This work was written during my visits at CORE (Belgium), at the Faculty of Economics and Politics in Cambridge (England), and at the Department of Mathematics at the ETH in ZUrich. I wish to thank J.H. Dr~ze (CORE) for most help ful suggestions, and I am indebted to H. BUhlmann (ETH) for his advice and for encouragement. The comments by M. Granzio1, M. Janssen and by anonymous referees were very useful. However, I assume the responsibility for remaining errors. I am grateful to R. Boller, I. Lather and M. Urfer for their careful typing of the manuscript. Support by the SWiss National Science Foundation is acknowledged. An earlier version of this work was presented at the European Meeting of the Econometric Society 1981 in Amsterdam. In 1981 it was accepted as a "Habi1itations schrift" in Mathematical Economics by the Department of Mathematics at the ETH in ZUrich. CONTENTS Introduction 1 Part I: The General Model 8 1.1. Formulation of the General Model 8 1.1.1. General Properties 8 1.1.2. The Consumer 10 1.1.3. The Producer 14 1.1.4. The Public Sector 16 Equilibrium 1.2.

This work was written during my visits at CORE (Belgium), at the Faculty of Economics and Politics in Cambridge (England), and at the Department of Mathematics at the ETH in ZUrich. I wish to thank J.H. Dr~ze (CORE) for most help ful suggestions, and I am indebted to H. BUhlmann (ETH) for his advice and for encouragement. The comments by M. Granzio1, M. Janssen and by anonymous referees were very useful. However, I assume the responsibility for remaining errors. I am grateful to R. Boller, I. Lather and M. Urfer for their careful typing of the manuscript. Support by the SWiss National Science Foundation is acknowledged. An earlier version of this work was presented at the European Meeting of the Econometric Society 1981 in Amsterdam. In 1981 it was accepted as a "Habi1itations schrift" in Mathematical Economics by the Department of Mathematics at the ETH in ZUrich. CONTENTS Introduction 1 Part I: The General Model 8 1.1. Formulation of the General Model 8 1.1.1. General Properties 8 1.1.2. The Consumer 10 1.1.3. The Producer 14 1.1.4. The Public Sector 16 Equilibrium 1.2.

This chapter discusses various past and future aspects of the global economy. There has been a huge transformation of the global economy in the last several years. Articles on the future of energy in the global economy by Jeffrey Ball and on measuring inequality by Jonathan Ostry and Andrew Berg are also illustrated. Since the 2008 global crisis, global economists must change the way they look at the world.

Traditionally, economic growth and business cycles have been treated independently. However, the dependence of GDP levels on its history of shocks, what economists refer to as “hysteresis,” argues for unifying the analysis of growth and cycles. In this paper, we review the recent empirical and theoretical literature that motivate this paradigm shift. The renewed interest in hysteresis has been sparked by the persistence of the Global Financial Crisis and fears of a slow recovery from the Covid-19 crisis. The findings of the recent literature have far-reaching conceptual and policy implications. In recessions, monetary and fiscal policies need to be more active to avoid the permanent scars of a downturn. And in good times, running a high-pressure economy could have permanent positive effects.

This paper reviews the theoretical and empirical literature on the effectiveness of fiscal policy. The focus is on the size of fiscal multipliers, and on the possibility that multipliers can turn negative (i.e., that fiscal contractions can be expansionary). The paper concludes that fiscal multipliers are overwhelmingly positive but small. However, there is some evidence of negative fiscal multipliers.

This broad survey of unemployment will be a major source of reference for both scholars and students.

Many studies predict massive job losses and real wage decline as a result of the ongoing widespread automation of production, a trend that may be further aggravated by the COVID-19 crisis. Yet automation is also expected to raise productivity and output. How can we share the gains from automation more widely, for the benefit of all? And what are the attendant equity-efficiency trade-offs? We analyze this issue by considering the effects of fiscal policies that seek to redistribute the gains from automation and address income inequality. We use a dynamic general equilibrium model with monopolistic competition, including a novel specification linking corporate power to automation. While fiscal policy cannot eliminate the classic equity-efficiency trade-offs, it can help improve them, reducing inequality at small or no loss of output. This is particularly so when policy takes advantage of novel, less distortive transmission channels of fiscal policy created by the empirically observed link between corporate market power and automation.