Recent reports predict that, barring any changes, the Social Security program will become insolvent--no longer able to pay promised benefits in full--around the year 2030, well within the retirement years of the baby boom generation. They also predict that the trust fund will stop being a net contributor and become instead a net claimant on the federal budget in the year 2013--much earlier than previously thought. With the world population aging, the increasing number of dependent senior citizens in all countries will become a major public policy issue that will have to be addressed...

These two lectures explore how time is modeled in theoretical analyses of individual industries and of the entire economy. The atemporal Marshallian model is contrasted with an explicit time model with uncertainty about costs at the firm level. The book also examines data on job creation and job destruction; price setting behavior in monopolistic competition and costly search models; data on price changes; and both cyclical and seasonal data on the entire economy. With a focus on the command over purchasing power, the Arrow-Debreu and Hicksian ISLM models are compared with a number of...