What Have We Learned since October 1979?
... Higher productivity growth, by itself, does not lead to an ever-decreasing NAIRU. But favorable supply shocks and the related hypothesis that actual productivity was running ahead faster than productivity as perceived by workers will lead to a decline in NAIRU. On the later, see Blinder and Yellen ( ...
... Higher productivity growth, by itself, does not lead to an ever-decreasing NAIRU. But favorable supply shocks and the related hypothesis that actual productivity was running ahead faster than productivity as perceived by workers will lead to a decline in NAIRU. On the later, see Blinder and Yellen ( ...
Aggregate Supply Under Price Rigidity
... producer has to offer a higher wage not only to that (marginal) hour but also to all the (inra-marginal) existing hours. Equilibrium employment occurs at a point where the marginal factor costs is equal to the marginal productivity. Equilibrium wage is shown at point B, with the worker'’ real wage m ...
... producer has to offer a higher wage not only to that (marginal) hour but also to all the (inra-marginal) existing hours. Equilibrium employment occurs at a point where the marginal factor costs is equal to the marginal productivity. Equilibrium wage is shown at point B, with the worker'’ real wage m ...
XIV. Current issues in economic policy
... • Targeting CPI and assumption of causal link: growth of money supply → CPI – CPI accurately reflects money supply (?) – In case of exogenous shock (e.g. oil or food price shock) → sharp increase of CPI possible, but no relation to domestic economic events → Central Banks acts against inflation → ne ...
... • Targeting CPI and assumption of causal link: growth of money supply → CPI – CPI accurately reflects money supply (?) – In case of exogenous shock (e.g. oil or food price shock) → sharp increase of CPI possible, but no relation to domestic economic events → Central Banks acts against inflation → ne ...
The Job Drought?
... officially ended, the productivity of American workers — those lucky enough to have jobs — has risen smartly. • But the United States still has two million fewer jobs than before the downturn, • the unemployment rate is stuck at levels not seen since the early 1990s • and the proportion of adults wh ...
... officially ended, the productivity of American workers — those lucky enough to have jobs — has risen smartly. • But the United States still has two million fewer jobs than before the downturn, • the unemployment rate is stuck at levels not seen since the early 1990s • and the proportion of adults wh ...
Principles of Macroeconomics
... I. Supply of money and aggregate supply of output: money market events affect demand for output, but supply. J. Supply and demand in micro, vs. aggregate supply and aggregate demand in macro: individual market, individual price and real relative price, vs. aggregate output and pricelevel, which incl ...
... I. Supply of money and aggregate supply of output: money market events affect demand for output, but supply. J. Supply and demand in micro, vs. aggregate supply and aggregate demand in macro: individual market, individual price and real relative price, vs. aggregate output and pricelevel, which incl ...
Asset Prices, the Real Exchange Rate, and Unemployment in a
... unchanged at given pN.) We can write the demand wage as a decreasing function of 1 – u, given pN, that is, vd = Vd(1-u; pN), Vd1-u<0. Equating Vs(1-u; yw ) to Vd(1-u; pN), we can simply write 1-u = μ( pN; yw), with 1-u increasing in pN, given yw. ...
... unchanged at given pN.) We can write the demand wage as a decreasing function of 1 – u, given pN, that is, vd = Vd(1-u; pN), Vd1-u<0. Equating Vs(1-u; yw ) to Vd(1-u; pN), we can simply write 1-u = μ( pN; yw), with 1-u increasing in pN, given yw. ...
ECON 2020 – 200 Spring 2003 Homework #10: Chapter 14
... 7. Which of the following statements is true regarding the LRAS curve? The LRAS curve a. shifts left when the natural rate of unemployment falls. b. is vertical because an equal change in all nominal prices and wages leaves output unaffected. c. is positively sloped because price expectations and wa ...
... 7. Which of the following statements is true regarding the LRAS curve? The LRAS curve a. shifts left when the natural rate of unemployment falls. b. is vertical because an equal change in all nominal prices and wages leaves output unaffected. c. is positively sloped because price expectations and wa ...
