MS-WORD - Department of Economics
... debating whether they were and are exogenous to the economy, or in fact truly endogenous factors within the economy. (6) I suppose that most true monetarists would adhere to the first view, namely that monetary forces are exogenous (outside the economy). iii) It is my firm conviction, however -- as ...
... debating whether they were and are exogenous to the economy, or in fact truly endogenous factors within the economy. (6) I suppose that most true monetarists would adhere to the first view, namely that monetary forces are exogenous (outside the economy). iii) It is my firm conviction, however -- as ...
Document
... The initial short run supply curve for the expected price level of 130 is SRAS130 Given this short-run aggregate supply curve, the equilibrium price level and real GDP depend on the aggregate demand curve. The actual price level will equal the expected price level only if the aggregate demand curve ...
... The initial short run supply curve for the expected price level of 130 is SRAS130 Given this short-run aggregate supply curve, the equilibrium price level and real GDP depend on the aggregate demand curve. The actual price level will equal the expected price level only if the aggregate demand curve ...
32.1 the short-run phillips curve
... 32.2 SHORT-RUN AND LONG-RUN ... But if aggregate demand increases to AD2 and aggregate supply changes to AS2, the price level rises by 7 percent to 107. In both cases, real GDP remains at $10 trillion, and because the economy is at full employment, unemployment remains at the natural unemployment r ...
... 32.2 SHORT-RUN AND LONG-RUN ... But if aggregate demand increases to AD2 and aggregate supply changes to AS2, the price level rises by 7 percent to 107. In both cases, real GDP remains at $10 trillion, and because the economy is at full employment, unemployment remains at the natural unemployment r ...
Inflation Targeting and Inflation Prospects in Canada
... – Friedman and Phelps argued that no long-run trade-off existed – the 1970s and the “Great Inflation” proved them right!! • there is evidence that suggests that higher inflation would lead to higher unemployment ...
... – Friedman and Phelps argued that no long-run trade-off existed – the 1970s and the “Great Inflation” proved them right!! • there is evidence that suggests that higher inflation would lead to higher unemployment ...
... rate will rise if the 11If the shock is Harrod neutral, the unemployment elasticity of subsitution exceeds one and fall if the elasticity is less than the one. The intuition is as follows. If the elasticity of subtitutiOfl is one, share of labor is constant. The real wage should fall by exactly the ...
Page 277
... As their name implies, according to Monetarist economists, a change in economic behavior requires a change in the money supply. So let us begin our explanation by assuming that there is an increase in the money supply. The Federal Reserve buys Treasury Securities in the open market. As a result, wha ...
... As their name implies, according to Monetarist economists, a change in economic behavior requires a change in the money supply. So let us begin our explanation by assuming that there is an increase in the money supply. The Federal Reserve buys Treasury Securities in the open market. As a result, wha ...
The aggregate demand curve
... and the planned aggregate purchase of variable inputs (IE). But we are going to focus only on the planned aggregate purchase of capital goods (capital investment spending). ...
... and the planned aggregate purchase of variable inputs (IE). But we are going to focus only on the planned aggregate purchase of capital goods (capital investment spending). ...
Chapter 27 The Phillips Curve and Expectations Theory 1. The
... b. demonstrates how to achieve stable economic growth. c. shows the trade-off between deficits and inflation. d. helps to stimulate entrepreneurial profits. ANS a. Correct. The Phillips curve was relatively well-defined during the 1960s. b. Incorrect. The Phillips curve does not explain economic gro ...
... b. demonstrates how to achieve stable economic growth. c. shows the trade-off between deficits and inflation. d. helps to stimulate entrepreneurial profits. ANS a. Correct. The Phillips curve was relatively well-defined during the 1960s. b. Incorrect. The Phillips curve does not explain economic gro ...
NBER WORKING PAPER SERIES Laurence Ball N. thegory Manldw Working Paper No. 4677
... Viemam War. As we discuss below, sticky prices can also play a central role in explaining the effects of aggregate-supply shocks, such as large changes in oil prices. Purely real models ...
... Viemam War. As we discuss below, sticky prices can also play a central role in explaining the effects of aggregate-supply shocks, such as large changes in oil prices. Purely real models ...
SERIES
... In late 1979, Turkeystood in the throes of a foreign exchange crisis. with widespread shortages, negative growth, and inflation into triple digits. A decade later, Turkey has a comfortable balance-of-payments situation, and sits atop considerable foreign exchange reserves. The economy has achieved a ...
... In late 1979, Turkeystood in the throes of a foreign exchange crisis. with widespread shortages, negative growth, and inflation into triple digits. A decade later, Turkey has a comfortable balance-of-payments situation, and sits atop considerable foreign exchange reserves. The economy has achieved a ...
College of Business and Economics
... In NC world, permanent changes in GNP growth cannot occur from monetary shocks since money is neutral; therefore main forces causing instability must be real shocks. If shocks to productivity growth are frequent and random, path of Y follows a random walk that resembles the business cycle. No distin ...
... In NC world, permanent changes in GNP growth cannot occur from monetary shocks since money is neutral; therefore main forces causing instability must be real shocks. If shocks to productivity growth are frequent and random, path of Y follows a random walk that resembles the business cycle. No distin ...
