高宏观经济学课件(厦门大学,龚敏)Chapter.docVIP

Chapter 4 REAL-BUSINESS-CYCLE THEORY Introduction: Some Facts and Theories of Fluctuations A Baseline Real-Business-Cycle Model Empirical Applications Extension and Limitations Introduction: Some Facts and Theories of Fluctuations Some Facts about Economic Fluctuations Theories of Fluctuations A Baseline Real-Business-Cycle Model The model is a discrete-time variation of the Ramsey model of Chapter 2. The economy consists of a large number of identical, price-taking firms and a large number of identical, price-taking households. Households are infinitely lived. ? the production function Labor and capital are paid their marginal products. The real wage: The real interest rate: ? the utility function , , ? the behavior of the two driving variables, technology and government purchases the effects of the shocks: the random component of follows AR(1). , where the ’s are white-noise disturbances. If is positive, this means that the effects of a shock to technology disappear gradually over time. , where the ’s are white-noise disturbances that are uncorrelated with the . Household Behavior The two most important differences between this model and the Ramsey model are the inclusion of leisure in the utility function and the introduction of randomness in technology and government purchases. ?Intertemporal Substitution in Labor Supply( Consider the case where the household lives for one period and has no initial wealth, only one member. The Lagrangian is (4.15) Labor supply is independent of the wage. The income and substitution effects of a change in the wage offset each other. Consider the case where the household’s horizon is more than one period, e.g. for two periods. In addition, assume that there is no uncertainty about the interest rate or the second-period wage. The household’s lifetime budget constraint is The Lagrangian is The first-order conditions for l1 and l2 are needed to show the effect of the relative wage in the two perio