Page 1 Econ 303: Intermediate Macroeconomics I Dr. Sauer Sample
... 32. If the equation for a country's Phillips curve is π =.02 - .8(u - .05), where π is the rate of inflation and u is the unemployment rate, what is the short-run inflation rate when unemployment is 4 percent (.04)? A) above 2 percent (.02) B) below 2 percent (.02) C) 2 percent (.02) D) -2 percent ...
... 32. If the equation for a country's Phillips curve is π =.02 - .8(u - .05), where π is the rate of inflation and u is the unemployment rate, what is the short-run inflation rate when unemployment is 4 percent (.04)? A) above 2 percent (.02) B) below 2 percent (.02) C) 2 percent (.02) D) -2 percent ...
AP review wk 3
... – Results when there are more people seeking jobs in a labor market than there are jobs available at the current wage rate. – Occurs when the wage rate is, for some reason, persistently above equilibrium. ...
... – Results when there are more people seeking jobs in a labor market than there are jobs available at the current wage rate. – Occurs when the wage rate is, for some reason, persistently above equilibrium. ...
Document
... Analysis of the growth rate of aggregate output must use real GDP because doing so eliminates any change in the value of aggregate output due solely to price changes. Real GDP per capita is a measure of average aggregate output per person, but is not in itself an appropriate policy goal. ...
... Analysis of the growth rate of aggregate output must use real GDP because doing so eliminates any change in the value of aggregate output due solely to price changes. Real GDP per capita is a measure of average aggregate output per person, but is not in itself an appropriate policy goal. ...
Module Types of Inflation, Disinflation, and Deflation
... • Demand-pull inflation: caused by an increase in AD. This is likely to be caused by economic growth that is coupled with either expansionary fiscal or monetary policy. • In the case of fiscal policy, politicians can sometimes boost their election possibilities by cutting taxes even if the economy ...
... • Demand-pull inflation: caused by an increase in AD. This is likely to be caused by economic growth that is coupled with either expansionary fiscal or monetary policy. • In the case of fiscal policy, politicians can sometimes boost their election possibilities by cutting taxes even if the economy ...
Summer B 2015 Practice Test #3 - MDC Faculty Web Pages
... B) increase; weaker; higher C) increase; stronger; lower D) decrease; weaker; lower ...
... B) increase; weaker; higher C) increase; stronger; lower D) decrease; weaker; lower ...
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? ...
The Business Cycle and Unemployment
... Imagine that you now work full-time during the day. You meet several people in your class and find that they are earning much more than you are. So you know that jobs exist that are better than yours. What do you do? Probably, you quit your job and devote your time to finding a better job. You quit ...
... Imagine that you now work full-time during the day. You meet several people in your class and find that they are earning much more than you are. So you know that jobs exist that are better than yours. What do you do? Probably, you quit your job and devote your time to finding a better job. You quit ...
Objectives for Class 24: The Business Cycle and
... Imagine that you now work full-time during the day. You meet several people in your class and find that they are earning much more than you are. So you know that jobs exist that are better than yours. What do you do? Probably, you quit your job and devote your time to finding a better job. You quit ...
... Imagine that you now work full-time during the day. You meet several people in your class and find that they are earning much more than you are. So you know that jobs exist that are better than yours. What do you do? Probably, you quit your job and devote your time to finding a better job. You quit ...
Panel on: “Behavioral Economics and Economic Policy in the Past... Federal Reserve Bank of Boston Conference: “Implications of Behavioral...
... on average since the mid-1990s, then downward nominal wage rigidity becomes a less important issue.9 Behavioral considerations thus point to the possibility of a long-run tradeoff between inflation and unemployment at very low inflation rates. Downward nominal wage rigidity, as well as downward rea ...
... on average since the mid-1990s, then downward nominal wage rigidity becomes a less important issue.9 Behavioral considerations thus point to the possibility of a long-run tradeoff between inflation and unemployment at very low inflation rates. Downward nominal wage rigidity, as well as downward rea ...
