Standard Shocks in the OECD Interlink Model
... required to bring about a reduction (increase) in the annual rate of inflation of 1 percentage point following a demand shock. The unemployment response of real wages measures the per cent change in real wages given a change in unemployment of 1 percentage point. The response of private consumption ...
... required to bring about a reduction (increase) in the annual rate of inflation of 1 percentage point following a demand shock. The unemployment response of real wages measures the per cent change in real wages given a change in unemployment of 1 percentage point. The response of private consumption ...
Does Redistribution Increase Output? The Centrality of Labor Supply
... paper hopes to inform usually have annual horizons, one model period corresponds to one calendar year. In what follows, we lay out a model that will provide the basis for the analytical results we derive. For the quantitative analysis, however, we will add further additional features that, for expos ...
... paper hopes to inform usually have annual horizons, one model period corresponds to one calendar year. In what follows, we lay out a model that will provide the basis for the analytical results we derive. For the quantitative analysis, however, we will add further additional features that, for expos ...
RQ_ANS
... In the country of Mainia, GDP consists of cranberries and maple syrup. In 2002, 50 units of cranberries are sold at $20 per unit, and 100 units of maple syrup are sold at $10 per unit. If the price of cranberries was $10 per unit and the price of maple syrup was $15.00 per unit in 2001, the base yea ...
... In the country of Mainia, GDP consists of cranberries and maple syrup. In 2002, 50 units of cranberries are sold at $20 per unit, and 100 units of maple syrup are sold at $10 per unit. If the price of cranberries was $10 per unit and the price of maple syrup was $15.00 per unit in 2001, the base yea ...
Fiscal policy, pricing frictions and monetary accommodation
... role of market frictions and institutions in determining the magnitude of output multipliers. Our work differs from the existing studies along a number of other dimensions. First, rather than focusing on consumption and investment responses, we study the dynamics of the real wage, real interest rate ...
... role of market frictions and institutions in determining the magnitude of output multipliers. Our work differs from the existing studies along a number of other dimensions. First, rather than focusing on consumption and investment responses, we study the dynamics of the real wage, real interest rate ...
Investment frictions and the relative price of investment goods in an
... In our model, we assume that international asset markets are incomplete.2 The asset market structure in the model is relatively standard in the literature. We assume that home residents are able to trade two nominal risk-less bonds denominated in the domestic and foreign currency. These bonds are is ...
... In our model, we assume that international asset markets are incomplete.2 The asset market structure in the model is relatively standard in the literature. We assume that home residents are able to trade two nominal risk-less bonds denominated in the domestic and foreign currency. These bonds are is ...
Chapter 9 - Cengage Learning
... markets clear and that information is close to perfect. In this case, the source of output fluctuations will come from ‘real’ factors which alter an economy’s production function – these are predominately technology or productivity shocks. • Nominal factors, which include price and money shocks, hav ...
... markets clear and that information is close to perfect. In this case, the source of output fluctuations will come from ‘real’ factors which alter an economy’s production function – these are predominately technology or productivity shocks. • Nominal factors, which include price and money shocks, hav ...
Foundations of Economic Analysis
... Inflation and Three Types of Averaging ..................................................................................................... 194 Measuring Inflation with a Price Index ...................................................................................................... 195 The CPI a ...
... Inflation and Three Types of Averaging ..................................................................................................... 194 Measuring Inflation with a Price Index ...................................................................................................... 195 The CPI a ...
Units 4 and 10 – Answers
... b. increases aggregate output and decreases the aggregate price level. c. decreases both aggregate output and the aggregate price level. d. increases both aggregate output and the aggregate price level. e. decreases aggregate output and increases the aggregate price level. ____ 48. If commodity pric ...
... b. increases aggregate output and decreases the aggregate price level. c. decreases both aggregate output and the aggregate price level. d. increases both aggregate output and the aggregate price level. e. decreases aggregate output and increases the aggregate price level. ____ 48. If commodity pric ...
