Aggregate Economic Choice

Book by Whitmore Harland W Jr

1. Conventional Macro Models and Aggregate Economic Choice.- An Overview of the Book.- 2. The Basic Structure.- Government Sector.- Household Sector.- Nonfinancial Business Sector.- Private Financial Sector.- Central Bank.- The Open-Economy Model.- 3. The Household Sector in the Simple Model.- Formal Model of the Household Sector.- Budget Constraints.- Present Utility Function.- First-Order Necessary Conditions.- Household Sector’s Demand and Supply Functions.- 4. The Nonfinancial Business Sector in the Simple Model.- The Anticipated Current Revenue Function.- Next Period’s Anticipated Revenue Function.- The Business Sector’s Optimizing Problem at Time t.- First-order Necessary Conditions.- Conditions for Liquidation.- Response Functions of the Business Sector as a Going Concern.- 5. National Product and the Dynamic Properties of the Simple Model.- Derivation of Walras’ Law in a Setting without Market-Clearing.- The Discrepancy between the Business Sector’s Desired and Actual Cash Balances.- National Income and Product.- Specification of the Complete Model.- Dynamic Properties of the Model.- Some Implications of the Model.- An Exogenous Increase in the Household Sector’s Initial Cash Balances.- An Exogenous Increase in the Business Sector’s Intiial Cash Balances.- An Increase in cth Accompanied by a Decrease in Cut+lhd.- An Incr ase in cth Accompanied by a Decrease in Snt+1hd.- An Increase in Cut+ld Accompanied by a Decrease in Snt+lhd.- The Conventional Approach to Introducing Government Activity.- Balanced-Budget Increase in ctg.- Money-Financed Increase in ctg.- Money-Financed Decrease in Taxes.- 6. Government Activity and Aggregate Economic Choice.- The Government Sector.- Government Demand Functions for Current Labor Services and Current Consumption Goods.- Government’s Demands for Workers and for Next Period’s Privately-Produced Commodities.- The Menu of Choices for Next Period’s Government Production and Taxes.- Summary of Government Activity.- Modifications of Household Sector Behavior.- First-Order Necessary Conditions.- The Household Sector’s Demand and Supply Functions.- Modifications of Business Sector Behavior.- National Product and Economic Fluctuations.- Walras’ Law in a Non-Walrasian Model.- National Income and Product.- Specification of the Reduced- and Final-Forms.- Some Implications of the Model.- 7. The Government Sector in the Expanded Model.- Formal Model of Government Activity.- The Government’s Demand Functions for Current Labor Services and Current Consumption Goods.- The Menu of Choices for Next Period’s Government Production and Taxes and the Government’s Demand Functions for Next Period.- 8. Household Sector Behavior in the Expanded Model.- Formal Model of Household Behavior.- First-Order Conditions.- Household Sector’s Decision Variables.- 9. The Nonfinancial Business Sector in the Expanded Model.- Formal Model of the Nonfinancial Business Sector.- Anticipated Current Sales Revenue.- Anticipated Future Sales Revenue.- Estimated Demand for Nonfinancial Business Sector Equity.- Maximizing the Nonfinancial Business Sector’s Present Value.- First-Order Necessary Conditions for a Maximum.- Response Functions of the Nonfinancial Business Sector.- 10. The Private Financial Sector.- Formal Model of the Private Financial Sector.- Next Period’s Anticipated Dividends.- Private Financial Sector’s Objective Function.- Implications for Private Financial Sector Behavior.- 11. The Central Bank.- Formal Model of Central Bank Behavior.- Answers to Criticisms of Profit-Maximization and a Reliance Upon Discounting.- Conclusion.- 12. The Complete Model of a Closed Economy.- Formal Specification of the Complete Model.- The Non-Walrasian Counterpart to Walras Law.- Actual Quantities Traded and End-of-Period Stocks.- National Income and Product.- Long-Run Properties.- Effects of a Technological Advance in Government-Goods Production.- A Technological Advance in the Nonfinancial Business Sector’s Production Function.- A Technological Advance in Next-Period’s Household Production Function.- 13. Model of a Large Open Economy.- The Government Sector.- The Household Sector.- The Nonfinancial Business Sector.- The Private Depository Institutions.- The Complete Model of a Large Open Economy.- Impacts of Changes in Selected Foreign Parameters upon the Domestic Economy.- 14. Conclusion.