NBER WORKING PAPER SERIES COORDINATION, FAIR TREATMENT AND INFLATION PERSISTENCE Steinar Holden
... coordination problems arising from the existence of a range of equilibrium output levels. In most existing price (or wage) setting models, while comparisons with other price setters are important to the individual price setter, these comparisons generate persistence in the level, but not the growth ...
... coordination problems arising from the existence of a range of equilibrium output levels. In most existing price (or wage) setting models, while comparisons with other price setters are important to the individual price setter, these comparisons generate persistence in the level, but not the growth ...
Macroeconomic Analysis Econ 6022
... affect the FE line, since they don’t affect equilibrium employment - A change in productivity does affect the FE line, since it affects labor demand ...
... affect the FE line, since they don’t affect equilibrium employment - A change in productivity does affect the FE line, since it affects labor demand ...
interest rates
... – Recognition Lag: Takes time for policy makers to realize there is a problem with the economy – Administrative Lag: Takes time for a policy to be implemented – Impact lag: Takes time for a policy to have an effect. • Non-activists ague these lags will cause bigger ...
... – Recognition Lag: Takes time for policy makers to realize there is a problem with the economy – Administrative Lag: Takes time for a policy to be implemented – Impact lag: Takes time for a policy to have an effect. • Non-activists ague these lags will cause bigger ...
3 Macroeconomics LESSON 4 s ACTIVITY 24
... had a horizontal SRAS curve? A positively sloped SRAS curve? A vertical SRAS curve? With a horizontal SRAS curve, an increase in AD results in an increase in real GDP and no change in the price level. With a positively sloped SRAS curve, an increase in AD results in increases in real GDP and the pri ...
... had a horizontal SRAS curve? A positively sloped SRAS curve? A vertical SRAS curve? With a horizontal SRAS curve, an increase in AD results in an increase in real GDP and no change in the price level. With a positively sloped SRAS curve, an increase in AD results in increases in real GDP and the pri ...
Lecture 20 Keynesian Model and Policy Analysis
... Long-run Effect of Increase in Money Supply: Money is neutral in the long-run. ...
... Long-run Effect of Increase in Money Supply: Money is neutral in the long-run. ...
This PDF is a selec on from a published volume... Bureau of Economic Research
... • The Kennedy administration had wage and price “guideposts” that were meant to keep inflation in check. Similarly, Britain pursued an “incomes policy” during the early 1960s. Hence, the nonmonetary approach to inflation control has earlier antecedents than is clear from the authors’ narrative, and ...
... • The Kennedy administration had wage and price “guideposts” that were meant to keep inflation in check. Similarly, Britain pursued an “incomes policy” during the early 1960s. Hence, the nonmonetary approach to inflation control has earlier antecedents than is clear from the authors’ narrative, and ...
NBER WORKING PAPER SERIES HAS GLOBALIZATION CHANGED INFLATION? Laurence M. Ball
... Trade hasn’t changed enough to produce big ...
... Trade hasn’t changed enough to produce big ...
Lecture 12 - Har Wai Mun
... Changes in Equilibrium: Policy Effectiveness & Inflation • Shift in AD or AS due to fiscal or monetary policy causes changes in equilibrium. • However, the effectiveness of respective policies depends on the slope of the AD curve or (especially) AS curve • Price level increase implied inflation • In ...
... Changes in Equilibrium: Policy Effectiveness & Inflation • Shift in AD or AS due to fiscal or monetary policy causes changes in equilibrium. • However, the effectiveness of respective policies depends on the slope of the AD curve or (especially) AS curve • Price level increase implied inflation • In ...
Unit Two - WordPress.com
... • 9. Prices of the market basket increase as real wages remain stagnate. Would GDP fall or rise as a result if there is ceteris paribus in all other aspects of the economy? ...
... • 9. Prices of the market basket increase as real wages remain stagnate. Would GDP fall or rise as a result if there is ceteris paribus in all other aspects of the economy? ...
Money
... E.g. investment into education (HHs), new production capacities (firm) When expecting higher price, people tend to buy now and sell later + lower production Further reinforces inflationary pressures Social tensions: people feel that they are being cheated The common opinion is that if there is a dec ...
... E.g. investment into education (HHs), new production capacities (firm) When expecting higher price, people tend to buy now and sell later + lower production Further reinforces inflationary pressures Social tensions: people feel that they are being cheated The common opinion is that if there is a dec ...
Inflation Fisher theory (Quantity Theory of Money)
... Firms also incur menu costs due to high rate of inflation. These are the cost which involved in changing prices. For example, catalogues, price tags, advertisement all have to be changed. This additional cost may not be expected and in certain cases even it is not the part of the budget. Usually fir ...
... Firms also incur menu costs due to high rate of inflation. These are the cost which involved in changing prices. For example, catalogues, price tags, advertisement all have to be changed. This additional cost may not be expected and in certain cases even it is not the part of the budget. Usually fir ...
