Abstract
The representative agent model has been the workhorse of macroeconomics since the 1980s. This chapter deals with this model. Section 1.1 presents the basic model. Section 1.2 introduces a government into the economy. Section 1.3 addresses the model of a monetary economy with two monetary policy rules. The central bank controls the money stock under one policy rule and the nominal interest rate under the other policy rule. Section 1.4 introduces the consumption and leisure choice and assumes that the production function is subject to technology shocks. Combined, these two assumptions give rise to the real business cycle model.
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Barbosa, F.d.H. (2018). The Representative Agent Model. In: Macroeconomic Theory. Springer, Cham. https://doi.org/10.1007/978-3-319-92132-7_1
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DOI: https://doi.org/10.1007/978-3-319-92132-7_1
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Publisher Name: Springer, Cham
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Online ISBN: 978-3-319-92132-7
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