Macroeconomic Relaxation: Adjustment Processes of Hierarchical Economic Structures

Artikel

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.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Journal: Economics: The Open-Access, Open-Assessment E-Journal ; ISSN: 1864-6042 ; Volume: 3 ; Year: 2009 ; Issue: 2009-17 ; Pages: 1-21 ; Kiel: Kiel Institute for the World Economy (IfW)

Classification and Topics

• Classification: Wirtschaft ; Relation of Economics to Other Disciplines ; Multiple or Simultaneous Equation Models: Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models ; General Equilibrium and Disequilibrium: General ; Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity ; Labor Force and Employment, Size, and Structure
• Subject: Macroeconomic adjustment process ; microeconomic dynamics ; aggregation ; anelastic relaxation ; Okun's law ; time-correlation formalism ; Makroökonomik ; Zeitökonomik ; Dynamisches Gleichgewicht ; Mikroökonomische Fundierung ; Wirtschaftliche Anpassung ; Okun's Law ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Aoki, Masanao ; Hawkins, Raymond
• Event: Veröffentlichung
• (who): Kiel Institute for the World Economy (IfW)
• (where): Kiel
• (when): 2009

Further information

• DOI: doi:10.5018/economics-ejournal.ja.2009-17
• Handle: http://hdl.handle.net/10419/27537
• Last update: 10.03.2025, 11:43 AM CET