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Institut für Weltwirtschaft (IfW), Kiel >
Economics: The Open-Access, Open-Assessment E-Journal - Journal Articles >
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| Title: | | Macroeconomic Relaxation: Adjustment Processes of Hierarchical Economic Structures  |
| Authors: | | Aoki, Masanao Hawkins, Raymond |
| Issue Date: | | 2009 |
| Citation: | | [Journal:] Economics: The Open-Access, Open-Assessment E-Journal [Volume:] 3 [Issue:] 2009-17 [Pages:] 1-21 [DOI/URN:] doi:10.5018/economics-ejournal.ja.2009-17 |
| Series/Report no.: | | economics - The Open-Access, Open-Assessment E-Journal 2009-17 |
| Abstract: | | We show how time-dependent macroeconomic response follows from microeconomic dynamics using linear response theory and a time-correlation formalism. This theory provides a straightforward approach to time-dependent macroeconomic model construction that preserves the heterogeneity and complex dynamics of microeconomic agents. We illustrate this approach by examining the relationship between output and demand as mediated by changes in unemployment, or Okun's law. We also demonstrate that time dependence implies overshooting and how this formalism leads to a natural definition of economic friction. |
| Subjects: | | Macroeconomic adjustment process microeconomic dynamics aggregation anelastic relaxation Okun's law time-correlation formalism |
| JEL: | | A12 C31 D50 E24 J21 |
| Persistent Identifier of the first edition: | | doi:10.5018/economics-ejournal.ja.2009-17 |
| URL of the first edition: | | http://www.economics-ejournal.org/economics/journalarticles/2009-17 |
| Creative Commons License: | |  |
| Document Type: | | Article |
| Appears in Collections: | | Economics: The Open-Access, Open-Assessment E-Journal - Journal Articles
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