A Note on the Section Ⅲ of Lucas(1987)
- 주제(KDC) 320.000
- 발행기관 서강대학교 경제학연구원
- 발행년도 2002
- 총서유형 Journal
- 본문언어 영어
초록/요약
Models of Business Cycles by Robert E. Lucas, Jr. (Blackwell, Oxford, 1987) is first and foremost a persuasive argument for using a particular set of rules and techniques to model aggregative economic observations. Especially, in section Ⅲ, he deals with the issue of growth and cycles and concludes that business cycles are of minor consequence in utility terms in so far as their aggregative effects are concerned, but that alterations in trend rates are very important. In deriving this proposition, Lucas, however, inadvertently presented his growth calculations only for the logarithmic preferences. The purpose of this paper is to generalize his results by extending some calculations. The main finding is that the welfare costs of reduced growth become less spectacular when consumers are more risk-averse than assumed in Lucas's calculations, although basic pattern reported by Lucas remains unchanged.
more목차
Ⅰ. Introduction
Ⅱ. Welfare Costs of Reduced Growth and Economic Instability
Ⅲ. Some Extended Calculations
