Recursive Macroeconomic Theory [Hardcover]

Lars Ljungqvist (Author), Thomas J. Sargent (Author)

Book Description

ISBN-10: 026212274X | ISBN-13: 978-0262122740 | Publication Date: August 27, 2004 | Edition: 2nd

Recursive methods offer a powerful approach for characterizing and solving complicated problems in dynamic macroeconomics. Recursive Macroeconomic Theory provides both an introduction to recursive methods and advanced material, mixing tools and sample applications. The second edition contains substantial revisions to about half the original material, and extensive additional coverage appears in seven chapters new to this edition. The updated and added material covers exciting new topics that further illustrate the power and pervasiveness of recursive methods.Significant improvements to original chapters include a better treatment of the existence of recursive equilibria, an enhanced account of the supermartingale convergence theorem, and an extended treatment of an optimal taxation problem in an economy in which there are incomplete markets. Completely new coverage in the second edition includes an introductory chapter, which gives an overview of the themes uniting the diverse topics treated throughout the book. Two new chapters offer a self-contained account of the optimal growth model and some of its basic applications in macroeconomics and public finance. Other new chapters cover such topics as how to formulate and compute Stackelberg or Ramsey plans in linear economies, sustainable risk-sharing equilibria without commitment, and the application of recursive contracts to topics in international trade. Most chapters conclude with exercises and the book includes two technical appendixes covering functional analysis and control and filtering.

Editorial Reviews

Review

"This revised edition is an excellent resource, both for those interested in state-of-the-art research in macroeconomics and for those anxious to learn the tools that are used to do it."--Wouter J. Denhaan, Professor of Economics, London Business School

" Recursive Macroeconomic Theory thoroughly works through a wide variety of applications of recursive methods to the analysis of central themes in macroeconomics. As Alexander the Great is said to have always kept a copy of the Iliad under his pillow, I think the modern macroeconomist would do well to keep a copy of this excellent work close at hand." Fernando Alvarez, Professor of Economics, University of Chicago

"*Recursive Macroeconomic Theory* thoroughly works through a wide variety of applications of recursive methods to the analysis of central themes in macroeconomics. As Alexander the Great is said to have always kept a copy of the Iliad under his pillow, I think the modern macroeconomist would do well to keep a copy of this excellent work close at hand."--Fernando Alvarez, Professor of Economics, University of Chicago

From the Inside Flap

"This revised edition is an excellent resource, both for those interested in state-of-the-art research in macroeconomics and for those anxious to learn the tools that are used to do it."
--Wouter J. Denhaan, Professor of Economics, London Business School

"*Recursive Macroeconomic Theory* thoroughly works through a wide variety of applications of recursive methods to the analysis of central themes in macroeconomics. As Alexander the Great is said to have always kept a copy of the Iliad under his pillow, I think the modern macroeconomist would do well to keep a copy of this excellent work close at hand."
--Fernando Alvarez, Professor of Economics, University of Chicago

"With this second edition, Ljungqvist and Sargent have significantly improved and updated what was already the best introduction to modern macroeconomics of the past ten years. Graduate students and researchers will want to keep this book near for its coverage of both the methods and substance of the field. They have set the standard for the next ten years."
--Andrew Atkeson, Department of Economics, University of California, Los Angeles

See all Editorial Reviews

Product Details

• Reading level: Ages 18 and up
  
• Hardcover: 1116 pages
• Publisher: The MIT Press; 2nd edition (August 27, 2004)
• Language: English
• ISBN-10: 026212274X
• ISBN-13: 978-0262122740
• Product Dimensions: 9.3 x 7.2 x 1.8 inches
• Shipping Weight: 3.8 pounds (View shipping rates and policies)
• Average Customer Review: 4.4 out of 5 stars  See all reviews (10 customer reviews)
• Amazon Best Sellers Rank: #79,578 in Books (See Top 100 in Books)

Customer Reviews

Most Helpful Customer Reviews

35 of 38 people found the following review helpful:

4.0 out of 5 stars Not the first book in Dynamic Macro, but excellent afterward, December 2, 2002

By 

"smattering" (BKK Thailand) - See all my reviews

This review is from: Recursive Macroeconomic Theory (Hardcover)

The first time i read the book, i'm sure this should not be the first text book for Dynamic Macroeconomics everyone should read. It's better to read somewhere else as an introduction to the idea of dynamic macroeconomics. Romer 'Advanced Macroeconomics' and Stokey, Lucas, Prescott 'Recursive Methods' are more appropriate to start. After gainning some similarity with Dynamic Methods, it would be much better to study models about macroeconomics presented in the book.

This book is the presentations of various models using Dynamic / Recursive Macroeconomics. It makes them easier and time-saving to study many kinds of model in a semester. It's GOOD & HELPFUL IN THIS SENSE. However, it might not be a good book for study in depth. You are better to study from the original papers for the same topics.

I think, this book is similar to Tirole 'Theory of Industrial Organization' in spirit, but different in content. They both show the simplified version of various models in the fields.

If you think you like this style, you would like to have it. But if you don't, it might be better just to skim (from the library) and read the original papers.

Hope this comment would be helpful for you to make a decision :)

22 of 25 people found the following review helpful:

5.0 out of 5 stars a review from a skeptical student, now a convert., March 7, 2002

By A Customer

This review is from: Recursive Macroeconomic Theory (Hardcover)

This text is perhaps the most accessible introduction to modern macroeconomics available. What I feel to be the greatest contributions of the text are the problems-- in each chapter, they start from the basics and build upon one another until you are formulating elaborate models that are the basis for much of the current discourse in the literature. The approaches used are so powerful and the questions tackled so varied that you cannot help believing that the recursive method is the future, not only for traditional issues in macroeconomics, but throughout the discipline. Hey, the book stands out so much, I decided to write a review!

18 of 26 people found the following review helpful:

3.0 out of 5 stars A book for Econometricians rather than Macroeconomists, October 29, 2004

By 

SamBK (United States) - See all my reviews

This review is from: Recursive Macroeconomic Theory (Hardcover)

The book is certainly written by distinguished people, but it seems to me that their focus in writting this book was more to exhibit mathematical methods to solve problems rather than discuss the problems themselves. Apparently the book is meant for training mathematical skills in dynamic programming, and prepare you for computer simulations of macroeconomic problems. But don't use it for understanding macroeconomics.

In general, the authors get into mathematical discussions that divert attention from the problem itself, and at the same time they don't explain why they are doing all these. Reading the book needs a lot of background knowledge and self-intuition. Apart from that some chapters are educational and fit for class work.

The first chapters cover mathematical basics about random process and Markov chains and estimation. They are the good chapters. The chapters on partial equilibrium, complete markets ad incomplete markets are also the ones that are noramlly used in class lectures. The book's coverage of consumption theory and economic growth is weak and insufficient. I would recommend Romer or Blanchard&Fisher book for that. The chapter on search and job matching is also simplistic and again not enough. In most of the chapters, technicality dominates concepts, so having a complementary textbook can be great help.

For one thing, the book has a lot of misprints and mistakes too, which seem to be fixed in the newer edition.