Sumru Altug is Professor at Koc University, Turkey. She is the joint author of Dynamic Choice and Asset Markets (with Pamela Labadie, 1995). Jagjit Chadha is Lecturer in Economics at Cambridge University and Fellow of Clare College, Cambridge. Charles Nolan is Lecturer in the Department of Economics and Finance at the University of Durham.

• Foreword William Brock; 1. The application of stochastic dynamic programming methods to household consumption and saving decisions: a critical survey Jim Pemberton; 2. Investment dynamics Fanny S. Demers, Michael Demers and Sumru Altug; 3. Taxes and welfare in a stochastically growing economy Stephen J. Turnovsky; 4. Recent developments in the microeconomic stabilisation literature: is price stability a good stabilisation strategy? Matt Canzoneri, Robert Cumby and Behzad Diba; 5. On the interaction of monetary and fiscal policy Jagjit Chadha and Charles Nolan; 6. Dynamic general equilibrium analysis: the open economy dimension Philip Lane and Giovanni Ganelli; 7. Credit frictions and 'sudden stops' in small open economies: an equilibrium business cycle framework for emerging markets crises Cristina Arellano and Enrique Mendoza; 8. Asset pricing in macroeconomic models Paul Söderlind; 9. Labor market search and monetary shocks Carl Walsh; 10. On the introduction of endogenous labor income in deterministic and stochastic endogenous growth models Stephen J. Turnovsky; 11. Growth and business cycles Gabriel Talmain.