The Integration of Macro- and Microeconomic Relations in Dynamic Policy Models: The Case of Saving and Investment Behavior

24 Pages Posted: 15 Feb 2006

See all articles by A. Lans Bovenberg

A. Lans Bovenberg

Tilburg University - Center for Economic Research (CentER); Centre for Economic Policy Research (CEPR); CESifo (Center for Economic Studies and Ifo Institute)

Date Written: April 1990

Abstract

This paper examines how two types of fiscal policy models, namely, dynamic macroeconomic models and applied general equilibrium models, have integrated macro- and microeconomic relationships within a framework of intertemporal equilibrium. After emphasizing the potential advantages of integrating macro- and microeconomic relations, the study discusses the limitations of intertemporal equilibrium models--in particular the weaknesses of saving and investment theories incorporated in the models. It concludes that, despite recent important advances, policymakers need to exercise caution when they interpret results derived from these models.

JEL Classification: 021, 111, 213

Suggested Citation

Bovenberg, A. Lans, The Integration of Macro- and Microeconomic Relations in Dynamic Policy Models: The Case of Saving and Investment Behavior (April 1990). IMF Working Paper No. 90/34, Available at SSRN: https://ssrn.com/abstract=884725

A. Lans Bovenberg (Contact Author)

Tilburg University - Center for Economic Research (CentER) ( email )

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Netherlands
+31 13 466 2912 (Phone)
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Centre for Economic Policy Research (CEPR)

London
United Kingdom

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

HOME PAGE: http://www.CESifo.de

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