Quarterly Estimates of Output
... Nominal GDP, as explained above, is the total value of the goods and services produced in an economy at current prices. As this value is affected not only by the level of economic activity but also by the change in prices, economists have long argued that estimates of GDP should be discounted for pr ...
... Nominal GDP, as explained above, is the total value of the goods and services produced in an economy at current prices. As this value is affected not only by the level of economic activity but also by the change in prices, economists have long argued that estimates of GDP should be discounted for pr ...
Economics of Money, Banking, and Fin. Markets, 10e (Mishkin
... B) The average price of goods and services in an economy is called the aggregate price level. C) The inflation rate is measured as the rate of change in the federal government budget deficit. D) The aggregate price level is measured as the rate of change in the inflation rate. Answer: B Ques Status: ...
... B) The average price of goods and services in an economy is called the aggregate price level. C) The inflation rate is measured as the rate of change in the federal government budget deficit. D) The aggregate price level is measured as the rate of change in the inflation rate. Answer: B Ques Status: ...
Chapter 21 Stabilization Policy with Backward
... wage. Hence the two parties would find it difficult to agree on the definition of the relevant price index, even if they agreed in principle on the desirability of indexation. In a similar way, an individual employer may be reluctant to offer full indexation of his employees’ wages to some general pric ...
... wage. Hence the two parties would find it difficult to agree on the definition of the relevant price index, even if they agreed in principle on the desirability of indexation. In a similar way, an individual employer may be reluctant to offer full indexation of his employees’ wages to some general pric ...
Working Paper 189 - An Empirical Investigation of the Taylor Curve
... successful monetary policy is at offsetting aggregate demand shock, the less likely that the inflation–output relationship was positive.5 The offsetting of aggregate demand shocks to make the inflation–output correlation to be close to zero or to become negative depends on how monetary authorities r ...
... successful monetary policy is at offsetting aggregate demand shock, the less likely that the inflation–output relationship was positive.5 The offsetting of aggregate demand shocks to make the inflation–output correlation to be close to zero or to become negative depends on how monetary authorities r ...
Cascading Failures in Production Networks
... to large, or granular, firms can have non-trivial effects on real GDP. The latter posits that shocks to highly-connected firms can have non-trivial effects on real GDP. In practice, both theories emphasize a firm or industry’s size, as measured by its share of sales, as being the relevant measure of ...
... to large, or granular, firms can have non-trivial effects on real GDP. The latter posits that shocks to highly-connected firms can have non-trivial effects on real GDP. In practice, both theories emphasize a firm or industry’s size, as measured by its share of sales, as being the relevant measure of ...
By How Much Does GDP Rise If the Government Buys More Output?
... the government purchases enter preferences in a separable fashion: they do not affect households’ marginal rate of substitution between consumption and work or between consumption this year and in any future year. Military spending is the obvious example. If instead the government provided consumers ...
... the government purchases enter preferences in a separable fashion: they do not affect households’ marginal rate of substitution between consumption and work or between consumption this year and in any future year. Military spending is the obvious example. If instead the government provided consumers ...
A Dynamic Model of Aggregate Demand and Aggregate Supply
... • The dynamic model of aggregate demand and aggregate supply (DAD-DAS) gives us more insight into how the economy behaves in the short run. • This theory determines both real GDP (Y) and the inflation rate (π) • This theory is dynamic in the sense that the outcome in one period affects the outcome i ...
... • The dynamic model of aggregate demand and aggregate supply (DAD-DAS) gives us more insight into how the economy behaves in the short run. • This theory determines both real GDP (Y) and the inflation rate (π) • This theory is dynamic in the sense that the outcome in one period affects the outcome i ...
Endogenous Wage Indexation and Aggregate
... The seminal contributions of Gray (1976) and Fischer (1977) set the benchmark in the wage indexation literature. Using an aggregate loss function criterion, they find that the optimal aggregate indexation increases when supply-side shocks become more important in explaining output fluctuations (rela ...
