Random Quote: One has to keep a particular openness of mind. Solving a problem is like going to a strange place, not to subdue it, but simply to spend time there, to preserve one’s openness, to wait for the signals, to wait for the strangeness to dissolve into sense. – Peter Whittle
Economic Dynamics: Theory and Computation (Second Edition)
This is the homepage for the second edition of my textbook Economic Dynamics: Theory and Computation, a graduate level introduction to deterministic and stochastic dynamics, dynamic programming and computational methods with economic applications.
Major changes include
- solutions to most exercises
- a new Jupyter code book with figures from the book and solutions to computational exercises
- most code within the text switched to pseudocode – pick your language of choice
- updated material on Markov dynamics
- updated references and citations
- many small fixes and improvements to wording and flow
List of Topics
- Dynamical systems
- Finite and continuous state Markov chains
- Stability and ergodicity
- Savings and consumption problems
- Markov control processes
Exercises and Solutions
A PDF of solutions to the majority of the theoretical exercises in the text is available here.
Solutions to most computational exercises can be found in the Jupyter code book mentioned above.
I try hard to suppress them but I’m sure one or two remain. If you spot one in either the text or solutions please get in touch with me via email@example.com.
Endorsements from the First Edition
“This book is a delightfully novel and thorough treatment of stochastic dynamic modeling. It builds on well known results as well as synthesizing the latest developments. Readers will find the many pictures and graphics as well as computer code and examples incredibly helpful. The book is beautifully written by a rapidly rising young star and is a must read for any economist and other researchers who want to learn the tools of dynamic stochastic modeling and apply these tools in their own research.” - William A. Brock, Vilas Research Professor of Economics, The University of Wisconsin, Madison
“An invaluable monograph on stochastic dynamical systems that’s ideally suited as a supplement for graduate courses in computational general equilibrium, macroeconomics, and asset pricing. The emphasis on economic illustrations and computational codes makes this volume a rich source of tools for students, instructors, and practitioners of economic dynamics.” - Costas Azariadis, Mallinckrodt University Professor and Director, Center for Dynamic Economics, Washington University, St. Louis
“Graduate macroeconomics courses are becoming technically more sophisticated every year. Currently there are very few books available that introduce the necessary mathematical techniques to understand modern macroeconomics and that are comprehensible to the nonmathematician. John Stachurski’s book helps fill this void. It is easy to read–conversational in tone–and yet it does not shy away from difficult material. But the book is more than just an introduction to dynamics for the mathematically challenged graduate student. It will also be an invaluable aid to the researcher as a reference book on stochastic dynamics.” - Roger Farmer, Department of Economics, UCLA
“John Stachurski has written the book that convincingly links theoretical models of discrete time, nonlinear growth models, and the simulation and computation of the applications of these models. He makes these growth models accessible to researchers through the connection of theory and technique. Economic Dynamics covers foundational material useful for students and researchers. I highly recommend this book.” - Leonard J. Mirman, Department of Economics, University of Virginia