The Digital Economist
... Expansionary policies, therefore, include increased government expenditure, lower taxes (tax rates) or both. Typically such policies would be used in cases where the economy is operating well below its potential. In such cases there are excess resources available for production and thus little press ...
... Expansionary policies, therefore, include increased government expenditure, lower taxes (tax rates) or both. Typically such policies would be used in cases where the economy is operating well below its potential. In such cases there are excess resources available for production and thus little press ...
Economics “Ask the Instructor” Clip 76 Transcript
... Economics “Ask the Instructor” Clip 76 Transcript What is crowding out? Crowding out refers to the tendency for an increase in one sector’s spending to cause a reduction in another sector’s spending. Crowding out is most often discussed in the context of fiscal policy, particularly the effect that i ...
... Economics “Ask the Instructor” Clip 76 Transcript What is crowding out? Crowding out refers to the tendency for an increase in one sector’s spending to cause a reduction in another sector’s spending. Crowding out is most often discussed in the context of fiscal policy, particularly the effect that i ...
Real Business Cycles: A New Keynesian Perspective
... in consumption and leisure. Real business cycle theorists therefore assume that there are substantial fluctuations in the rate of technological change. In a recession, the available production technology is relatively unfavorable. The marginal product of labor and thus the real wage are low. In resp ...
... in consumption and leisure. Real business cycle theorists therefore assume that there are substantial fluctuations in the rate of technological change. In a recession, the available production technology is relatively unfavorable. The marginal product of labor and thus the real wage are low. In resp ...
NBER WORKING PAPER SERIES KEYNESIAN, NEW KEYNESIAN, AND NEW CLASSICAL ECONOMICS Bruce Greenwald
... (keeping real wages, say, constant) employment would increase; but this is only because of an assumed important real balance effect. One should also note that in the short run, even if there were real balance effects of the kind noted by Pigou and Patinkin, these effects might be outweighed, in the ...
... (keeping real wages, say, constant) employment would increase; but this is only because of an assumed important real balance effect. One should also note that in the short run, even if there were real balance effects of the kind noted by Pigou and Patinkin, these effects might be outweighed, in the ...
How Did Economists Get It So Wrong?
... Joseph Schumpeter in 1934 — 1934! They are, he added, “forms of something which has to be done.” But many, and eventually most, economists turned to the insights of John Maynard Keynes for both an explanation of what had happened and a solution to future depressions. Keynes did not, despite what you ...
... Joseph Schumpeter in 1934 — 1934! They are, he added, “forms of something which has to be done.” But many, and eventually most, economists turned to the insights of John Maynard Keynes for both an explanation of what had happened and a solution to future depressions. Keynes did not, despite what you ...
Word Document
... Classical economists believed the price level would adjust whenever aggregate demand shifted, so government interventions could have no effect on aggregate output. o In classical theory the price level was perfectly flexible, which means AS was vertical. Keynes believed classical economics held ...
... Classical economists believed the price level would adjust whenever aggregate demand shifted, so government interventions could have no effect on aggregate output. o In classical theory the price level was perfectly flexible, which means AS was vertical. Keynes believed classical economics held ...
US Business Cycle Expansions and Contractions
... In determining that a trough occurred in June 2009, the committee did not conclude that economic conditions since that month have been favorable or that the economy has returned to operating at normal capacity. Rather, the committee determined only that the recession ended and a recovery began in th ...
... In determining that a trough occurred in June 2009, the committee did not conclude that economic conditions since that month have been favorable or that the economy has returned to operating at normal capacity. Rather, the committee determined only that the recession ended and a recovery began in th ...
Measuring Health, Unemployment, Inflation
... The Cost-Push Theory According to the cost-push theory, inflation occurs when producers raise prices in order to meet increased costs, or changes in aggregate supply. Cost-push inflation can lead to a wage-price spiral — the process by which rising wages cause higher prices, and higher prices ca ...
