Macroeconomic Theory

The textbook presents a distinctive perspective on macroeconomic theory by integrating microeconomic foundations with a dynamic intertemporal general equilibrium model. It explores how expectations and stationary fiscal policies affect economic allocations, money supply, and overall economic dynamics, considering scenarios with and without noise. The text critically examines two major macroeconomic approaches: one emphasizing full price flexibility for market equilibrium and the other focusing on disequilibrium, where prices and wages adjust slowly in response to market signals.