These notes are concerned with one answer to a fundamental question in macroeconomics: What causes the recurrent ups and downs we call the business cycle? For years, based largely on the work of Friedman-Schwartz (A Monetary History of the United States), the emphasis in macroeconomics was on monetary theories of economic fluctuations. The Great Depression in the United States was explained by ...

The digitalization of the Islamic economy can penetrate various aspects economy, both microeconomics and macroeconomics. Right now, role digital is extraordinary; almost all economies use information communication technology or digitization, in packaging products marketing products, making it easier faster distribution used to make economic growth without limits with support technology. Informa...

The paper extends Woodford’s [Optimizing models with nominal rigidities, Chapter 3 of Interest and prices: foundations of a theory of monetary policy, Princeton University, 2000; unpublished manuscript] analysis of the closed economy Phillips curve to an open economy with both commodity trade and capital mobility. We show that consumption smoothing, which comes with the opening of the capital m...

 Outward-oriented economies seem to grow faster than inward-looking ones. Does the literature on convergence have anything to say on this? In the dynamic Heckscher-Ohlin-Samuelson model, with factor-price equalization, there is no convergence of incomes. This is because with identical preferences and return to capital, irrespective of initial levels the growth rates of consumption are the same....

The purpose of this study is to answer the research question, “How do we conquer the growth limits of capitalism?” Based on existing studies on growth limits of capitalism by Marx and Schumpeter as well as the recent discussions of Drucker, Rifkin, and Piketty, the dynamic model of an open innovation economy system (OIES) is proposed as an answer to this research question. OIES consists of an o...

The analysis in earlier chapters was conducted within the context of a closed economy. Many useful insights into monetary phenomena can be obtained while still abstracting from the linkages that tie di¤erent economies together, but clearly many issues do require an open-economy framework if they are to be adequately addressed. New channels through which monetary factors can in‡uence the economy...

New Keynesian models with unemployment and incomplete markets are rapidly becoming a new workhorse model in macroeconomics. Such models typically require heavy computational methods which may obscure intuition and overlook equilibria. We present a tractable version which can be characterized analytically. Our results highlight that –due the interaction between incomplete markets, sticky prices ...

There have been very few direct applications of experimental techniques in macroeconomics for two main reasons. First, macroeconomics is about the in­ teraction between markets, and it is not easy to design an elegant treatment that gets at the essence of how a national economy functions. Second, there is a vestigial prejudice that favors econometrics over putatively unorthodox em­ pirical appr...

What I am going to describe for you is a revolution in macroeconomics, a transformation in methodology that has reshaped how we conduct our science. Prior to the transformation, macroeconomics was largely separate from the rest of economics. Indeed, some considered the study of macroeconomics fundamentally different and thought there was no hope of integrating macroeconomics with the rest of ec...

Roughly speaking there are two classes of general equilibrium models which explicitly recognize that the future is open ended: the ̄rst, simplest and most idealized, views agents as being in ̄nitely lived|they are all permanently on stage together. With a complete set of markets such an economy leads to an e±cient outcome: in essence all contingencies can be traded out at an initial date and the ...