Introduction to Dynamic Economics

Author: Ronald Shaw
Publisher:
Publish Date: 2005-08-01
Features: "Currently, studying economic thought from a dynamic perspective has been widely accepted. Generally speaking, dynamic economics is relatively difficult, and only students with advanced mathematical training can engage with it. Ronald Shaw's Introduction to Dynamic Economics excels in explaining the fundamental concepts of dynamic economics and is suitable for a broad range of students using spreadsheets. The book primarily employs examples from different fields of economics to illustrate its arguments, using real-world examples as the research background. This approach not only provides students with vivid topics but also offers an innovative introduction to economic analysis." — Steven Turnovisky, University of Washington
"This book offers a timely introduction to dynamic economics at an introductory level through simple examples, clear diagrams, and computer experiments. It explains the main phenomena of discrete and continuous dynamic processes using examples from macroeconomics and microeconomics. By extending spreadsheet models to demonstrate theory, it presents a challenge to students, though the analytical tools are basic. However, the book is a pioneering effort to introduce nonlinear dynamics, such as strange attractors, bifurcation, and chaos, into advanced topics. Shaw's book encourages learning principles through experimentation. Together with the materials available for download from the website, this book and its resources provide undergraduate students and their instructors with a modern learning environment, making dynamic economics more engaging and lively." — Professor Cars Hommes, Department of Economics and Econometrics, University of Amsterdam; Nonlinear Dynamic Economics Research Center
This is a concise read. Its purpose is to enable readers to easily grasp the fundamental principles of dynamics used in current research in this field. It is worth noting that this goal is achieved through examples. Some of these examples are purely algebraic equations, while the majority are economic models: microeconomic models and macroeconomic models. Dynamic models are ubiquitous in macroeconomics—some are simple, while others are complex. However, this is not the case in microeconomics, except for the cobweb model, where most models are static. The book explains the dynamic models of supply and demand and the dynamic models of firms. The section on firms focuses only on advertising, diffusion models, and oligopoly dynamics. In the macroeconomic models, it discusses several traditional models: first, the Keynesian fixed-price model, and second, the IS-LM model. It also mentions the Dornbusch model under open economies, particularly highlighting how rational expectations are incorporated into the model structure and explaining the concept of saddle-point solutions in dynamic models. Additionally, it covers other important topics, such as inflation and unemployment, as well as the fiscal criteria of the Maastricht Treaty. Chapter 10 introduces the modern concepts of bifurcation and chaos.