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Economics and Finance

Economics and Finance

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This manual includes solutions to the odd-numbered exercises in Economic Dynamics in Discrete Time. Some exercises are purely analytical, while others require numerical methods. Computer codes are provided for most problems. Many exercises ask the reader to apply the methods learned in a chapter to solve related problems, but some exercises ask the reader to complete missing steps in the proof of a theorem or in the solution of an example in the book.

This book offers a unified, comprehensive, and up-to-date treatment of analytical and numerical tools for solving dynamic economic problems. The focus is on introducing recursive methods—an important part of every economist’s set of tools—and readers will learn to apply recursive methods to a variety of dynamic economic problems. The book is notable for its combination of theoretical foundations and numerical methods. Each topic is first described in theoretical terms, with explicit definitions and rigorous proofs; numerical methods and computer codes to implement these methods follow.

This landmark graduate-level text combines depth and breadth of coverage with recent, cutting-edge work in all the major areas of modern labor economics. Its command of the literature and its coverage of the latest theoretical, methodological, and empirical developments make it also a valuable resource for practicing labor economists.

Basics and Extensions

Spreadsheets are used daily by millions of people for tasks that range from organizing a list of addresses to carrying out complex economic simulations. Spreadsheet programs are easy to learn and convenient to use because they have a clear visual model and a simple efficient underlying computational model. Yet although the basic spreadsheet model could be extended, improved, or otherwise experimented with in many ways, there is no coherently designed, reasonably efficient open source spreadsheet implementation that is a suitable platform for such experiments.

The Green Paradox and Beyond

Recent developments suggest that well-intended climate policies--including carbon taxes and subsidies for renewable energy—might not accomplish what policy makers intend. Hans-Werner Sinn has described a “green paradox,” arguing that these policies could hasten global warming by encouraging owners of fossil fuel reserves to increase their extraction rates for fear that their reserves will become worthless. In this volume, economists investigate the empirical and theoretical support for the green paradox.

Setting Limits on Healthcare

Most people would agree that the healthcare system in the United States is a mess. Healthcare accounts for a larger percentage of gross domestic product in the United States than in any other industrialized nation, but health outcomes do not reflect this enormous investment. In this book, Philip Rosoff offers a provocative proposal for providing quality healthcare to all Americans and controlling the out-of-control costs that threaten the economy.

Automatic Selection Methods in Econometrics

Economic models of empirical phenomena are developed for a variety of reasons, the most obvious of which is the numerical characterization of available evidence, in a suitably parsimonious form. Another is to test a theory, or evaluate it against the evidence; still another is to forecast future outcomes. Building such models involves a multitude of decisions, and the large number of features that need to be taken into account can overwhelm the researcher.

Breakthroughs in medical science, innovations in medical technologies, and improvements in clinical practices occur today at an increasingly rapid rate. Yet because of a fragmented healthcare delivery system, many Americans are unable to benefit from these developments. How can we design a system that can provide high-quality, affordable healthcare for everyone? In this book, William Rouse and Nicoleta Serban introduce concepts, principles, models, and methods for understanding, and improving, healthcare delivery.

Fiscal policy makers have faced an extraordinarily challenging environment over the last few years. At the outset of the global financial crisis, the International Monetary Fund (IMF) for the first time advocated a fiscal expansion across all countries able to afford it, a seeming departure from the long-held consensus among economists that monetary policy rather than fiscal policy was the appropriate response to fluctuations in economic activity. Since then, the IMF has emphasized that the speed of fiscal adjustment should be determined by the specific circumstances in each country.

Is Sustainable Growth Possible?

The global economy has become increasingly, perhaps chronically, unstable. Since 2008, we have heard about the housing bubble, subprime mortgages, banks “too big to fail,” financial regulation (or the lack of it), and the European debt crisis. Wall Street has discovered that it is more profitable to make money from other people’s money than by investing in the real economy, which has limited access to capital--resulting in slow growth and rising inequality.

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