Quiz #3 - Christopher R. Zapalski
... 29. In an aggregate demand and aggregate supply graph, a contractionary fiscal policy can be illustrated by a: A. leftward shift in the aggregate demand curve. B. rightward shift in the aggregate demand curve. C. rightward shift in the aggregate supply curve. D. movement along an existing aggregate ...
... 29. In an aggregate demand and aggregate supply graph, a contractionary fiscal policy can be illustrated by a: A. leftward shift in the aggregate demand curve. B. rightward shift in the aggregate demand curve. C. rightward shift in the aggregate supply curve. D. movement along an existing aggregate ...
Kevin P. Hoover THE RATIONAL EXPECTATIONS REVOLUTION: AN ASSESSMENT
... who continue to ask the same serious questions about making and using short-run economic forecasts and about the short-run effects ...
... who continue to ask the same serious questions about making and using short-run economic forecasts and about the short-run effects ...
Aggregate Supply and Aggregate Demand
... A rise in the price level with no change in the money wage rate and other factor prices increases the quantity of real GDP supplied. ...
... A rise in the price level with no change in the money wage rate and other factor prices increases the quantity of real GDP supplied. ...
Economic 157b - Yale University
... in economic activity, money income, and prices. The interaction between monetary and economic change has been highly stable. Monetary changes have often had an independent origin; they have not been simply a reflection of economic activity.” (p. 676) • We can interpret this as a constant velocity of ...
... in economic activity, money income, and prices. The interaction between monetary and economic change has been highly stable. Monetary changes have often had an independent origin; they have not been simply a reflection of economic activity.” (p. 676) • We can interpret this as a constant velocity of ...
Chapter 9 Buffer stocks and price stability
... The question that arises is whether using a persistent pool of unemployed (or casualised underemployed) is the most cost effective way to achieve price stability? The ...
... The question that arises is whether using a persistent pool of unemployed (or casualised underemployed) is the most cost effective way to achieve price stability? The ...
Full employment
Full employment, in macroeconomics, is the level of employment rates where there is no cyclical or deficient-demand unemployment. It is defined by the majority of mainstream economists as being an acceptable level of unemployment somewhere above 0%. The discrepancy from 0% arises due to non-cyclical types of unemployment, such as frictional unemployment (there will always be people who have quit or have lost a seasonal job and are in the process of getting a new job) and structural unemployment (mismatch between worker skills and job requirements). Unemployment above 0% is seen as necessary to control inflation in capitalist economies, to keep inflation from accelerating, i.e., from rising from year to year. This view is based on a theory centering on the concept of the Non-Accelerating Inflation Rate of Unemployment (NAIRU); in the current era, the majority of mainstream economists mean NAIRU when speaking of ""full"" employment. The NAIRU has also been described by Milton Friedman, among others, as the ""natural"" rate of unemployment. Having many names, it has also been called the structural unemployment rate.The 20th century British economist William Beveridge stated that an unemployment rate of 3% was full employment. Other economists have provided estimates between 2% and 13%, depending on the country, time period, and their political biases. For the United States, economist William T. Dickens found that full-employment unemployment rate varied a lot over time but equaled about 5.5 percent of the civilian labor force during the 2000s. Recently, economists have emphasized the idea that full employment represents a ""range"" of possible unemployment rates. For example, in 1999, in the United States, the Organisation for Economic Co-operation and Development (OECD) gives an estimate of the ""full-employment unemployment rate"" of 4 to 6.4%. This is the estimated unemployment rate at full employment, plus & minus the standard error of the estimate.The concept of full employment of labor corresponds to the concept of potential output or potential real GDP and the long run aggregate supply (LRAS) curve. In neoclassical macroeconomics, the highest sustainable level of aggregate real GDP or ""potential"" is seen as corresponding to a vertical LRAS curve: any increase in the demand for real GDP can only lead to rising prices in the long run, while any increase in output is temporary.