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Microfoundations in monetary union modeling.

Publication: International Advances in Economic Research
Publication Date: 01-NOV-08
Format: Online
Delivery: Immediate Online Access

Article Excerpt
A contemporaneous approach in macroeconomic modelling is based on micro-economic foundations. The aim to capture demand and supply responses to economic policies is achieved in two-tier exercise. In the first step a representative household or a firm is defined together with its utility function and a set of preferences. Then, by aggregating representative agents, one gets a framework for...

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