In Dynamic Macroeconomic Analysis: Theory and Policy in General Equilibrium, Altug, Chadha and Nolan, hereafter ‘ACN’, have undertaken the extremely difficult task of bringing the reader up to date on the vast literature that has developed in this key area of economics since such seminal books as Cooley's Frontiers Of Business Cycle Research (1995).

ACN tackle this formidable assignment by recruiting top scholars to write individual chapters. Each individual chapter is of exceptionally high quality because each scholar is a first-rate expert in the chapter's area.

The approach of the book is ‘quantitative theorising’, in the sense that each chapter presents not only recent developments in theory but also recent developments in compilation of the facts that confront the theory. Discrepancies between facts and theories are carefully discussed. Many of the chapters offer modifications to the baseline theory that make it do a better job of matching the facts.

I give the reader a quick overview of the contents of this book in a brief introduction to each of the chapters. Three chapters are discussed in more detail than the others in order to keep my foreword within standard space limits. But all of the chapters are equally exciting and have equal command on the reader's attention. I hope this somewhat unusual approach to writing a foreword will entice more readers to add this important book to their libraries. In addition to saying a few words about the chapters, I shall use the discussion of some of them to give some reflections about the field they cover as well as give some speculations and opinions about potentially fruitful future research.

Jim Pemberton (chapter 1) reviews dynamic life cycle consumption/savings models, the facts they are designed to explain, the struggles in attempting to modify the basic core model to fit these facts and other uses to which they are put. Particularly interesting is discussion of how minor modifications can lead to big and rather counterfactual predictions by some of the models. For example, adding a small safety net in one model caused the model's consumer to borrow too large an amount of money early on to be consistent with fact.