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What Do We Know (And Not Know) About Potential Output?
... that potential output is the “maximum production without inflationary pressure” (Okun, 1970, p. 133)—that is, the level of output at which there is no pressure for inflation to either increase or decrease. In most, if not all, macroeconomic models, the second (flexible price) definition converges in ...
... that potential output is the “maximum production without inflationary pressure” (Okun, 1970, p. 133)—that is, the level of output at which there is no pressure for inflation to either increase or decrease. In most, if not all, macroeconomic models, the second (flexible price) definition converges in ...
Labor productivity slowdown in the developed
... slowing down as well. The latter face the problem of ending up in the middle income trap.16 Economic growth in most countries has furthermore become more and more debt-driven. 17 To close the demand gap, increasing long-term public and private debt is created. This however is unsustainable in the lo ...
... slowing down as well. The latter face the problem of ending up in the middle income trap.16 Economic growth in most countries has furthermore become more and more debt-driven. 17 To close the demand gap, increasing long-term public and private debt is created. This however is unsustainable in the lo ...
NBER WORKING PAPERS SERIES IS INEQUALITY HARMFUL FOR GROWTH? THEORY AND EVIDENCE
... development.3 The Kuznets curve remains a controversial concept both theoretically and Romer (1989a) surveys the literature on endogenous growth. Barro and Sala i Martin (1990) and Rebelo (1990) discuss the growth consequences of alternative (exogenous) policies. Romer (1990) spells out the income d ...
... development.3 The Kuznets curve remains a controversial concept both theoretically and Romer (1989a) surveys the literature on endogenous growth. Barro and Sala i Martin (1990) and Rebelo (1990) discuss the growth consequences of alternative (exogenous) policies. Romer (1990) spells out the income d ...
Demand Led Recession
... 1. Consumers become more confident: ( AD / AS ) will ( Inc / Dec ) which causes, in the short run, income to ( Inc / Dec ), unemployment ( Inc / Dec ), and prices to ( Inc / Dec ). This economy would be described as undergoing a ( Recession / Expansion ). 2. The Government raises taxes on consumers ...
... 1. Consumers become more confident: ( AD / AS ) will ( Inc / Dec ) which causes, in the short run, income to ( Inc / Dec ), unemployment ( Inc / Dec ), and prices to ( Inc / Dec ). This economy would be described as undergoing a ( Recession / Expansion ). 2. The Government raises taxes on consumers ...
Reaction Functions in a Small Open Economy: What Role for Non
... services that are imported or that are in competition with foreign goods, either in domestic or foreign markets. The non-tradable sector comprises all those goods that do not face foreign competition. ...
... services that are imported or that are in competition with foreign goods, either in domestic or foreign markets. The non-tradable sector comprises all those goods that do not face foreign competition. ...
06 Mohammad Afzal - Lahore School of Economics
... The signs of the relative price variable and world income are correct and significant in the traditional demand equation for total exports. The estimation results provide consistent estimates of the export demand and supply elasticities and are comparable to other studies. World income turns out to ...
... The signs of the relative price variable and world income are correct and significant in the traditional demand equation for total exports. The estimation results provide consistent estimates of the export demand and supply elasticities and are comparable to other studies. World income turns out to ...
FINALTERM EXAMINATION ECO401- Economics (Session
... The upward-sloping aggregate supply curve indicates that: ► As firms increase their level of output, the cost of producing an extra unit increases. ► An increase in aggregate demand causes little, if any increase in real output the economy is operating in the long run. ► Any increase in aggregate de ...
... The upward-sloping aggregate supply curve indicates that: ► As firms increase their level of output, the cost of producing an extra unit increases. ► An increase in aggregate demand causes little, if any increase in real output the economy is operating in the long run. ► Any increase in aggregate de ...
M-Afzal
... exports. Adjusted R2 and D.W. are satisfactory showing statistical fit and reliability of the equation. Tables 2 and 3 show the various forms of the export supply function. Total export supply function in traditional form [Equation 2] is positively sloped and although the relative price is positive ...
... exports. Adjusted R2 and D.W. are satisfactory showing statistical fit and reliability of the equation. Tables 2 and 3 show the various forms of the export supply function. Total export supply function in traditional form [Equation 2] is positively sloped and although the relative price is positive ...
increase
... a. New entrants into the labor force have trouble finding jobs. b. Workers leave their current jobs to find better jobs. c. Workers are laid off because AD has declined. d. Workers are fired because their skills are no longer in demand. (52%) 15. In the country of Agronomia, banks charge 10% interes ...
... a. New entrants into the labor force have trouble finding jobs. b. Workers leave their current jobs to find better jobs. c. Workers are laid off because AD has declined. d. Workers are fired because their skills are no longer in demand. (52%) 15. In the country of Agronomia, banks charge 10% interes ...
National Income
... “The labour and capital resources of a country acting on its natural resources produce annually a certain net aggregate of commodities, material and immaterial including services of all kinds…. This is the true net annual income or revenue of the country or the national dividend.” ...
... “The labour and capital resources of a country acting on its natural resources produce annually a certain net aggregate of commodities, material and immaterial including services of all kinds…. This is the true net annual income or revenue of the country or the national dividend.” ...
QA F582 National Economy
... What factors affect the level of consumption? Main influences on household spending are: Real disposable income It is the major determinant of the level of consumption. An increase in disposable income increases consumption. The average propensity to consume (apc). The lower the value of the apc ...
