Wage Rigidity in the Great Depression June, 2012 Christopher Hanes Department of Economics
... measures of real activity from the interwar era, and compare the “forecasts” with the actual 1930s real-wage data. For wage inflation, we use versions of the Phillips curve, allowing for a well-known historical shift in its nature. In the pre-1914 era American wage inflation followed the original P ...
... measures of real activity from the interwar era, and compare the “forecasts” with the actual 1930s real-wage data. For wage inflation, we use versions of the Phillips curve, allowing for a well-known historical shift in its nature. In the pre-1914 era American wage inflation followed the original P ...
GwartPPT014 - Crawfordsworld
... Keynesians argued that the money supply did not matter much. Monetarists challenged the Keynesian view during 1960s and 1970s. According to monetarists, changes in the money supply caused of both inflation and economic instability. While minor disagreements remain, the modern view emerged from t ...
... Keynesians argued that the money supply did not matter much. Monetarists challenged the Keynesian view during 1960s and 1970s. According to monetarists, changes in the money supply caused of both inflation and economic instability. While minor disagreements remain, the modern view emerged from t ...
long-run aggregate supply curve. - IB-Econ
... spending (C, I, Xn), a government must fill the "recessionary gap" by increasing government spending. The economy will NOT "self-‐correct" due to "s'cky wages and prices", meaning there should be an ac've ...
... spending (C, I, Xn), a government must fill the "recessionary gap" by increasing government spending. The economy will NOT "self-‐correct" due to "s'cky wages and prices", meaning there should be an ac've ...
Production and Cpi Day 2010
... 4. Technology [knowledge of how to produce goods in the best possible way] [All of these productivity determinants require an investment, and funds for investment come from saving. [Goal of supply-side economics] ...
... 4. Technology [knowledge of how to produce goods in the best possible way] [All of these productivity determinants require an investment, and funds for investment come from saving. [Goal of supply-side economics] ...
Aggregate Supply - IB-Econ
... spending (C, I, Xn), a government must fill the "recessionary gap" by increasing government spending. The economy will NOT "self-‐correct" due to "s'cky wages and prices", meaning there should be an ac've ...
... spending (C, I, Xn), a government must fill the "recessionary gap" by increasing government spending. The economy will NOT "self-‐correct" due to "s'cky wages and prices", meaning there should be an ac've ...
Lesson 8 - ECO 151
... How much are you going to have to pay these workers to get them to do that? Most likely you will have to pay them more than they are currently making. As you bid up wages in the labor market to attract additional workers, prices in the economy will also rise, because now it costs more to produce you ...
... How much are you going to have to pay these workers to get them to do that? Most likely you will have to pay them more than they are currently making. As you bid up wages in the labor market to attract additional workers, prices in the economy will also rise, because now it costs more to produce you ...
Chapter_23
... business expectations and government policies will change aggregate demand Net exports – Change in the value of exchange rate, income levels abroad and price of competitive foreign goods ...
... business expectations and government policies will change aggregate demand Net exports – Change in the value of exchange rate, income levels abroad and price of competitive foreign goods ...
chapter - Princeton University
... level takes place instantaneously rather than over a long period of time. You might be concerned about this assumption given that in previous chapters we’ve emphasized the difference between the short run and the long run. However, for reasons we’ll explain shortly, this is a reasonable assumption t ...
... level takes place instantaneously rather than over a long period of time. You might be concerned about this assumption given that in previous chapters we’ve emphasized the difference between the short run and the long run. However, for reasons we’ll explain shortly, this is a reasonable assumption t ...
Chapter 1
... A country that has many well-trained macroeconomic analysts will not necessarily have more beneficial macroeconomic policies because (a) economists’ understanding of the economy remains poor. (b) there are few ways in which economists’ complex models can be applied to the real world. (c) economists ...
... A country that has many well-trained macroeconomic analysts will not necessarily have more beneficial macroeconomic policies because (a) economists’ understanding of the economy remains poor. (b) there are few ways in which economists’ complex models can be applied to the real world. (c) economists ...
Econ 100 - Aggregate demand and aggregate supply
... Figure 5 Long-run growth and inflation in the model of aggregate demand and aggregate supply ...
... Figure 5 Long-run growth and inflation in the model of aggregate demand and aggregate supply ...
Document
... Production is less attractive to firms because the prices they receive for their output are on average lower than they expected However, many of their production costs, such as the nominal wage, do not fall production is less profitable than expected firms reduce their quantity supplied the ec ...
... Production is less attractive to firms because the prices they receive for their output are on average lower than they expected However, many of their production costs, such as the nominal wage, do not fall production is less profitable than expected firms reduce their quantity supplied the ec ...
Chapter 19 Output and Inflation in the Short Run: Aggregate Supply
... demand for goods and services. We will also explain how the gradual adjustment of prices and wages over time - reflected in changes in the rate of inflation - tends to pull economic activity towards its ’natural’ rate. One important feature of our analysis is that long run macroeconomic equilibrium ...
... demand for goods and services. We will also explain how the gradual adjustment of prices and wages over time - reflected in changes in the rate of inflation - tends to pull economic activity towards its ’natural’ rate. One important feature of our analysis is that long run macroeconomic equilibrium ...
