Mankiw 5/e Chapter 2: The Data of Macroeconomics
... • excluded from GDP deflator the basket of goods • CPI: fixed • GDP deflator: changes every year ...
... • excluded from GDP deflator the basket of goods • CPI: fixed • GDP deflator: changes every year ...
PDF - Federal Reserve Bank of San Francisco
... Finally, it affects the marginal cost of retail firms and generates a dispersion of relative prices. It is feasible for monetary policy to completely undo the distortions associated with sticky prices and replicate the flexible-price equilibrium. However, such a policy of price stability cannot ensur ...
... Finally, it affects the marginal cost of retail firms and generates a dispersion of relative prices. It is feasible for monetary policy to completely undo the distortions associated with sticky prices and replicate the flexible-price equilibrium. However, such a policy of price stability cannot ensur ...
The Macroeconomy in the Short-Run
... – In short-run: prices are sticky, economy moves from point A to point B – At point B: output and employment falls below natural levels and economy is in recession – Over time: wages and prices will fall in response to change in demand – There is a gradual movement in the economy to point C = the ne ...
... – In short-run: prices are sticky, economy moves from point A to point B – At point B: output and employment falls below natural levels and economy is in recession – Over time: wages and prices will fall in response to change in demand – There is a gradual movement in the economy to point C = the ne ...
Oil Price Volatility and US Macroeconomic Activity
... This specification is consistent with some transmission channels (e.g., Rasche and Tatom, 1977a,b; Baily, 1981; and Wei, 2003) through which oil shocks exert influence on macroeconomic activity.3 However, the effect can be also asymmetric: An oil price decrease may actually lower future GDP growth t ...
... This specification is consistent with some transmission channels (e.g., Rasche and Tatom, 1977a,b; Baily, 1981; and Wei, 2003) through which oil shocks exert influence on macroeconomic activity.3 However, the effect can be also asymmetric: An oil price decrease may actually lower future GDP growth t ...
Econ 102 Fall 2004
... consumption and investment spending, real GDP, and AD. c. Suppose the shift of AD described in part (b) is in the amount of $4 billion at every price level. What is the new AD curve? d. Find the price level and real GDP in the new short run equilibrium. Is the change in the real GDP greater or small ...
... consumption and investment spending, real GDP, and AD. c. Suppose the shift of AD described in part (b) is in the amount of $4 billion at every price level. What is the new AD curve? d. Find the price level and real GDP in the new short run equilibrium. Is the change in the real GDP greater or small ...
china`s agricultural trade - University of Hawaii at Manoa
... • A rise in the relative price of the labor-intensive good will shift the distribution of income in favor of labor: – The real wage of labor will rise in terms of both goods, while the real income of landowners will fall in terms of both goods. • The owners of a country’s abundant factors gain from ...
... • A rise in the relative price of the labor-intensive good will shift the distribution of income in favor of labor: – The real wage of labor will rise in terms of both goods, while the real income of landowners will fall in terms of both goods. • The owners of a country’s abundant factors gain from ...
AS - AD - Illinois State University
... • One story explaining the Great Depression is the stock market crash reduced consumer spending. The government then tried to boost the economy with increased spending. Show both changes on an AS-AD graph explaining changes in equilibrium prices and output. • Show how a change in the markup would af ...
... • One story explaining the Great Depression is the stock market crash reduced consumer spending. The government then tried to boost the economy with increased spending. Show both changes on an AS-AD graph explaining changes in equilibrium prices and output. • Show how a change in the markup would af ...
Question No: 2 ( M - 1 )
... The classical economists thought that the economy would quickly overcome any short run instability because: ► Price level and quantity are flexible. ► Prices would get stuck at a low level. ► The long run aggregate supply would shift to the left. ► Prices and wages are flexible. Ref by Syed Toqeer. ...
... The classical economists thought that the economy would quickly overcome any short run instability because: ► Price level and quantity are flexible. ► Prices would get stuck at a low level. ► The long run aggregate supply would shift to the left. ► Prices and wages are flexible. Ref by Syed Toqeer. ...
