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Macroeconomics is a branch of economics dealing with the aggregate economy as a whole, rather than individual markets.

1 vote
0 answers
230 views

Log-linearization of an intertemporal budget constraint

I'm trying to recreate the paper "Learning about Monetary Policy Rules when Long-Horizon Expectations Matter" by Preston. At one point he says that he log linearizes the intertemporal budget constrain …
bdvse's user avatar
  • 69
2 votes
1 answer
366 views

Why do many papers not write the actual utility function?

Why do many papers write the intertemporal maximisation problem for the household as \begin{equation}E_{0} \sum_{t=0}^{\infty} \beta^{t} U\left(C_{t}, N_{t}\right)\end{equation} and then do not write …
bdvse's user avatar
  • 69
0 votes

What are the determinants of the natural rate of interest and how market rate converges to it?

The natural interest rate is theoretical, so it can only be estimated. With regard to the drivers of interest rates, Kaplan (head of the Dallas Fed) explains: The neutral rate can be measured for dif …
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