Economics of Inaction
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A01=Nancy L. Stokey
Approximation
Author_Nancy L. Stokey
Bayesian
Bayesian inference
Bellman equation
Boundary value problem
Brownian motion
Category=KCA
Cost curve
Decision problem
Depreciation
Discounting
Disinvestment
Down payment
Economic equilibrium
Economics
eq_bestseller
eq_business-finance-law
eq_isMigrated=1
eq_isMigrated=2
eq_nobargain
eq_non-fiction
Expected value
Geometric Brownian motion
Inada conditions
Interest rate
Investment
Investment goods
Ito's lemma
Kolmogorov's inequality
Long run and short run
Loss function
Marginal cost
Marginal product
Marginal product of capital
Marginal value
Market value
Martingale (probability theory)
Mathematical optimization
Menu cost
Monetary policy
Money pump
Money supply
Net Loss
Operating expense
Opportunity cost
Option value (cost-benefit analysis)
Optional stopping theorem
Ornstein-Uhlenbeck process
Phillips curve
Preference (economics)
Price Change
Price index
Price level
Pricing
Probability
Purchase Price
Random variable
Real versus nominal value (economics)
Relative price
Relative value (economics)
Risk aversion
Scrap Value
State space
State variable
Stationary distribution
Stochastic
Stochastic calculus
Stochastic process
Supply (economics)
Terminal value (finance)
Theorem
Total cost
Transaction cost
Unit cost
Value of control
Variable cost
Wealth
Product details
- ISBN 9780691135052
- Weight: 567g
- Dimensions: 152 x 235mm
- Publication Date: 09 Nov 2008
- Publisher: Princeton University Press
- Publication City/Country: US
- Product Form: Hardback
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In economic situations where action entails a fixed cost, inaction is the norm. Action is taken infrequently, and adjustments are large when they occur. Interest in economic models that exhibit "lumpy" behavior of this kind has exploded in recent years, spurred by growing evidence that it is typical in many important economic decisions, including price setting, investment, hiring, durable goods purchases, and portfolio management. In The Economics of Inaction, leading economist Nancy Stokey shows how the tools of stochastic control can be applied to dynamic problems of decision making under uncertainty when fixed costs are present. Stokey provides a self-contained, rigorous, and clear treatment of two types of models, impulse and instantaneous control. She presents the relevant results about Brownian motion and other diffusion processes, develops methods for analyzing each type of problem, and discusses applications to price setting, investment, and durable goods purchases. This authoritative book will be essential reading for graduate students and researchers in macroeconomics.
Nancy L. Stokey is the Frederick Henry Prince Professor of Economics at the University of Chicago. She is the author, with Robert Lucas and Edward Prescott, of" Recursive Methods in Economic Dynamics".
