This text provides an introduction to the modern theory of economic dynamics, with emphasis on mathematical and computational techniques for modeling dynamic systems. Written to be both rigorous and engaging, the book shows how sound understanding of the underlying theory leads to effective algorithms for solving real world problems. The material makes extensive use of programming examples to illustrate ideas. These programs help bring to life the abstract concepts in the text. Background in computing and analysis is offered for readers without programming experience or upper-level mathematics. Topics covered in detail include nonlinear dynamic systems, finite-state Markov chains, stochastic dynamic programming, stochastic stability and computation of equilibria. The models are predominantly nonlinear, and the emphasis is on studying nonlinear systems in their original form, rather than by means of rudimentary approximation methods such as linearization. Much of the material is new to economics and improves on existing techniques. For graduate students and those already working in the field, Economic Dynamics will serve as an essential resource.
About the Author
John Stachurski is Professor of Economics at the Research School of Economics, Australian National University. He is a winner of the IJET Lionel McKenzie Prize, awarded to young authors who have made outstanding contributions to economic theory. His research is published in such leading journals as Econometrica, the Journal of Economic Theory and the Journal of Economic Dynamics and Control.
“This book is a delightfully novel and thorough treatment of stochastic dynamic modeling. It builds on the well-known results as well as synthesizing the latest developments. Readers will find the many pictures and graphics as well as computer code and examples incredibly helpful. The book is beautifully written by a rapidly rising young star and is a must read for any economist and other researchers who want to learn the tools of dynamic stochastic modeling and apply these tools in their own research.”
—William A. Brock, Vilas Research Professor of Economics, The University of Wisconsin, Madison
“Graduate macroeconomics courses are becoming technically more sophisticated every year. Currently, there are very few books available that introduce the necessary mathematical techniques to understand modern macroeconomics and that are comprehensible to the non mathematician. John Stachurski's book helps fill this void. It is easy to read—conversational in tone—and yet it does not shy away from difficult material. But the book is more than just an introduction to dynamics for the mathematically challenged graduate student. It will also be an invaluable aid to the researcher as a reference book on stochastic dynamics.”
—Roger Farmer, Department of Economics, UCLA
“An invaluable monograph on stochastic dynamical systems that's ideally suited as a supplement for graduate courses in computational general equilibrium, macroeconomics, and asset pricing. The emphasis on economic illustrations and computational codes makes this volume a rich source of tools for students, instructors, and practitioners of economic dynamics.”
—Costas Azariadis, Mallinckrodt University Professor and Director, Center for Dynamic Economics, Washington University, St. Louis
“John Stachurski has written the book that convincingly links theoretical models of discrete time, nonlinear growth models, and the simulation and computation of the applications of these models. He makes these growth models accessible to researchers through the connection of theory and technique. Economic Dynamics covers foundational material useful for students and researchers. I highly recommend this book.”
—Leonard J. Mirman, Department of Economics, University of Virginia