International Macroeconomics and Finance: Theory and Empirical Methods Phần 1 pot

International Macroeconomics and

Finance: Theory and Empirical Methods

Nelson C. Mark

December 12, 2000

forthcoming, Blackwell Publishers

i

To Shirley, Laurie, and Lesli

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Preface

This book grew out of my lecture notes for a graduate course in in￾ternational macroeconomics and finance that I teach at the Ohio State

University. The book is targeted towards second year graduate stu￾dents in a Ph.D. program. The material is accessible to those who have

completed core courses in statistics, econometrics, and macroeconomic

theory typically taken in the first year of graduate study.

These days, there is a high level of interaction between empirical

and theoretical research. This book reflects this healthy development

by integrating both theoretical and empirical issues. The theory is in￾troduced by developing the canonical model in a topic area and then its

predictions are evaluated quantitatively. Both the calibration method

and standard econometric methods are covered. In many of the empir￾ical applications, I have updated the data sets from the original studies

and have re-done the calculations using the Gauss programming lan￾guage. The data and Gauss programs will be available for downloading

from my website: www.econ.ohio-state.edu/Mark.

There are several different ëcampsí in international macroeconomics

and finance. One of the major divisions is between the use of ad hoc

and optimizing models. The academic research frontier stresses the

theoretical rigor and internal consistency of fully articulated general

equilibrium models with optimizing agents. However, the ad hoc mod￾els that predate optimizing models are still used in policy analysis and

evidently still have something useful to say. The book strikes a middle

ground by providing coverage of both types of models.

Some of the other divisions in the field are flexible price versus sticky

price models, rationality versus irrationality, and calibration versus sta￾tistical inference. The book gives consideration to each of these ëmini

debates.í Each approach has its good points and its bad points. Al￾though many people feel firmly about the particular way that research

in the field should be done, I believe that beginning students should

see a balanced treatment of the different views.

Hereís a brief outline of what is to come. Chapter 1 derives some

basic relations and gives some institutional background on international

financial markets, national income and balance of payments accounts,

and central bank operations.