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Title:Macroeconomic Relaxation: Adjustment Processes of Hierarchical Economic Structures PDF Logo
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:http://creativecommons.org/licenses/by-nc/2.0/de/deed.en
Document Type:Article
Appears in Collections:Economics: The Open-Access, Open-Assessment E-Journal - Journal Articles

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