Fabio-Cesare Bagliano and Giuseppe Bertola
Oxford University Press, 2007.
Inside the study guides below you will find additional mathematical derivations, further exercises, MATLAB programs, and web links.
About the textbook:
"Models for Dynamic Microeconomics" provides the advanced student with key methodological tools for the dynamic analysis of a core selection of macroeconomic phenomena, including consumption and investment choices, employment, and economic growth. The technical treatment of these tools will enable the student to handle current journal literature, while not assuming any particular familiarity with advanced analytical tools or mathematical notions.
Discrete-time optimization under uncertainty, introduced in Chapter 1, is motivated and discussed by applications to consumption theory, Chapter 2 focuses on continuous-time optimization techniques, and discusses the relevant insights in the context of partial-equilibrium investment models. Chapter 3 revisits many of the previous chapters' formal derivations with applications to dynamic labour demand, in comparison to optimal investment models, and characterizes labor market equilibrium when individual firms' labor demand is subject to adjustment costs.
Chapter 4 proposes broader applications of methods introduced in the previous chapters and studies continuous-time equilibrium dynamics of representative agent economies, featuring both consumption and investment choices, with applications to long-run growth frameworks of analysis. Chapter 5 illustrates the role of decentralized trading in determining aggregate equilibria, and characterizes aggregate labor market dynamics in the presence of frictional unemployment.
Study Guide Chapter 1 as pdf.
Study Guide Chapter 2 as pdf.
Study Guide Chapter 3 as pdf.
Study Guide Chapter 4 as pdf.
Study Guide Chapter 5 as pdf.
