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In economics, comparative statics is the comparison of two different economic outcomes, before and after a change in some underlying exogenous parameter. [1] As a type of static analysis it compares two different equilibrium states, after the process of adjustment (if any). It does not study the motion towards equilibrium, nor the process of ...
Static analysis, static projection, or static scoring is a simplified analysis wherein the effect of an immediate change to a system is calculated without regard to the longer-term response of the system to that change. If the short-term effect is then extrapolated to the long term, such extrapolation is inappropriate.
In most simple microeconomic stories of supply and demand a static equilibrium is observed in a market; however, economic equilibrium can be also dynamic. Equilibrium may also be economy-wide or general, as opposed to the partial equilibrium of a single market. Equilibrium can change if there is a change in demand or supply conditions.
Recursive dynamic models where a single period is solved for, comparative steady-state analysis, is a special case of recursive dynamic modeling over what can be multiple periods. Express CGE Models in Matrix Form: the von Neumann General Equilibrium Model and the Structural Equilibrium Model
Dynamic stochastic general equilibrium modeling (abbreviated as DSGE, or DGE, or sometimes SDGE) is a macroeconomic method which is often employed by monetary and fiscal authorities for policy analysis, explaining historical time-series data, as well as future forecasting purposes. [1]
A macroeconomic model is an analytical tool designed to describe the operation of the problems of economy of a country or a region. These models are usually designed to examine the comparative statics and dynamics of aggregate quantities such as the total amount of goods and services produced, total income earned, the level of employment of productive resources, and the level of prices.
The dynamic analysis is potentially more accurate than the alternative, if the econometric model correctly captures how households and firms will react to a policy changes. This has been attacked as assumption-driven compared to static scoring which makes simpler assumptions about behavior change due to the introduction of a new policy.
The term static efficiency belongs within neoclassical economics, which argues that explicit theoretical rationale of liberalisation is to achieve an efficient (static) allocation of resources. [1] In order to achieve this situation, there are three central assumptions within neoclassical economics that are indispensable for achieving an ...