... The seminal contributions of Gray (1976) and Fischer (1977) set the benchmark in the wage indexation literature. Using an aggregate loss function criterion, they find that the optimal aggregate indexation increases when supply-side shocks become more important in explaining output fluctuations (rela ...
aggregate demand and aggregate supply
... unemployment and inflation has been absent—high unemployment has coexisted with a rapidly rising price level—stagflation has been the outcome. Thus during 1971–76 inflation increased from 4.5 to 16.8 per cent and unemployment simultaneously rose from 1.4 to 4.6 per cent! Of course, our economy has a ...
... unemployment and inflation has been absent—high unemployment has coexisted with a rapidly rising price level—stagflation has been the outcome. Thus during 1971–76 inflation increased from 4.5 to 16.8 per cent and unemployment simultaneously rose from 1.4 to 4.6 per cent! Of course, our economy has a ...
Money Still Matters
... A number of social institutions arise to minimize these costs. The appearance of middlemen, for example, helps to facilitate a central meeting place for exchange. This emergence of organized markets helps to economize on information costs associated with strict barter. In addition, competition amon ...
... A number of social institutions arise to minimize these costs. The appearance of middlemen, for example, helps to facilitate a central meeting place for exchange. This emergence of organized markets helps to economize on information costs associated with strict barter. In addition, competition amon ...
1 Principles of Macroeconomics, 9e
... 24) Coal is used as a source of energy in many manufacturing processes. Assume a long strike by coal miners reduced the supply of coal and increased the price of coal. This would cause A) the short-run aggregate supply curve to shift to the right. B) the short-run aggregate supply curve to become fl ...
... 24) Coal is used as a source of energy in many manufacturing processes. Assume a long strike by coal miners reduced the supply of coal and increased the price of coal. This would cause A) the short-run aggregate supply curve to shift to the right. B) the short-run aggregate supply curve to become fl ...
University of Lethbridge — Department of Economics
... 9) An increase in the price level due to an increase in the price of oil A) leads to an increase in the money wage rate. B) creates stagflation in the short-run and will trigger a cost-push inflation. C) increases output above potential GDP. D) leads to a decrease in the money wage rate. E) creates ...
... 9) An increase in the price level due to an increase in the price of oil A) leads to an increase in the money wage rate. B) creates stagflation in the short-run and will trigger a cost-push inflation. C) increases output above potential GDP. D) leads to a decrease in the money wage rate. E) creates ...
Chapter 9 Aggregate Demand and Aggregate Supply
... an expansion. And during an expansion, unemployment falls. The increase in goods and services being produced and the reduction in unemployment are both good things. Second, what happens to prices (the GDP Deflator) if aggregate demand rises. As you can see, they rise. A rise in prices is, of course, ...
... an expansion. And during an expansion, unemployment falls. The increase in goods and services being produced and the reduction in unemployment are both good things. Second, what happens to prices (the GDP Deflator) if aggregate demand rises. As you can see, they rise. A rise in prices is, of course, ...
Objectives for Chapter 9 Aggregate Demand and Aggregate Supply
... an expansion. And during an expansion, unemployment falls. The increase in goods and services being produced and the reduction in unemployment are both good things. Second, what happens to prices (the GDP Deflator) if aggregate demand rises. As you can see, they rise. A rise in prices is, of course, ...
... an expansion. And during an expansion, unemployment falls. The increase in goods and services being produced and the reduction in unemployment are both good things. Second, what happens to prices (the GDP Deflator) if aggregate demand rises. As you can see, they rise. A rise in prices is, of course, ...
This PDF is a selection from an out-of-print volume from... of Economic Research
... The second question concerns the way the shocks lead to large fluctuations. Are fluctuations in economic activity caused by an accumulation of small shocks, where each shock is unimportant if viewed in isolation, or are fluctuations due to infrequent large shocks? The first view derives theoretical ...
... The second question concerns the way the shocks lead to large fluctuations. Are fluctuations in economic activity caused by an accumulation of small shocks, where each shock is unimportant if viewed in isolation, or are fluctuations due to infrequent large shocks? The first view derives theoretical ...