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The overlapping generations (OLG) model is one of the dominating frameworks of analysis in the study of macroeconomic dynamics and economic growth.In contrast to the Ramsey–Cass–Koopmans neoclassical growth model in which individuals are infinitely-lived, in the OLG model individuals live a finite length of time, long enough to overlap with at least one period of another agent's life.
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.
In an economic model, an exogenous variable is one whose measure is determined outside the model and is imposed on the model, and an exogenous change is a change in an exogenous variable. [1]: p. 8 [2]: p. 202 [3]: p. 8 In contrast, an endogenous variable is a variable whose measure is determined by the model. An endogenous change is a change ...
The structural equilibrium model is a matrix-form computable general equilibrium model in new structural economics. [30] [31] This model is an extension of the John von Neumann's general equilibrium model (see Computable general equilibrium for details). Its computation can be performed using the R package GE.
Mathematical economics is the application of mathematical methods to represent theories and analyze problems in economics.Often, these applied methods are beyond simple geometry, and may include differential and integral calculus, difference and differential equations, matrix algebra, mathematical programming, or other computational methods.
The Economy does not dumb down economics; it uses maths readily, keeping students engaged through the topicality of the material. Quite early on, students have lessons in the weirdness in economics—from game theory to power dynamics within firms—that makes the subject fascinating and useful but are skimmed over in most introductory courses.
The size and nature of the model will change because of the above considerations while building the same. According to Pesaran and Smith the macroeconometric model must have three basic characteristics viz. relevance, adequacy and consistency. [2] Relevance means the model must be according to the requirements of the desired output.