"Macroeconomic Theory," in its first edition, was widely adopted for use as a graduate text; this updated and expanded version should find even greater popularity as a text and as a research reference. It has been substantially revised to include three entirely new chapters: The Consumption Function, Government Debt and Taxes, and Dynamic Optimal Taxation. Significant additions have been made to three of the original chapters dealing with difference equations, stochastic difference equations, and investment under uncertainty.

This manual presents detailed solutions to all the problems contained in Thomas Sargent's Macroeconomic Theory, Second Edition. The material in Sargent's book is up-to-date and challenging. The exercises not only illustrate the theoretical foundations of macroeconomic research but also treat issues and problems from the recent literature. This manual serves as a useful reference for students and researchers alike.