|
|
|
|
||||
|
||||
Macroeconomic Relaxation: Adjustment Processes of Hierarchical Economic StructuresRaymond J. HawkinsUniversity of Arizona - College of Optical Sciences Masanao AokiUniversity of California, Los Angeles (UCLA) - Department of Economics 2009 Economics: The Open-Access, Open-Assessment E-Journal, Vol. 3, 2009-17 Abstract: We show how time-dependent macroeconomic response follows from microeconomic dynamics using linear response theory and a time-correlation formalism. This theory provides a straightforward approach to time-dependent macroeconomic model construction that preserves the heterogeneity and complex dynamics of microeconomic agents. We illustrate this approach by examining the relationship between output and demand as mediated by changes in unemployment, or Okun's law. We also demonstrate that time dependence implies overshooting and how this formalism leads to a natural definition of economic friction. --
Number of Pages in PDF File: 22 Keywords: Macroeconomic adjustment process, microeconomic dynamics, aggregation, anelastic relaxation, Okun's law, time-correlation formalism JEL Classification: A12, C31, D50, E24, J21 Accepted Paper SeriesDate posted: December 18, 2010 ; Last revised: May 1, 2011Suggested CitationContact Information
|
|
||||||||||||||||
© 2013 Social Science Electronic Publishing, Inc. All Rights Reserved.
FAQ
Terms of Use
Privacy Policy
Copyright
This page was processed by apollo8 in 0.610 seconds