Keynes`s relevance in the new millennium
... regarded as amounting to the same thing) they are both quite different in detail and also, maybe, in plausibility. If, in eqn. 6, we replace the current inflation rate, t, with the expected inflation rate, e, then we have the Lucas ‘surprise’ aggregate supply curve. In this reasoning, agents expec ...
... regarded as amounting to the same thing) they are both quite different in detail and also, maybe, in plausibility. If, in eqn. 6, we replace the current inflation rate, t, with the expected inflation rate, e, then we have the Lucas ‘surprise’ aggregate supply curve. In this reasoning, agents expec ...
The CBPP Full Employment Project: Overview
... econometricians measured the extent of this imprecision, they found a 95 percent confidence interval around NAIRU estimates that included values of less than 4 percent and more than 8 percent. In addition, the correlation noted above between price growth and unemployment has diminished over time, me ...
... econometricians measured the extent of this imprecision, they found a 95 percent confidence interval around NAIRU estimates that included values of less than 4 percent and more than 8 percent. In addition, the correlation noted above between price growth and unemployment has diminished over time, me ...
Worker Insecurity and US Macroeconomic Performance
... Where w is the rate of growth of nominal wages, p and p are the actual and expected rates of inflation respectively, q is the rate of growth of productivity, a is a distributed lag of past rates of growth of the real wage, and τ represents the rate of growth of the gross markup (the ratio of price t ...
... Where w is the rate of growth of nominal wages, p and p are the actual and expected rates of inflation respectively, q is the rate of growth of productivity, a is a distributed lag of past rates of growth of the real wage, and τ represents the rate of growth of the gross markup (the ratio of price t ...
represented as a natural log. Hibbs and Dennis find that this
... economics: stimulate demand. (called “demand side” fiscal policy) a. In terms of “academics,” the role for government means that conservatives won’t like keynesian economics and will lead an intellectual attack against. 1. That “attack,” and the response to it, has been much of the major emphasis of ...
... economics: stimulate demand. (called “demand side” fiscal policy) a. In terms of “academics,” the role for government means that conservatives won’t like keynesian economics and will lead an intellectual attack against. 1. That “attack,” and the response to it, has been much of the major emphasis of ...
The Federal Reserve`s "Dual Mandate": The Evolution of an Idea
... the other, and currently most Americans, understandably, seem more concerned about the high rate of unemployment than inflation. To be sure, unemployment is a significant problem—one that affects millions of struggling American families—and the Fed must continue to be mindful of unemployment when ma ...
... the other, and currently most Americans, understandably, seem more concerned about the high rate of unemployment than inflation. To be sure, unemployment is a significant problem—one that affects millions of struggling American families—and the Fed must continue to be mindful of unemployment when ma ...
E719_No08_Chapter09
... that desired spending is equal to output, or desired saving is equal to desired investment We will now derive the LM curve, which plots income-interest rate pairs such that the quantity of money demanded is equal to the quantity of money supplied. ...
... that desired spending is equal to output, or desired saving is equal to desired investment We will now derive the LM curve, which plots income-interest rate pairs such that the quantity of money demanded is equal to the quantity of money supplied. ...
The long-run aggregate supply curve is perfectly vertical
... The long-run aggregate supply curve can be shifted, when the factors of production change in quantity. For example, if there is an increase in the number of available workers or labor hours in the long run, the aggregate supply curve will shift outward (it is assumed the labor market is always in eq ...
... The long-run aggregate supply curve can be shifted, when the factors of production change in quantity. For example, if there is an increase in the number of available workers or labor hours in the long run, the aggregate supply curve will shift outward (it is assumed the labor market is always in eq ...
NBER WORKING PAPER SERIES STICKY INFORMATION: N. Gregory Mankiw
... taken to be a quarter, then λ=0.25 means that wage setters update their information on average once a year. These parameter values strike us as plausible, and we will use them only for the purposes of illustration. In a later section, we use the time-series data to estimate λ, the key parameter mea ...
... taken to be a quarter, then λ=0.25 means that wage setters update their information on average once a year. These parameter values strike us as plausible, and we will use them only for the purposes of illustration. In a later section, we use the time-series data to estimate λ, the key parameter mea ...
Homework 4, Due in class Wednesday August 28 at 12:10 - uc
... e) Assume that G is back at its original level of 1000, but (M/P)s increases by 200. By how much will Y increase in the short-run equilibrium? Illustrate this with a graph of the IS-LM curves. What is happening to investment here? 2) True-False: Say if the following statements are True or False. If ...
... e) Assume that G is back at its original level of 1000, but (M/P)s increases by 200. By how much will Y increase in the short-run equilibrium? Illustrate this with a graph of the IS-LM curves. What is happening to investment here? 2) True-False: Say if the following statements are True or False. If ...
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.