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Post-Crisis Macrofinancial Modeling: Continuous Time Approaches

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The Handbook of Post Crisis Financial Modeling

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Abstract

Prior to the crisis the dominant paradigm in macroeconomic modeling was the micro-founded “New-Keynesian” DSGE model (described in many textbooks including the influential exposition of Woodford (2003)). In its most basic form this combines price-stickiness with forward looking decision making by both households and firms. This provides a tractable framework for capturing the response of output and inflation to both demand and supply shocks and explaining intuitively the transmission of monetary policy (with monetary policy characterized as a choice over rules for current and future interest rates).

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Authors
  1. Jukka Isohätälä
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  2. Nataliya Klimenko
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  3. Alistair Milne
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Editor information

Editors and Affiliations

  1. School of Management and Institute of Finance, University of Leicester, UK

    Emmanuel Haven (Professor) (Professor)

  2. College of Business, Law, Education and Social Science, Bangor University, UK

    Philip Molyneux (Dean) (Dean)

  3. University of St Andrews, UK

    John O. S. Wilson (Professor of Banking and Finance) (Professor of Banking and Finance)

  4. University of Manchester, UK

    Sergei Fedotov (Professor of Applied Mathematics) (Professor of Applied Mathematics)

  5. Hull University Business School, UK

    Meryem Duygun (Professor of Banking and Finance) (Professor of Banking and Finance)

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© 2016 Jukka Isohätälä, Nataliya Klimenko and Alistair Milne

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Isohätälä, J., Klimenko, N., Milne, A. (2016). Post-Crisis Macrofinancial Modeling: Continuous Time Approaches. In: Haven, E., Molyneux, P., Wilson, J.O.S., Fedotov, S., Duygun, M. (eds) The Handbook of Post Crisis Financial Modeling. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-137-49449-8_10

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