Behavioural macroeconomics : theory and policy /

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Bibliographic Details
Author / Creator:Grauwe, Paul de, author.
Edition:First edition.
Imprint:Oxford ; New York, NY : Oxford University Press, 2019.
Description:xi, 260 pages : illustrations ; 26 cm
Language:English
Subject:Economics -- Psychological aspects.
Macroeconomics -- Psychological aspects.
Macroeconomics -- Methodology.
Macroeconomics -- Methodology.
Verhaltenssteuerung
Wirtschaftliches Verhalten
Makroökonomie
Format: Print Book
URL for this record:http://pi.lib.uchicago.edu/1001/cat/bib/11986463
Hidden Bibliographic Details
Other authors / contributors:Ji, Yuemei, author.
ISBN:019883232X
9780198832324
9780192568366
Notes:Includes bibliographical references and index.
Summary:Modern macroeconomics has been based on the paradigm of the rational individual capable of understanding the complexity of the world. This has created a very shallow theory of the business cycle in which nothing happens in the macroeconomy unless shocks occur from outside. Behavioural Macroeconomics: Theory and Policy uses a different paradigm. It assumes that individual agents experience cognitive limitations preventing them from having rational expectations. Instead these individuals use simple rules of behaviour. 0Behavioural Macroeconomics introduces rationality by allowing individuals to learn from their mistakes and to switch to the rules that perform better. It introduces the idea of endogenously generated "animals spirits" that drive the business cycle and are in turn influenced by it, and applies this model to shed new light on a number of important issues. It analyses the role of fiscal policy in stabilizing the economy while maintaining debt sustainability; expands the model to include a banking sector and show how banks amplify the booms and busts; and explains how animal spirits help to synchronize the business cycles across countries. 0The model set out in Behavioural Macroeconomics leads to very different policy implications from the mainstream macroeconomic model. It shows how policymakers have a responsibility to stabilize an otherwise unstable system.
Table of Contents:
  • List of Figures
  • Introduction
  • Part I. The Basics
  • 1. The Need for a New Approach in Macroeconomic Modelling
  • 2. The Basic Behavioural Model
  • 3. Inertia in Macroeconomic Variables
  • 4. Non-Normality in the Output Gap
  • 5. How Are Shocks Transmitted?
  • 6. Simple and Complex Rules
  • Part II. Applications
  • 7. Optimal Monetary Policies
  • 8. Inflation Targets and the Zero Lower Bound
  • 9. Monetary Policy and Structural Reforms
  • 10. Fiscal Policy, Output Stabilization, and Debt Sustainability
  • 11. Banks and Monetary Policy
  • 12. Synchronization of Business Cycles
  • References
  • Index