Macroeconomics at the service of public policy / edited by Thomas J. Sargent, Jouko Vilmunen.

Includes bibliographical references and index.

This text uses state of the art models from the frontier of macroeconomics to answer key questions about how the economy functions and how policy should be conducted. It includes contributions on the market as a bearer of risk, the European Debt crisis, and possible stagflation of the US economy.

Is the market system an efficient bearer of risk? / Kenneth J. Arrow -- The European debt crisis / Hans-Werner Sinn -- The stagnation regime of the new Keynesian model and recent US policy / George W. Evans -- Notes on agents' behavioural rules under adaptive learning and studies of monetary policy / Seppo Honkapohja, Kaushik Mitra, and George W. Evans -- Learning and model validation : an example / In-Koo Cho and Kenneth Kasa -- Bayesian model averaging, learning, and model selection / George W. Evans [and others] -- History-dependent public policies / David Evans and Thomas J. Sargent -- Finite-horizon learning / William Branch, George W. Evans, and Bruce McGough -- Regime switching, monetary policy, and multiple equilibria / Jess Benhabib -- Too many dragons in the Dragons' den / Martin Ellison and Chryssi Giannitsarou -- The impacts of labour taxation reform under domestic heterogenous labour markets and flexible outsourcing / Erkki Koskela.