Classiflcation of Models
Market-clearing models are sometimes called Walrasian or Equilibrium models and are associated with classical economics.
Non-market-clearing models are sometimes called disequilibrium models and tend to be identifled with Keynesianism.
Common features of Macroeconomic models
Current models tend to derive decision rules from optimization problems, and make them compatible with much of microeconomics. (Models with Micro foundations)
Most macro models are of the general equilibrium variety, so that all interdependencies are taken into account.
More and more empirical evidence is used. To some extent, Macroeconomics is the empirical application of dynamic, stochastic, general equilibrium (DSGE) models.
What is a model?
A model consists of endogenous/explained/dependent variables and exogenous/forcing/ independent variables. These variables are related through a set of equations including:
What does it mean to solve a model?
Solving a model simply means solving this set of equations, flguring out how the endogenous variables depend on the exogenous variables.
1.static and deterministic model
Comparative statics
Sensitivity analysis
2. A nonlinear model
3.Dynamic Stochastic Model
Some Useful Tools
Log approximation
Growth rates
Discounting and power series
Jensen’s Inequality
Suppose that x is a random variable, with mean „ and variance σ2. Something else,
Lag operator
Covariance decomposition
參考資料：
Advanced Macroeconomics I, Luo Daqing