Chapter 1: The Solow Growth Model

1.1 Some Basic Facts about Economic Growth

1.2 Assumptions

1.3 The Dynamics of the Model

1.4 The Impact of a Change in the Saving Rate

1.5 Quantitative Implications

1.6 The Solow Model and the Central Questions of Growth Theory

1.7 Empirical Applications

1.8 The Environment and Economic Growth

Chapter 2: Infinite-Horizon and Overlapping-Generations Models

Part A THE RAMSEY CASS KOOPMANS MODEL

2.1 Assumptions

2.2 The Behavior of Households and Firms

2.3 The Dynamics of the Economy

2.4 Welfare

2.5 The Balanced Growth Path

2.6 The Effects of a Fall in the Discount Rate

2.7 The Effects of Government Purchases

Part B THE DIAMOND MODEL

2.8 Assumptions

2.9 Household Behavior

2.10 The Dynamics of the Economy

2.11 The Possibility of Dynamic Inefficiency

2.12 Government in the Diamond Model

Chapter 3: Endogenous Growth

3.1 Framework and Assumptions

3.2 The Model without Capital

3.3 The General Case

3.4 The Nature of Knowledge and the Determinants of the Allocation of Resources to R&D

3.5 The Romer Model

3.6 Empirical Application: Time-Series Tests of Endogenous Growth Models

3.7 Empirical Application: Population Growth and Technological Change since 1 Million B.C.

3.8 Models of Knowledge Accumulation and the Central Questions of Growth Theory

Chapter 4: Cross-Country Income Differences 

4.1 Extending the Solow Model to Include Human Capital

4.2 Empirical Application: Accounting for Cross-Country Income Differences

4.3 Social Infrastructure

4.4 Empirical Application: Social Infrastructure and Cross-Country Income Differences

4.5 Beyond Social Infrastructure

4.6 Differences in Growth Rates 

Chapter 5: Real-Business-Cycle Theory

5.1 Introduction: An Overview of Economic Fluctuations

5.2 An Overview of Business-Cycle Research

5.3 A Baseline Real-Business-Cycle Model

5.4 Household Behavior

5.5 A Special Case of the Model

5.6 Solving the Model in the General Case

5.7 Implications

5.8 Empirical Application: Calibrating a Real-Business-Cycle Model

5.9 Empirical Application: Money and Output

5.10 Assessing the Baseline Real-Business-Cycle Model 

Chapter 6: Nominal Rigidity 

Part A EXOGENOUS NOMINAL RIGIDITY

6.1 A Baseline Case: Fixed Prices

6.2 Price Rigidity, Wage Rigidity, and Departures from Perfect Competition in the Goods and Labor Markets

6.3 Empirical Application: The Cyclical Behavior of the Real Wage

6.4 Toward a Usable Model with Exogenous Nominal Rigidity 

Part B MICROECONOMIC FOUNDATIONS OF INCOMPLETE NOMINAL ADJUSTMENT

6.5 A Model of Imperfect Competition and Price-Setting

6.6 Are Small Frictions Enough?

6.7 Real Rigidity

6.8 Coordination-Failure Models and Real Non-Walrasian Theories

6.9 The Lucas Imperfect-Information Model 

Chapter 7: Dynamic Stochastic General-Equilibrium Models of Fluctuations 

7.1 Building Blocks of Dynamic New Keynesian Models

7.2 Predetermined Prices: The Fischer Model

7.3 Fixed Prices: The Taylor Model

7.4 The Calvo Model and the New Keynesian Phillips Curve

7.5 State-Dependent Pricing

7.6 Empirical Applications

7.7 Models of Staggered Price Adjustment with Inflation Inertia

7.8 The Canonical New Keynesian Model

7.9 The Forward Guidance Puzzle

7.10 Other Elements of Modern New Keynesian DSGE Models of Fluctuations 

Chapter 8: Consumption 

8.1 Consumption under Certainty: The Permanent-Income Hypothesis

8.2 Consumption under Uncertainty: The Random-Walk Hypothesis

8.3 Empirical Application: Two Tests of the Random-Walk Hypothesis

8.4 The Interest Rate and Saving

8.5 Consumption and Risky Assets

8.6 Beyond the Permanent-Income Hypothesis

8.7 A Dynamic-Programming Analysis of Precautionary Saving 

Chapter 9: Investment 

9.1 Investment and the Cost of Capital

9.2 A Model of Investment with Adjustment Costs

9.3 Tobin’s q

9.4 Analyzing the Model

9.5 Implications

9.6 Empirical Application: q and Investment

9.7 The Effects of Uncertainty

9.8 Kinked and Fixed Adjustment Costs 

Chapter 10: Financial Markets and Financial Crises 

10.1 A Model of Perfect Financial Markets

10.2 Agency Costs and the Financial Accelerator

10.3 Empirical Application: Cash Flow and Investment

10.4 Mispricing and Excess Volatility

10.5 Empirical Application: Evidence on Excess Volatility

10.6 The Diamond Dybvig Model

10.7 Contagion and Financial Crises

10.8 Empirical Application: Microeconomic Evidence on the Macroeconomic Effects of Financial Crises 

Chapter 11: Unemployment 

11.1 A Generic Efficiency-Wage Model

11.2 The Shapiro-Stiglitz Model

11.3 Contracting Models

11.4 Search and Matching Models

11.5 Implications

11.6 Empirical Applications 

Chapter 12: Monetary Policy

12.1 Inflation, Money Growth, and Interest Rates

12.2 Monetary Policy and the Term Structure of Interest Rates

12.3 The Microeconomic Foundations of Stabilization Policy

12.4 Optimal Monetary Policy in a Simple Backward-Looking Model

12.5 Optimal Monetary Policy in a Simple Forward-Looking Model

12.6 Some Additional Issues Concerning Interest-Rate Rules

12.7 The Zero Lower Bound on the Nominal Interest Rate

12.8 The Dynamic Inconsistency of Low-Inflation Monetary Policy

12.9 Empirical Applications

12.10 Seignorage and Inflation 

Chapter 13: Budget Deficits and Fiscal Policy 

13.1 The Government Budget Constraint

13.2 Ricardian Equivalence

13.3 Tax-Smoothing

13.4 Political-Economy Theories of Budget Deficits

13.5 Strategic Debt Accumulation

13.6 Delayed Stabilization

13.7 Empirical Application: Politics and Deficits in Industrialized Countries

13.8 The Costs of Deficits

13.9 A Model of Sovereign Debt Crises