Household Dynamics: Economic Growth and Policy

Household Dynamics: Economic Growth and Policy uniquely integrates dynamic decision making by households, the collective implications of those decisions for economic growth and inequality, and their consequences for policy. Written by a prominent author in the field, Household Dynamics develops intertemporal models of consumption, saving, human capital accumulation, investments in children, intergenerational transfers, division of labor, and fertility. The implications of these models are then assessed intuitively-without econometrics-in terms of the empirical literature. This furthers a rich microeconomic analysis of tax, transfer, and social insurance policies. Household decisions are crucial inputs into the formulation of economic growth models. A variety of general equilibrium growth frameworks are developed, each selecting from among human and physical capital accumulation, population growth, and technical change. These are employed to address earnings inequality, transitional dynamics, and longer-term neoclassical and endogenous growth. Fiscal policy applications include generational accounting, Social Security, and income taxation. Household Dynamics is a clear and accessible text appropriate for advanced undergraduate- and graduate-level courses. Although the models are developed in-depth, the analysis presupposes only a solid grounding in intermediate economic theory and exposure to the fundamental concepts of differential calculus. The emphasis on recent results, the depth of analysis, and the breadth of topics integrated also make this book a valuable reference for researchers.