This presentation of advanced macroecomics emphasizes the dynamic behaviour of the ecomy. Developed capitalist ecomies are characterized by large stocks of durable goods and the intertemporal nature of ecomic decisions that these involve. Such intertemporal decisions based on expectations about an uncertain future are the main sources of mistakes and consequent ecomic fluctuations. In this book, therefore, macroecomic theory and policy are viewed as applications of capital theory. Professor Nagatani traces the early contributions to this viewpoint and critically surveys the modern literature. To aid the reader, a lucid exposition of dynamic optimization is provided before the theory is developed analytically. The framework employed has vel aspects and captures the chief characteristics of advanced ecomies. The analysis is used to draw out broad policy conclusions. This book is suitable for advanced students, for whom examples are provided at the end of chapters. However, the original perspective offers much to interest specialists also.