... The Cost-Push Theory According to the cost-push theory, inflation occurs when producers raise prices in order to meet increased costs, or changes in aggregate supply. Cost-push inflation can lead to a wage-price spiral — the process by which rising wages cause higher prices, and higher prices ca ...
econs pasco {econ 152} - chrisbonline.com
... 58. Fiscal policy attempts to stabilise the economy by changes in a. the interest rate b. the money supply c. banking regulations d. taxes and spending 59. Which of the following would likely cause the short-run aggregate supply curve to shift to the left? a. a decrease in consumer spending b. a de ...
... 58. Fiscal policy attempts to stabilise the economy by changes in a. the interest rate b. the money supply c. banking regulations d. taxes and spending 59. Which of the following would likely cause the short-run aggregate supply curve to shift to the left? a. a decrease in consumer spending b. a de ...
The Classical-Keynesian Paradigm: Policy Debate in Contemporary
... comprehensive was required to be done to help rescue and survive the economic system. It was this milieu when Adam Smith (1723-1790), a Scot philosopher appeared on the scene, though a bit late. He is considered as the founder of “modern” economics, in spite of the fact that his theory was named as ...
... comprehensive was required to be done to help rescue and survive the economic system. It was this milieu when Adam Smith (1723-1790), a Scot philosopher appeared on the scene, though a bit late. He is considered as the founder of “modern” economics, in spite of the fact that his theory was named as ...
Notes
... One limitation of the Keynesian Cross is that investment is treated as exogenous. In reality, investment (buying new house or new capital goods) depends on interest rates. In this chapter we learn how interest rate is determined. Then we can allow investment to be endogenous. Key idea 3: people face ...
... One limitation of the Keynesian Cross is that investment is treated as exogenous. In reality, investment (buying new house or new capital goods) depends on interest rates. In this chapter we learn how interest rate is determined. Then we can allow investment to be endogenous. Key idea 3: people face ...
Chapter 24 The Keynesian Framework Chapter 25 The IS-LM World
... D m = f (Y , r ) If MS increases then either income increases or interest rates drop. Supply of Money Fed basically determines supply Few uncontrollable factors (1) banks lending (2) public's preference for cash Letting D=S then solve for interest rate: ...
... D m = f (Y , r ) If MS increases then either income increases or interest rates drop. Supply of Money Fed basically determines supply Few uncontrollable factors (1) banks lending (2) public's preference for cash Letting D=S then solve for interest rate: ...
Unit 10 : Economics - Department of Computing
... say, the financing of budget deficits (and surpluses for that matter). A third cause of money supply growth results from movements of money between our economy and the rest of the world. If more money is flowing into our economy than is flowing out of it, the result will be an increase in our money ...
... say, the financing of budget deficits (and surpluses for that matter). A third cause of money supply growth results from movements of money between our economy and the rest of the world. If more money is flowing into our economy than is flowing out of it, the result will be an increase in our money ...
What are Interest Rates?
... Loanable Funds Theory Interest rates are determined in the debt markets by the supply of loanable funds (lending) and demand for loanable funds (borrowing). The quantity supplied is positively related to interest rates, and the quantity demanded is negatively related to interest rates. Increase in t ...
... Loanable Funds Theory Interest rates are determined in the debt markets by the supply of loanable funds (lending) and demand for loanable funds (borrowing). The quantity supplied is positively related to interest rates, and the quantity demanded is negatively related to interest rates. Increase in t ...
NBER WORKING PAPER SERIES REAL BUSINESS CYCLES: A NEW KEYNESIAN PERSPECTIVE
... Real business cycle theory emphasizes the intertemporal substitution of goods and leisure. ...
... Real business cycle theory emphasizes the intertemporal substitution of goods and leisure. ...
The General Theory and Victoria Chick at 80: A Celebration
... Chick’s stages of banking development: the implications 1. “Intensifies the subordinate position of saving with regard to investment” (Chick 1986: 124) 2. Questions the convention of considering the transmission mechanism “as a purely theoretical matter, independently of institutional context” (Chi ...
... Chick’s stages of banking development: the implications 1. “Intensifies the subordinate position of saving with regard to investment” (Chick 1986: 124) 2. Questions the convention of considering the transmission mechanism “as a purely theoretical matter, independently of institutional context” (Chi ...