DOC
... Output change that results from a change in aggregate demand is a permanent effect. A change in aggregate demand leads to a permanent change of higher output. An increase in aggregate demand increases real GDP only temporarily. An increase in aggregate demand increases real GDP by a multiple of the ...
... Output change that results from a change in aggregate demand is a permanent effect. A change in aggregate demand leads to a permanent change of higher output. An increase in aggregate demand increases real GDP only temporarily. An increase in aggregate demand increases real GDP by a multiple of the ...
Assigment 8
... Output change that results from a change in aggregate demand is a permanent effect. A change in aggregate demand leads to a permanent change of higher output. An increase in aggregate demand increases real GDP only temporarily. An increase in aggregate demand increases real GDP by a multiple of the ...
... Output change that results from a change in aggregate demand is a permanent effect. A change in aggregate demand leads to a permanent change of higher output. An increase in aggregate demand increases real GDP only temporarily. An increase in aggregate demand increases real GDP by a multiple of the ...
Remarks by Governor Ben S. Bernanke At the meetings of the
... vice versa. In other words, if monetary policies are chosen optimally and the economic structure is held constant, there exists a long-run tradeoff between volatility in output and volatility in inflation. The ultimate source of this long-run tradeoff is the existence of shocks to aggregate supply. ...
... vice versa. In other words, if monetary policies are chosen optimally and the economic structure is held constant, there exists a long-run tradeoff between volatility in output and volatility in inflation. The ultimate source of this long-run tradeoff is the existence of shocks to aggregate supply. ...
Can Government Really Stabilize the Economy?
... find the money supply growth rate that is consistent with zero inflation? • In this view, inflation occurs when the annual rate of growth in the money supply exceeds the annual rate of growth of fullemployment real GDP. Gottheil - Principles of Economics, 4e © 2005 Thomson ...
... find the money supply growth rate that is consistent with zero inflation? • In this view, inflation occurs when the annual rate of growth in the money supply exceeds the annual rate of growth of fullemployment real GDP. Gottheil - Principles of Economics, 4e © 2005 Thomson ...
NBER WORKING PAPER SERIES RECENT DEVELOPMENTS IN MACROECONOMICS Working Paper No. 2473
... Fischer survey. The core of the survey Is contained in Section; III and IV 2Niltori Friedman's theoretical framework (1970) is close to the standard lS—L.M model; Brunner and Meltzer's (1976) basic analytic model is not dissimilar to Tobin'; (1969) three asset model. Friedman's view of the macroecon ...
... Fischer survey. The core of the survey Is contained in Section; III and IV 2Niltori Friedman's theoretical framework (1970) is close to the standard lS—L.M model; Brunner and Meltzer's (1976) basic analytic model is not dissimilar to Tobin'; (1969) three asset model. Friedman's view of the macroecon ...
LECTURE 7. Unemployment and Economic Growth
... wages. Monetary policy and fiscal policy can both be used to increase short-term growth in the economy, increasing the demand for labor and decreasing unemployment. However, the labor market is not 100% efficient: it does not clear, though it may be more efficient than bureaucracy. Some argue that m ...
... wages. Monetary policy and fiscal policy can both be used to increase short-term growth in the economy, increasing the demand for labor and decreasing unemployment. However, the labor market is not 100% efficient: it does not clear, though it may be more efficient than bureaucracy. Some argue that m ...
Chapter 12
... 4. The aggregate demand curve still shifts right. Due to the shape of the AS curve, however, now both the price level and level of real GDP increase, from P to P' and from Y to Y'. The last three questions reveal the crucial role played by the shape of the aggregate supply curve: Notice how the res ...
... 4. The aggregate demand curve still shifts right. Due to the shape of the AS curve, however, now both the price level and level of real GDP increase, from P to P' and from Y to Y'. The last three questions reveal the crucial role played by the shape of the aggregate supply curve: Notice how the res ...
MPDD W P
... of the highest percentages, which has been consistently increasing; the Bangladesh government spends the least. The peak in 1988 is probably an error due to some kind of measurement change causing a break in many Bangladesh macroeconomic series at that time. The consumption ratios for most countries ...
... of the highest percentages, which has been consistently increasing; the Bangladesh government spends the least. The peak in 1988 is probably an error due to some kind of measurement change causing a break in many Bangladesh macroeconomic series at that time. The consumption ratios for most countries ...
Phillips curve
In economics, the Phillips curve is a historical inverse relationship between rates of unemployment and corresponding rates of inflation that result in an economy. Stated simply, decreased unemployment, (i.e., increased levels of employment) in an economy will correlate with higher rates of inflation.While there is a short run tradeoff between unemployment and inflation, it has not been observed in the long run. In 1968, Milton Friedman asserted that the Phillips Curve was only applicable in the short-run and that in the long-run, inflationary policies will not decrease unemployment. Friedman then correctly predicted that, in the upcoming years after 1968, both inflation and unemployment would increase. The long-run Phillips Curve is now seen as a vertical line at the natural rate of unemployment, where the rate of inflation has no effect on unemployment. Accordingly, the Phillips curve is now seen as too simplistic, with the unemployment rate supplanted by more accurate predictors of inflation based on velocity of money supply measures such as the MZM (""money zero maturity"") velocity, which is affected by unemployment in the short but not the long term.