... What factors affect the level of consumption? Main influences on household spending are: Real disposable income It is the major determinant of the level of consumption. An increase in disposable income increases consumption. The average propensity to consume (apc). The lower the value of the apc ...
To Save or To Consume: Linking Growth Theory with the Keynesian
... Forthcoming, Journal of Economic Education, Spring 2007. Labor supply in the Solow model is determined solely by the population. That is, the long-run labor supply is perfectly inelastic with respect to the real wage.1 For simplicity, assume there is no population growth and the total labor force i ...
... Forthcoming, Journal of Economic Education, Spring 2007. Labor supply in the Solow model is determined solely by the population. That is, the long-run labor supply is perfectly inelastic with respect to the real wage.1 For simplicity, assume there is no population growth and the total labor force i ...
320KB - Treasury.gov.au
... forecast to be 4¼ per cent in 2012, rising to 5 per cent in both 2013 and 2014, considerably faster than the world as a whole. The relative strength of Australia’s major trading partners continues to provide impetus to export growth. Notwithstanding this, the outlook for export growth has been down ...
... forecast to be 4¼ per cent in 2012, rising to 5 per cent in both 2013 and 2014, considerably faster than the world as a whole. The relative strength of Australia’s major trading partners continues to provide impetus to export growth. Notwithstanding this, the outlook for export growth has been down ...
THE SPENDING AND SAVING BEHAVIOUR OF THE FINNISH THE FINNISH ECONOMY
... consumption. The two factors are negatively correlated. For example, in a particular time frame and with a fixed income, if an individual is consuming more, it means that he/she is saving less. Whereas, if an individual is saving more, then it means that he/she is consuming less. This example is a g ...
... consumption. The two factors are negatively correlated. For example, in a particular time frame and with a fixed income, if an individual is consuming more, it means that he/she is saving less. Whereas, if an individual is saving more, then it means that he/she is consuming less. This example is a g ...
Macroeconomics Chamberlin and Yueh
... • Examined the approaches to growth undertaken by successful and less successful developing and transition economies over the past half century. Their experiences have been diverse. • We identified some of the main elements of economic development that has contributed to divergent growth rates aroun ...
... • Examined the approaches to growth undertaken by successful and less successful developing and transition economies over the past half century. Their experiences have been diverse. • We identified some of the main elements of economic development that has contributed to divergent growth rates aroun ...
AP Review wk 4
... Shifts in the Aggregate Demand Curve • The AD curve will shift when the components of spending change (AD=C + I + G + X) – Any non-price-level change that increases aggregate spending (on domestic goods) shifts AD to the right. – Any non-price-level change that decreases aggregate spending (on dome ...
... Shifts in the Aggregate Demand Curve • The AD curve will shift when the components of spending change (AD=C + I + G + X) – Any non-price-level change that increases aggregate spending (on domestic goods) shifts AD to the right. – Any non-price-level change that decreases aggregate spending (on dome ...
Awareness of demand-side polices in the Great Depression and the
... Some critics argue that happiness studies can be flawed, since happiness cannot be measured and even an individual cannot be trusted to correctly judge their own happiness. ...
... Some critics argue that happiness studies can be flawed, since happiness cannot be measured and even an individual cannot be trusted to correctly judge their own happiness. ...
PDF
... from developed to developing countries. Developing countries showed a shift from basic staples ...
... from developed to developing countries. Developing countries showed a shift from basic staples ...
Document
... 8. Classical economists believed that the a. price system was stable. b. goal of full employment was impossible. c. price system automatically adjusts the economy to full employment in the long run. d. government should not attempt to restore ...
... 8. Classical economists believed that the a. price system was stable. b. goal of full employment was impossible. c. price system automatically adjusts the economy to full employment in the long run. d. government should not attempt to restore ...
M.Sc. Economics
... Module 2: Role of Markets, their Functioning and Welfare Markets and competition – determinants of individual demand/supply, demand/supply schedule and demand/supply curve, market versus individual demand/supply, shifts in the demand/supply curve – demand and supply together – how prices allocate re ...
... Module 2: Role of Markets, their Functioning and Welfare Markets and competition – determinants of individual demand/supply, demand/supply schedule and demand/supply curve, market versus individual demand/supply, shifts in the demand/supply curve – demand and supply together – how prices allocate re ...
Ragnar Nurkse's balanced growth theory
The balanced growth theory is an economic theory pioneered by the economist Ragnar Nurkse (1907–1959). The theory hypothesises that the government of any underdeveloped country needs to make large investments in a number of industries simultaneously. This will enlarge the market size, increase productivity, and provide an incentive for the private sector to invest.Nurkse was in favour of attaining balanced growth in both the industrial and agricultural sectors of the economy. He recognised that the expansion and inter-sectoral balance between agriculture and manufacturing is necessary so that each of these sectors provides a market for the products of the other and in turn, supplies the necessary raw materials for the development and growth of the other.Nurkse and Paul Rosenstein-Rodan were the pioneers of balanced growth theory and much of how it is understood today dates back to their work.Nurkse's theory discusses how the poor size of the market in underdeveloped countries perpetuates its underdeveloped state. Nurkse has also clarified the various determinants of the market size and puts primary focus on productivity. According to him, if the productivity levels rise in a less developed country, its market size will expand and thus it can eventually become a developed economy. Apart from this, Nurkse has been nicknamed an export pessimist, as he feels that the finances to make investments in underdeveloped countries must arise from their own domestic territory. No importance should be given to promoting exports.