2. Keynes and the failure of self-correction
... During the Great Depression, the high unemployment and the failure of selfcorrection challenged the classical doctrine. Keynes asked: if supply creates its own demand, why are we having a depression?. Keynes argued that the price mechanism is not fast enough to ensure the selfcorrection of the econo ...
... During the Great Depression, the high unemployment and the failure of selfcorrection challenged the classical doctrine. Keynes asked: if supply creates its own demand, why are we having a depression?. Keynes argued that the price mechanism is not fast enough to ensure the selfcorrection of the econo ...
Chapter 15
... Activists argue that monetary policy should be deliberately used to smooth out the business cycle. They are in favor of economic finetuning, which is the (usually frequent) use of monetary policy to counteract even small undesirable movements in economic activity. Sometimes, the monetary policy th ...
... Activists argue that monetary policy should be deliberately used to smooth out the business cycle. They are in favor of economic finetuning, which is the (usually frequent) use of monetary policy to counteract even small undesirable movements in economic activity. Sometimes, the monetary policy th ...
Investment
... terms by dividing both MPK r gtp1 ptK , NEW rckt sides by the price level. Define the real price of capital good as Pt K , NEW k pt price of capital good Pt relative to the firm’s output price. K ...
... terms by dividing both MPK r gtp1 ptK , NEW rckt sides by the price level. Define the real price of capital good as Pt K , NEW k pt price of capital good Pt relative to the firm’s output price. K ...
Transitional Dynamics in the Solow
... production function into the law of motion of capital, and by multiplying through by kt , we get ...
... production function into the law of motion of capital, and by multiplying through by kt , we get ...
Economic Growth
... Figure 3.2. The production function in per-capita form. The concept of a production function already allows to sift and sort some preliminary thoughts about underdevelopment. For instance, using equation (3.1), one might argue that the A term is somehow lower for developing countries: it is in techn ...
... Figure 3.2. The production function in per-capita form. The concept of a production function already allows to sift and sort some preliminary thoughts about underdevelopment. For instance, using equation (3.1), one might argue that the A term is somehow lower for developing countries: it is in techn ...
Page 1 Page 2 THE PHASE OFUNLIMITED SUPPLIES OF LABOR
... paternal behavior of the household head. With respect to the latter feature, the prewar Japanese pattern was typical especially as it was characterized by the existence of the right of primogeniture. 4 For the sake of simplicity we have assumed that no landlords exist in sector II. If they were to b ...
... paternal behavior of the household head. With respect to the latter feature, the prewar Japanese pattern was typical especially as it was characterized by the existence of the right of primogeniture. 4 For the sake of simplicity we have assumed that no landlords exist in sector II. If they were to b ...
NBER WORKING PAPER SERIES INTERNATIONAL LENDING AND BORROWING IN A STOCHASTIC SEQUENCE EQUILIBRIUM
... utility is bounded above. Clarida (1985) establishes that these latter conditions are sufficient to insure the existence of a stationary distribution for asset holdings in the more general case in which lending and borrowing (in amounts which can be repaid with probability one) are ...
... utility is bounded above. Clarida (1985) establishes that these latter conditions are sufficient to insure the existence of a stationary distribution for asset holdings in the more general case in which lending and borrowing (in amounts which can be repaid with probability one) are ...
chapter 8. the natural rate of unemployment and the phillips curve
... presented in Chapter 13. Note that the interpretations of the changes in the natural rate tend to come after the fact. Such changes are difficult to predict. Third, the relationship between inflation and unemployment may depend on the degree of inflation. For example, if workers will accept real wag ...
... presented in Chapter 13. Note that the interpretations of the changes in the natural rate tend to come after the fact. Such changes are difficult to predict. Third, the relationship between inflation and unemployment may depend on the degree of inflation. For example, if workers will accept real wag ...
Week 3 Physical Capital - Course ON-LINE
... workers are paid are the return to the owners of the capital. The return that capital earns is often the incentive for its creation. If you decide not to consume some of your income this year and instead invest it in the capital of some corporation, you do so in the hope of earning payments for the ...
... workers are paid are the return to the owners of the capital. The return that capital earns is often the incentive for its creation. If you decide not to consume some of your income this year and instead invest it in the capital of some corporation, you do so in the hope of earning payments for the ...
dynamic AD
... real from nominal variables, and monetary neutrality is the property According to which monetary policy does not influence real variables. The equations on the previous slide immediately show that the central bank’s inflation target pt* influences only inflation pt, expected inflation Etpt+1, and th ...
... real from nominal variables, and monetary neutrality is the property According to which monetary policy does not influence real variables. The equations on the previous slide immediately show that the central bank’s inflation target pt* influences only inflation pt, expected inflation Etpt+1, and th ...
Long-lasting consequences of the European crisis - ECB
... in the EMU, competitiveness imbalances, built-up during the pre-crisis period, have to be corrected through changes in nominal wages, precisely at the time when nominal rigidities and the zero lower bound bind and, thus, wage cuts are most costly. The main goal of this paper is to show how the inter ...
... in the EMU, competitiveness imbalances, built-up during the pre-crisis period, have to be corrected through changes in nominal wages, precisely at the time when nominal rigidities and the zero lower bound bind and, thus, wage cuts are most costly. The main goal of this paper is to show how the inter ...