelson model, 633 without adjustment costs, 427, 481, 551

Ireland, P. N., 475

IS-LM model, see Models, IS-LM, 11 Isard, P., 583

Jackman, R., 159, 162, 163, 186, 199 Jacobian matrix, 37, 298, 435, 448, 476, 490,

509, 575, 576, 668 Jevons, W. S., 311

Johansson, P. -0., 133

John, A., 403, 651

Jones, C. I., 470, 471, 475

Jones, L. E., 353, 475, 650

Jones, R.A., 311

Jonsson, G., 529

Judd, K. L., 529, 561, 694

Kaganovich, M., 651 Kahn, C. M., 510 Kahn, R. E, 17

Kaldor, N., 404 Kamien, M. I., 703 Katz, L. F., 186

Kehoe, P. J., 356, 529 Kennan, J., 398

Keuschnigg, C., 617 Keynes effect, 68

Keynes, J. M., 13, 14, 17-19, 71, 374, 403, 657

Keynes-Ramsey rule, see Golden rule, modified, 429

Keynesians versus monetarists, see Monetarists versus Keynesians, 23

Khang, C., 651

Killingsworth, M. R., 173 Kimball, M. S., 529

King, R. G., 400, 402, 451, 475, 477, 478, 482, 484, 492-494, 496, 502, 503, 512, 515, 518, 522, 524, 529, 653

Kiyotaki, N., 356, 380, 381, 391, 393, 394, 396, 402, 653

Klamer, A., 28

Klein, M. W., 658, 667, 669, 675, 678, 700,

703 Klein, P., 529

Kletzer, K. M., 605, 606, 651

Klundert, Th. van de, 475

Koopmans, T. C., 475 Koskela, E., 212

Kotlikoff, L. J., 186, 604, 620, 621, 643,

646-648, 651, 652 Kouri, P. J. K., 310

Kreyszig, E., 667, 678, 681, 694

Krugman, P., 24

Kuhn-Tucker conditions, 148, 316, 317, 320, 322, 325, 622, 627, 673, 702

Kurz, M., 632

Kydland, E E., 237, 477, 503, 522, 529

L'HOpital's rule, 425, 449 Labour I

civil servants, 365 demand for, 1, 82, 111, 1 efficiency units of, 179, 4 leisure choice, 5, 109, -;

611 1 skilled and unskilled, 1 c - supply of, 5, 169

income effect, 7, 173 intertemporal deci , substitution effect, 7, 1

Labour market

stylized facts about, 159 Labour market equil: .

Equilibrium, in L

Laffer curve, 24, 199 Laffer, A., 24 Lagrange multiplier m,

148, 154, 172 315, 317, 32_

505, 628, 638. o. Laidler, D., 27

Lancaster, P., 667, 68' Lansing, K. J., 529 Lapham, B. J., 529 Laplace transform, 533. 5 Law of iterated expe. Lawler, P., 382, 402 Laxton, D., 583

Layard, R., 159, 162, 163, 11 Leahy, J. V., 105 Leapfrogging effect, 180

and tax progressivity,

Leibfritz, W., 651

Leibnitz's rule, 547, 549, ,7 Leijonhufvud, A., 133 Leonard, D., 703

Leontief utility function, see Leontief, 233

Leontief, W., 192 Levine, R., 451 Levy, D. et al., 402

Life expectancy, see Expecte lifetime, 546

Life-insurance, 543, 546, Lifetime uncertainty, 541 Ligthart, J. E., 372, 402, 557 Lindbeck, A., 212

1, 17-19, 71, 374, 403,

see Golden rule, , 429

ionetarists, see

versus Keynesians, 23

, 173

451, 475, 477, 478, 492-494, 496, 502, 503, 518, 522, 524, 529, 653 10, 381, 391, 393, 394, 653

- 669, 675, 678, 700,

i06, 651 475

5

604, 620, 621, 643, 4 R1, 652

B. 681, 694

ions, 148, 316, 317, 320, 4 22, 627, 673, 702

177,503,522,529

L'HOpital's rule, 425, 449 Labour

civil servants, 365

demand for, 1, 82, 111, 188, 200, 279, 575 efficiency units of, 179, 409, 458, 568, 622 leisure choice, 5, 109, 480, 506, 525, 558,

611

skilled and unskilled, 167 supply of, 5, 169

income effect, 7, 173

intertemporal decision about, 478, 557 substitution effect, 7, 173

Labour market

stylized facts about, 159

Labour market equilibrium (LME), see

Equilibrium, in labour market, 112 Laffer curve, 24, 199

Laffer, A., 24

Lagrange multiplier method, 43, 109, 137, 148, 154, 172, 238, 250, 253, 254, 315, 317, 320, 321, 324, 351, 353, 505, 628, 638, 671

Laidler, D., 27 Lancaster, P., 667, 687 Lansing, K. J., 529 Lapham, B. J., 529

Laplace transform, 533, 587, 678 Law of iterated expectations, 74 Lawler, P., 382, 402

Laxton, D., 583

Layard, R., 159, 162, 163, 186, 199 Leahy, J. V., 105

Leapfrogging effect, 180 and tax progressivity, 183

Leibfritz, W., 651

Leibnitz's rule, 547, 549, 678 Leijonhufvud, A., 133 Leonard, D., 703

Leontief utility function, see Utility function,

Leontief, 233 Leontief, W., 192 Levine, R., 451

Levy, D. et al., 402

Life expectancy, see Expected remaining lifetime, 546

Life-insurance, 543, 546, 581 Lifetime uncertainty, 541 Ligthart, J. E., 372, 402, 557 Lindbeck, A., 212

Index

Linear homogeneity, see Constant returns to scale, 97

Linearization of nonlinear systems, 430, 435, 448, 487, 506, 563, 574

Liquidity preference function, see Money, demand for, 14

Liquidity trap, 14

under rational expectations, 79 Liu, Z., 529

Liviatan, N., 356

Ljungqvist, L., v, 352, 353, 355, 356, 529, 538, 652

Lockwood, B., 212 Locomotive policy, 286, 290 LOfgren, K. -G., 133

Long, J. B., 477

Long, N. V., 703

Lordon, E, 690

Lottery model, see Indivisible labour, 525

Loury, G. C., 651

Love of variety, see Preference for diversity,

360

Lucas critique, 70, 106, 502 Lucas supply curve, 8, 237, 242

Lucas, R. E., 23, 59, 67, 70, 79, 353, 457-459, 461, 475, 502, 503, 621

Lucas-Uzawa model, see Models,

Lucas-Uzawa, 456

Macroeconomic complementarity, 384 Maddock, R., 79

Malinvaud, E., 106, 124

Mankiw, N. G., vi, 25, 27, 151, 356, 364, 367, 369, 402, 417, 418, 506, 529, 571, 608, 652, 657

Manning, A., 212

Manuelli, R. E., 353, 475, 650 Mao, C. S., 487

Marginal cost of public funds (MCPF), 255, 374

and the multiplier, 376 in menu cost model, 391

Marini, G., 557, 583 Market for information, 67 Markup, 365, 463 Marquardt, M., 618 Marschak, J., 79

Marshall-Lerner condition, 264, 278 Matching model, 526

expected duration of unemployment, 215

743