Advances in Environmental Biology
... inflation will appear. This theory is one of Keynesian inflation theories which describes Phillips downward curve and indicates a negative relationship between inflation and unemployment. Cost-push inflation theory is another inflation Keynesian theory which knows the reason of inflation in increase ...
... inflation will appear. This theory is one of Keynesian inflation theories which describes Phillips downward curve and indicates a negative relationship between inflation and unemployment. Cost-push inflation theory is another inflation Keynesian theory which knows the reason of inflation in increase ...
Inflation, Disinflation, and Deflation in China: Identifying the Shocks
... importance of aggregate demand versus aggregate supply factors. We follow the usual approach of estimating small order vector autoregressions (VARs). However, in view of the uncertainty surrounding the sources of economic shocks, this paper compares results from three sets of alternative identificat ...
... importance of aggregate demand versus aggregate supply factors. We follow the usual approach of estimating small order vector autoregressions (VARs). However, in view of the uncertainty surrounding the sources of economic shocks, this paper compares results from three sets of alternative identificat ...
On the sources of macroeconomic stability
... in different countries. In the United States, for example, the Great Moderation is usually dated from around 1984. Macroeconomic conditions in the United Kingdom became more stable after 1992. But monetary policy makers have been at pains to stress that a continuation of such ‘nice’ (Non-Inflationar ...
... in different countries. In the United States, for example, the Great Moderation is usually dated from around 1984. Macroeconomic conditions in the United Kingdom became more stable after 1992. But monetary policy makers have been at pains to stress that a continuation of such ‘nice’ (Non-Inflationar ...
Stabilisation policy under Romer IS-MP-IA
... Firstly, we have to clarify that there are to types of supply-side shocks that the economy faces: • Inflation shocks ε t — shocks to price-setting • Supply shocks — shocks to y N ...
... Firstly, we have to clarify that there are to types of supply-side shocks that the economy faces: • Inflation shocks ε t — shocks to price-setting • Supply shocks — shocks to y N ...
Chapter 33
... • P↓ causes the real burden of the monetary debts of debtors ↑ • This causes debtors’ consumption ↓ • Therefore, if the decrease in debtors’ consumption exceeds the increase in the consumption of others, it is possible that C ↓ • Therefore, P↓ could cause aggregate demand (C+I+G+NX) ↓ • For this rea ...
... • P↓ causes the real burden of the monetary debts of debtors ↑ • This causes debtors’ consumption ↓ • Therefore, if the decrease in debtors’ consumption exceeds the increase in the consumption of others, it is possible that C ↓ • Therefore, P↓ could cause aggregate demand (C+I+G+NX) ↓ • For this rea ...
Introduction
... or 3 percent) stable inflation is desirable. For example, this point of view is advocated by Lawrence Summers (1991). However, Alan Greenspan declares that his long-term monetary goal is stable prices and zero inflation.3 Nevertheless, very few countries with good macroeconomic dynamics show close t ...
... or 3 percent) stable inflation is desirable. For example, this point of view is advocated by Lawrence Summers (1991). However, Alan Greenspan declares that his long-term monetary goal is stable prices and zero inflation.3 Nevertheless, very few countries with good macroeconomic dynamics show close t ...
Chapter 6
... remaining the same, decreases the quantity of real wealth (money, bonds, stocks, etc.). To restore their real wealth, people increase saving and decrease spending, so the quantity of real GDP demanded decreases. Similarly, a fall in the price level, other things remaining the same, increases the qua ...
... remaining the same, decreases the quantity of real wealth (money, bonds, stocks, etc.). To restore their real wealth, people increase saving and decrease spending, so the quantity of real GDP demanded decreases. Similarly, a fall in the price level, other things remaining the same, increases the qua ...
Money, Monetary Policy, and Transmission Mechanisms
... percentage response of prices to a change in money) is imposed on the relationship, since this is a strong theoretical requirement. For most definitions of broad money, two such vectors can be found, one of which corresponds to a stable long-run demand function. Overall, the results suggest that the ...
... percentage response of prices to a change in money) is imposed on the relationship, since this is a strong theoretical requirement. For most definitions of broad money, two such vectors can be found, one of which corresponds to a stable long-run demand function. Overall, the results suggest that the ...
Syllabus and Semester Specific Guidelines
... The purpose of this Macroeconomics course is to give you, the student, a thorough understanding of the principles of economics that apply to an economic system as a whole. I believe in this course, because during this semester, you will develop an understanding of how economic forces influence the U ...
... The purpose of this Macroeconomics course is to give you, the student, a thorough understanding of the principles of economics that apply to an economic system as a whole. I believe in this course, because during this semester, you will develop an understanding of how economic forces influence the U ...
Chapter 29 Aggregate Demand and Aggregate Supply
... A. explain why the aggregate demand curve is downsloping. B. explain shifts in the aggregate demand curve. C. demonstrate why real output and the price level are inversely related. D. include input prices and resource productivity. 7. Other things equal, if the national incomes of the major trading ...
... A. explain why the aggregate demand curve is downsloping. B. explain shifts in the aggregate demand curve. C. demonstrate why real output and the price level are inversely related. D. include input prices and resource productivity. 7. Other things equal, if the national incomes of the major trading ...