Understanding the Significance of the Great Depression
... - aside from those directly traceable to Keynes, who Stoneman quite rightly observes was "not . . . a truly dominant figure" - in the controversies from 1930 to 1936 (the date of The General Theory of Employment, Interest and Money) - emerged from the heterodox tradition of "institutional economics" ...
... - aside from those directly traceable to Keynes, who Stoneman quite rightly observes was "not . . . a truly dominant figure" - in the controversies from 1930 to 1936 (the date of The General Theory of Employment, Interest and Money) - emerged from the heterodox tradition of "institutional economics" ...
Test #1 - Employees Csbsju
... The QTM disequilibrium changes are, of course, short-run adjustment processes in moving to the new long-run equilibrium. These disequilibrium adjustments are also consistent with the neoclassical approach, as well as being a fundamental aspect of Keynesian ideas. Wicksell shifted the transmission me ...
... The QTM disequilibrium changes are, of course, short-run adjustment processes in moving to the new long-run equilibrium. These disequilibrium adjustments are also consistent with the neoclassical approach, as well as being a fundamental aspect of Keynesian ideas. Wicksell shifted the transmission me ...
Rec. GAP
... To solve the Infl. Gap with monetary policy, the fed needs to sell government bonds to lower loans and the money supply to raise interest rates to lower investment spending and decrease AD to AD’. ...
... To solve the Infl. Gap with monetary policy, the fed needs to sell government bonds to lower loans and the money supply to raise interest rates to lower investment spending and decrease AD to AD’. ...
quantitative easing - Sheboygan Economic Club
... In a fractional reserve monetary arrangement, the depository institution system, if not constrained by capital or regulatory issues, is able to create an amount of credit that is some multiple of the amount of “seed” money (i.e., reserves) created out of thin air by the central bank (similar to the ...
... In a fractional reserve monetary arrangement, the depository institution system, if not constrained by capital or regulatory issues, is able to create an amount of credit that is some multiple of the amount of “seed” money (i.e., reserves) created out of thin air by the central bank (similar to the ...
Monetary Policy
... All banks are required to hold a minimum percentage of deposits as reserve. Changes in required reserve ratios can have an important influence on the money supply. Changes in reserve requirements are made sparingly because they present too large change in monetary policy. ...
... All banks are required to hold a minimum percentage of deposits as reserve. Changes in required reserve ratios can have an important influence on the money supply. Changes in reserve requirements are made sparingly because they present too large change in monetary policy. ...
CHAPTER 11 MONETARY AND FISCAL POLICY Solutions to the
... 1.a. An open market operation is an exchange of bonds for money or vice versa by the Fed. In an open market purchase, the Fed buys bonds from the public (generally via government bond dealers) in exchange for money. This action increases the monetary base and therefore the supply of money. In an ope ...
... 1.a. An open market operation is an exchange of bonds for money or vice versa by the Fed. In an open market purchase, the Fed buys bonds from the public (generally via government bond dealers) in exchange for money. This action increases the monetary base and therefore the supply of money. In an ope ...
The Business Cycle
... • R: businesses cut back on output • R: unemployment rate goes up • R: eventually* it reaches a trough. • E: eventually it tops out • R: consumers spend less money • E: sales improve * at an unspecified later time, in the end ...
... • R: businesses cut back on output • R: unemployment rate goes up • R: eventually* it reaches a trough. • E: eventually it tops out • R: consumers spend less money • E: sales improve * at an unspecified later time, in the end ...
quaderni del dipartimento di economia politica e statistica
... Indeed, the necessities must also cover the expenses to raise the next generation of workers (to complete the assimilation of workers to machinery, necessities must perhaps also include the costs of scrapping older workers, that is pensions). Whenever a wage rise is persistent, consumption of new an ...
... Indeed, the necessities must also cover the expenses to raise the next generation of workers (to complete the assimilation of workers to machinery, necessities must perhaps also include the costs of scrapping older workers, that is pensions). Whenever a wage rise is persistent, consumption of new an ...