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Greenwood–Hercowitz–Huffman Preferences
Greenwood–Hercowitz–Huffman preferences are a particular functional form of utility developed by Jeremy Greenwood, Zvi Hercowitz, and Gregory Huffman, in their 1988 paper ''Investment, Capacity Utilization, and the Real Business Cycle''.An archive for the original research is here: http://hdl.handle.net/1802/2688 It describes the macroeconomic impact of technological changes that affect the productivity of new capital goods. The paper also introduced the notions of investment-specific technological progress and capacity utilization into modern macroeconomics. GHH preferences have Gorman form. Often macroeconomic models assume that agents' utility is additively separable in consumption and labor. I.e., frequently the period utility function is something like :u(c,l) = \frac- \psi \frac where c is consumption and l is labor (e.g., hours worked). Note that this is separable in that the utility (loss) from working does not directly affect the utility (gain or loss) from cons ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Utility
As a topic of economics, utility is used to model worth or value. Its usage has evolved significantly over time. The term was introduced initially as a measure of pleasure or happiness as part of the theory of utilitarianism by moral philosophers such as Jeremy Bentham and John Stuart Mill. The term has been adapted and reapplied within neoclassical economics, which dominates modern economic theory, as a utility function that represents a single consumer's preference ordering over a choice set but is not comparable across consumers. This concept of utility is personal and based on choice rather than on pleasure received, and so is specified more rigorously than the original concept but makes it less useful (and controversial) for ethical decisions. Utility function Consider a set of alternatives among which a person can make a preference ordering. The utility obtained from these alternatives is an unknown function of the utilities obtained from each alternative, not the sum of ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Jeremy Greenwood (economist)
Jeremy John Denis Greenwood CBE The Most Excellent Order of the British Empire is a British order of chivalry, rewarding contributions to the arts and sciences, work with charitable and welfare organisations, and public service outside the civil service. It was established o ... (born 7 September 1942) is a British ornithology, ornithologist and was Director of the British Trust for Ornithology (BTO) from 1988 until he retired in September 2007. Greenwood was educated at Royal Grammar School Worcester and St Catherine's College, Oxford. Prior to working at the BTO, he spent 20 years as a lecturer in biological sciences at the University of Dundee. He is also president of the European Ornithologists Union. He is also an honorary Professor at the University of Birmingham's Centre for Ornithology. He was responsible for publishing the two largest surveys on British bird populations. Since 2000, he has been a trustee of The British Birds Charitable Trust, which publishes ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Zvi Hercowitz
Zvi Hercowitz (born December 21, 1945 in Rosario, Argentina) is professor emeritus at Tel Aviv University's School of Economics and has been a member of the montetary committee of the Bank of Israel since 2017. He emigrated to Israel in 1969 and began his academic career at Tel Aviv University in 1980. He published extensively throughout his career, with notable works includingMoney and the Dispersion of Relative Prices", Journal of Political Economy, April 1981; "Output Growth, the Real Wage, and Employment Fluctuations" with Michael Sampson, American Economic Review, December 1991; and "Long-Run Implications of Investment-Specific Technological Progress" with Jeremy Greenwood and Per Krusell, American Economic Review, June 1997. He received the bachelor's degree in economics in 1973 and the master of arts in economics in 1975, both from the Hebrew University in Jerusalem. In 1980 he received his PhD in economics from the University of Rochester with his dissertation supervised ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Macroeconomics
Macroeconomics (from the Greek prefix ''makro-'' meaning "large" + ''economics'') is a branch of economics dealing with performance, structure, behavior, and decision-making of an economy as a whole. For example, using interest rates, taxes, and government spending to regulate an economy's growth and stability. This includes regional, national, and global economies. According to a 2018 assessment by economists Emi Nakamura and Jón Steinsson, economic "evidence regarding the consequences of different macroeconomic policies is still highly imperfect and open to serious criticism." Macroeconomists study topics such as Gross domestic product, GDP (Gross Domestic Product), unemployment (including Unemployment#Measurement, unemployment rates), national income, price index, price indices, output (economics), output, Consumption (economics), consumption, inflation, saving, investment (macroeconomics), investment, Energy economics, energy, international trade, and international finance. ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Investment-specific Technological Progress
Investment-specific technological progress refers to progress that requires investment in new equipment and structures embodying the latest technology in order to realize its benefits. To model the influence of technological change upon production the influence of a technological change upon the specific inputs (i.e. labor and capital) of a production model is assessed in terms of the resulting effect upon the final good of the model (i.e. goods and services). To realize the benefits of such technological change for production a firm must invest to attain the new technology as a component of production. For example, the advent of the microchip (an important technological improvement in computers) will affect the production of Ford cars only if Ford Motor Co.'s assembly plants invest in computers with microchips (instead of computers with punched cards) and use them in the production of a product, i.e. Mustangs. Investment-specific technological progress requires investing in new pro ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Capacity Utilization
