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Type Book Chapter
Scope Discipline-based scholarship
Title Markov equilibria in macroeconomics
Organization Unit
Authors
  • Felix Kübler
  • Dirk Krüger
Editors
  • Steven N Durlauf
  • Lawrence E Blume
Item Subtype Original Work
Refereed No
Status Published in final form
Language
  • English
Booktitle The New Palgrave Dictionary of Economics (Vol. 5)
ISBN 978-0-333-78676-5
Place of Publication Basingstoke
Publisher Palgrave Macmillan
Page Range 339 - 342
Date 2008
Abstract Text We review the recent literature in macroeconomics that analyses Markov equilibria in dynamic general equilibrium model. After defining the Markov equilibrium concept we first summarize what is known about the existence and uniqueness of such equilibria in models where sequential equilibria can be obtained by solving a suitable social planner problem. We then discuss the existence problems of Markov equilibria in models where equivalence of equilibrium allocations and solutions to social planner problems cannot be established and review techniques the literature has developed to deal with the existence problem, as well as recent applications of these techniques in macroeconomics.
Digital Object Identifier 10.1057/9780230226203.1040
Other Identification Number merlin-id:570
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Keywords backward induction, business cycles, commitment, convexity, dynamic programming, enforcement frictions, Euler equations, existence of a Markov equilibrium, fixed-point theorems, functional equations, generalized Markov equilibria, informational frictions, Lagrange multipliers, Markov chains, Markov equilibria in macroeconomics, Markov processes, neoclassical growth theory, optimal taxation, overlapping generations models, policy functions, principle of optimality, Recursive Markov equilibria, recursive techniques, reputation, sequential equilibria, social planner problem, state spaces, transition functions
Additional Information This is a post-peer-review, pre-copyedit version of an article published in The New Palgrave Dictionary of Economics. The definitive publisher-authenticated version (Vol. 5, p. 339-342) is available online at dx.doi.org/10.1057/9780230226203.1040.