Robustness

Synopsis

best Policies Can Be Evaluated, In Theory At Least, Given An Economy. But Macroeconomists Have Only Model Economies At Their Disposal And Necessarily These Economies Are Abstractions. A Concern Then Is That The Model Economy Used To Evaluate Policy Will Provide Poor Guidance In Practice. This Leads To The Search For Policy That Performs Well For A Broad Class Of Economies. This Is What Robust Control Theory Is All About. In This Book, Hansen And Sargent Greatly Extend Robust Control Theory To Make It Useful In The Macro Policy Setting. This Is A Major Contribution To Macroeconomics.--edward C. Prescott, Nobel Prize-winning Economist

the Pathbreaking Work Of Hansen And Sargent Extends Macroeconomic Theory Beyond The Bayesian Paradigm. They Retain The Analytical Power Of The Classical Mathematical Models While Adding To Them The Subtleties Of An Uncertain World. Using Tools From Robust Control Theory, They Present A Model In Which An Individual's Probabilistic Belief Is Subject To Noise, Or To Uncertainty, And Redo Much Of Macroeconomic Theory Under This Assumption.--itzhak Gilboa, Tel Aviv University

hansen And Sargent Were Among The Cadre Of Macroeconomists Who Challenged Conventional (keynesian) Wisdom, And They Are At It Again, In A Book That Sparkles With Ideas And Analysis Of Fundamental Problems In Dynamic Macroeconomics. The Specific Results Reported Here Are, Of Course, Interesting But This Book Is So Much More: For Young And Ambitious Economic Theorists, This Book Is Like The California Gold Fields In 1848.--david Kreps, Stanford University