Capacity utilization or capacity utilisation is the extent to which a firm or nation employs its installed productive capacity. It is the relationship between output that ''is'' produced with the installed equipment, and the potential output which ''could'' be produced with it, if capacity was fully used. The Formula is the actual output per period all over full capacity per period expressed as a percentage. Engineering and economic measures One of the most used definitions of the "capacity utilization rate" is the ratio of actual output to the potential output. But potential output can be defined in at least two different ways. Engineering definition One is the "engineering" or "technical" definition, according to which potential output represents the maximum amount of output that can be produced in the short run with the existing stock of capital. Thus, a standard definition of capacity utilization is the (weighted) average of the ratios between the actual output of firms and t ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Gorman Form
Gorman polar form is a functional form for indirect utility functions in economics. Motivation Standard consumer theory is developed for a single consumer. The consumer has a utility function, from which his demand curves can be calculated. Then, it is possible to predict the behavior of the consumer in certain conditions, price or income changes. But in reality, there are many different consumers, each with his own utility function and demand curve. How can we use consumer theory to predict the behavior of an entire society? One option is to represent an entire society as a single "mega consumer", which has an aggregate utility function and aggregate demand curve. But in what cases is it indeed possible to represent an entire society as a single consumer? Formally: consider an economy with n consumers, each of whom has a demand function that depends on his income m^i and the price system: :x^i(p,m^i) The aggregate demand of society is, in general, a function of the price system ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Marginal Rate Of Substitution
In economics, the marginal rate of substitution (MRS) is the rate at which a consumer can give up some amount of one good in exchange for another good while maintaining the same level of utility. At equilibrium consumption levels (assuming no externalities), marginal rates of substitution are identical. The marginal rate of substitution is one of the three factors from marginal productivity, the others being marginal rates of transformation and marginal productivity of a factor. As the slope of indifference curve Under the standard assumption of neoclassical economics that goods and services are continuously divisible, the marginal rates of substitution will be the same regardless of the direction of exchange, and will correspond to the slope of an indifference curve (more precisely, to the slope multiplied by −1) passing through the consumption bundle in question, at that point: mathematically, it is the implicit derivative. MRS of X for Y is the amount of Y which a consumer ca ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Wealth Effect
The wealth effect is the change in spending that accompanies a change in perceived wealth. Usually the wealth effect is positive: spending changes in the same direction as perceived wealth. Effect on individuals Changes in a consumer's wealth cause changes in the amounts and distribution of his or her consumption. People typically spend more overall when one of two things is true: when people ''actually are'' richer, objectively, or when people ''perceive themselves'' to be richer—for example, the assessed value of their home increases, or a stock they own goes up in price. Demand for some goods (called inferior goods) decreases with increasing wealth. For example, consider consumption of cheap fast food versus steak. As someone becomes wealthier, their demand for cheap fast food is likely to decrease, and their demand for more expensive steak may increase. Consumption may be tied to relative wealth. Particularly when supply is highly inelastic, or when the seller is a monopo ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Balanced-growth Equilibrium
In macroeconomics, the balanced-growth path of a dynamic model is a trajectory such that all variables grow at a constant rate. In the standard exogenous growth model, balanced growth is a basic assumption, while other variables like the capital stock, real GDP, and output per worker are growing. Developing economies may adopt a strategy of unbalanced growth to rectify previous investment decisions, as put forward by economist Albert O. Hirschman. In microbiology, the state of balanced-growth means "every extensive property of the growing system increases by the same factor over a time interval". It is ideal for performing experiments because all bacteria are at about the same state (as opposed to stationary phase, for example, where some cells are alive and others are dead). Machines like chemostats can be used to culture bacteria and keep them in a state of balanced-growth for long-term experiments. Balance Growth refers to a specific type of economic growth that is sustainab ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Jaimovich–Rebelo Preferences
Jaimovich-Rebelo preferences refer to a utility function that allows to parameterize the strength of short-run wealth effects on the labor supply, originally developed by Nir Jaimovich and Sergio Rebelo in their 2009 article ''Can News about the Future Drive the Business Cycle?'' Let C_t denote consumption and let N_ denote hours worked at period t. The instantaneous utility has the form u\left( \right) = \frac, where X_ = C_^X_^. It is assumed that \theta>1, \psi>0, and \sigma>0. The agents in the model economy maximize their lifetime utility, U, defined over sequences of consumption and hours worked, U = E_ \sum_^ \beta^u\left( \right), where E_ denotes the expectation conditional on the information available at time zero, and the agents internalize the dynamics of X_t in their maximization problem. Relationship to other common macroeconomic preference types Jaimovich-Rebelo preferences nest the King-Plosser-Rebelo preferences, KPR preferences and the GHH prefere ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
King–Plosser–Rebelo Preferences
In economics, King–Plosser–Rebelo preferences are a particular functional form of utility that is used in many macroeconomic models and dynamic stochastic general equilibrium models. Having originally been proposed in an article that appeared in the ''Journal of Monetary Economics'' in 1988, the corresponding technical appendix detailing their derivation has only been published in 2002. Denote consumption with C, leisure with L and the absolute value of the inverse of the intertemporal elasticity of substitution in consumption with \sigma _c . Strict concave function, concavity of the utility function implies \sigma _c > 0. For 0 < \sigma _c < 1 or the utility function has the multiplicatively separable form where is increasing and concave if or decreasing and convex if . Further restri ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
