Behavioural Macroeconomics

Edited by Ian M. McDonald, Professor of Economics, University of Melbourne, Joint Editor, Australian Economic Review and Fellow of the Academy of Social Sciences, Australia

'I only wish that Ian McDonald's Behavioural Macroeconomics had been available when I was preparing A Guide to Behavioral Economics; it certainly would have provided me with material to fill in a number of gaps and cite several additional important concerns!'

• Contents:AcknowledgementsIntroduction Ian M. McDonald PART I PSYCHOLOGY AND ECONOMICS – A HISTORICAL PERSPECTIVE1. Luigino Bruni and Robert Sugden (2007), ‘The Road Not Taken: How Psychology was Removed from Economics, and How it Might be Brought Back’ PART II SOCIAL NORMS AND MACROECONOMICS 2. George A. Akerlof (2007), ‘The Missing Motivation in Macroeconomics’PART III THE NATURE OF UNEMPLOYMENT 3. Andrew E. Clark and Andrew J. Oswald (1994), ‘Unhappiness and Unemployment’ 4. M. Daniele Paserman (2008), ‘Job Search and Hyperbolic Discounting: Structural Estimation and Policy Evaluation’PART IV SOME IMPLICATIONS OF EQUITY FOR UNEMPLOYMENT AND INFLATION5. George A. Akerlof and Janet L. Yellen (1990), ‘The Fair Wage-Effort Hypothesis and Unemployment’6. Truman F. Bewley (1995), ‘A Depressed Labor Market as Explained by Participants’7. Ernst Fehr and Armin Falk (1999), ‘Wage Rigidity in a Competitive Incomplete Contract Market’8. Ernst Fehr and Georg Kirchsteiger (1994), ‘Insider Power, Wage Discrimination and Fairness’9. Lawrence H. Summers (1988), ‘Relative Wages, Efficiency Wages and Keynesian Unemployment’Part V SOME IMPLICATIONS OF LOSS AVERSION FOR UNEMPLOYMENT AND INFLATION10. V. Bhaskar (1990), ‘Wage Relativities and the Natural Range of Unemployment’11. Hugh Sibly (2002), ‘Loss Averse Customers and Price Inflexibility’ 12. Ian M. McDonald and Hugh Sibly (2005), ‘The Diamond of Macroeconomic Equilibria and the Non-Inflationary Expansion’ 13. J.N. Nye, I.M. McDonald and H. Sibly (2001), ‘An Estimate of the Range of Equilibrium Rates of Unemployment for Australia’14. John C. Driscoll and Steinar Holden (2004), ‘Fairness and Inflation Persistence’PART VI UNEMPLOYMENT AND INFLATION IN THE SOCIAL WELFARE FUNCTION15. Rafael Di Tella, Robert J. MacCulloch and Andrew J. Oswald (2001), ‘Preferences Over Inflation and Unemployment: Evidence from Surveys of Happiness’PART VII CONSUMPTION AND SAVING 16. Richard H. Thaler and Shlomo Bernatzi (2004), ‘Save More Tomorrow™: Using Behavioural Economics to Increase Employee Saving’17. David Bowman, Deborah Minehart and Matthew Rabin (1999), ‘Loss Aversion in a Consumption-savings Model’18. Isabelle Brocas and Juan D. Carrillo (2008), ‘The Brain as a Hierarchical Organization’PART VIII THE GLOBAL FINANCIAL CRISIS19. Ian M. McDonald (2009), ‘The Global Financial Crisis and Behavioural Economics’PART IX ECONOMIC GROWTH AND HAPPINESS 20. David G. Blanchflower and Andrew J. Oswald (2004), ‘Well-being Over Time in Britain and the USA’21. Bruno S. Frey and Alois Stutzer (2002), ‘What Can Economists Learn from Happiness Research?’22. B. Curtis Eaton and Mukesh Eswaran (2009), ‘Well-being and Affluence in the Presence of a Veblen Good’23. Jonathan D. Cohen (2005), ‘The Vulcanisation of the Human Brain: A Neural Perspective on Interactions Between Cognition and Emotion’PART X INCOME DISTRIBUTION AND THE UNDERCLASS 24. Robert J. Oxoby (2004), ‘Cognitive Dissonance, Status and Growth of the Underclass’