Estimating how the Macroeconomy Works or The Making of Urban Europe 1000 1994

Estimating How the Macroeconomy Works

Author: Ray Fair

Macroeconomics tries to describe and explain the economywide movement of prices, output, and unemployment. The field has been sharply divided among various schools, including Keynesian, monetarist, new classical, and others. It has also been split between theorists and empiricists. Ray Fair is a resolute empiricist, developing and refining methods for testing theories and models. The field cannot advance without the discipline of testing how well the models approximate the data. Using a multicountry econometric model, he examines several important questions, including what causes inflation, how monetary authorities behave and what are their stabilization limits, how large is the wealth effect on aggregate consumption, whether European monetary policy has been too restrictive, and how large are the stabilization costs to Europe of adopting the euro. He finds, among other things, little evidence for the rational expectations hypothesis and for the so-called non-accelerating inflation rate of unemployment (NAIRU) hypothesis. He also shows that the U.S. economy in the last half of the 1990s was not a "new age" economy.

Table of Contents:

1	Introduction	1
2	The MC model	16
3	Interest rate effects	61
4	Testing the NAIRU model	67
5	U.S. wealth effects	80
6	Testing for a new economy in the 1990s	85
7	A "modern" view of macroeconomics	101
8	Estimated European inflation costs	108
9	Stochastic simulation and bootstrapping	114
10	Certainty equivalence	130
11	Evaluating policy rules	134
12	EMU stabilization costs	147
13	RE models	154
14	Model comparisons	163
15	Conclusion	173
App. A	The US model	179
App. B	The ROW model	239

New interesting textbook: We Carry Each Other or Ice Cream in the Cupboard

The Making of Urban Europe, 1000-1994

Author: Paul M Hohenberg

Europe became a land of cities during the last millennium. The story told in this book begins with North Sea and Mediterranean traders sailing away from Dorestad and Amalfi, and with warrior kings building castles to fortify their conquests. It tells of the dynamism of textile towns in Flanders and Ireland. While London and Hamburg flourished by reaching out to the world and once vibrant Spanish cities slid into somnlence, a Russian urban network slowly grew to rival that of the West. Later as the tide of industrialization swept over Europe, the most intense urban striving and then settled back into the merchant cities and baroque capitals of an earlier era.

By tracing the large-scale precesses of social, economic, and political change within cities, as well as the evolving relationships between town and country and between city and city, the authors present an original synthsis of European urbanization within a global context. They divide their study into three time periods, making the early modern era much more than a mere transition from preindustrial to industrial economies. Through both general analyzes and incisive case studies, Hohenberg and Lees show how cities originated and what conditioned their early development and later growth. How did urban activity respond to demographic and techological changes? Did the social consequences of urban life begin degradation or inspire integration and cultural renewal? New analytical tools suggested by a systems view of urban relations yield a vivid dual picture of cities both as elements in a regional and national heirarchy of central places and also as junctions in a transnational network for the exchange of goods,information, and influence.

A lucid text is supplemented by numerous maps, illustrations, figures, and tables, and by substantial bibliography. Both a general and a scholarly audience will find this book engrossing reading.