The Great Depression of 1946
... Dividing money GNP by the estimated deflator to get estimated real GNP, we get a rather different historical interpretation than what the government statistics, particularly the recent ones, suggest. Our scenario suggests output grew substantially during World War 11, but far less than the recent go ...
... Dividing money GNP by the estimated deflator to get estimated real GNP, we get a rather different historical interpretation than what the government statistics, particularly the recent ones, suggest. Our scenario suggests output grew substantially during World War 11, but far less than the recent go ...
NATIONAL BANK OF POLAND WORKING PAPER No. 152
... basket. They showed that the price index containing so called flexible prices co-move stronger with the domestic output gap than CPI and index containing prices classified by them as sticky. As a measure of cyclical changes in domestic economic activity they used a gap between real and natural rate ...
... basket. They showed that the price index containing so called flexible prices co-move stronger with the domestic output gap than CPI and index containing prices classified by them as sticky. As a measure of cyclical changes in domestic economic activity they used a gap between real and natural rate ...
NBER WORKING PAPER SERIES STICKY INFORMATION: N. Gregory Mankiw
... illustration. In a later section, we use the time-series data to estimate λ, the key parameter measuring the stickiness of information, and find that λ=0.25 fits the data well. Here we look at how this economy responds to a sudden change in regime. In the first case, we assume that the annual rate o ...
... illustration. In a later section, we use the time-series data to estimate λ, the key parameter measuring the stickiness of information, and find that λ=0.25 fits the data well. Here we look at how this economy responds to a sudden change in regime. In the first case, we assume that the annual rate o ...
UNDERLYING FACTORS OF PERSISTENT INFLATION IN ROMANIA
... generating higher wages and as a consequence the aggregate supply curve will quickly begin to shift leftward. As a result, a new equilibrium will occur with output returning at its natural level and prices being the only variable higher compared to the initial situation. Although the Keynesians do n ...
... generating higher wages and as a consequence the aggregate supply curve will quickly begin to shift leftward. As a result, a new equilibrium will occur with output returning at its natural level and prices being the only variable higher compared to the initial situation. Although the Keynesians do n ...
Unconventional Fiscal Policy at the Zero Bound
... Whether or not the first-best allocation can be implemented depends on the set of available instruments, and in particular on the existence of lump-sum taxes. In the simple New Keynesian model of Eggertsson (2009), where lump-sum taxes are allowed, we show that the first-best allocation can be imple ...
... Whether or not the first-best allocation can be implemented depends on the set of available instruments, and in particular on the existence of lump-sum taxes. In the simple New Keynesian model of Eggertsson (2009), where lump-sum taxes are allowed, we show that the first-best allocation can be imple ...
PDF
... adjustment program aimed at improving the competitiveness of the economy by removing distortions caused by price controls on food and other price rigidities, monopolies, overvalued exchange rate, and reducing public sector deficits and implementing market-friendly policies. For many third-world coun ...
... adjustment program aimed at improving the competitiveness of the economy by removing distortions caused by price controls on food and other price rigidities, monopolies, overvalued exchange rate, and reducing public sector deficits and implementing market-friendly policies. For many third-world coun ...
Measuring Macroeconomic Activity
... • What factors influence the spending behavior of the different sectors of the economy? • How do behavior changes in these sectors influence the level of output and income in the economy? • Can Policy Makers Maintain Stable Prices, Full Employment, and Adequate Economic Growth over Time? • How Do Fi ...
... • What factors influence the spending behavior of the different sectors of the economy? • How do behavior changes in these sectors influence the level of output and income in the economy? • Can Policy Makers Maintain Stable Prices, Full Employment, and Adequate Economic Growth over Time? • How Do Fi ...
Notes
... • Inflation occurs when money growth speeds ahead of output growth. The unbounded creation of fiat money leads to inflation which ultimately will make the money worthless. ...
... • Inflation occurs when money growth speeds ahead of output growth. The unbounded creation of fiat money leads to inflation which ultimately will make the money worthless. ...
Price Stability and the Long-Run Target for
... downwardly rigid. If nominal wages are rigid and the inflation rate is low, real wages (that is, wages relative to prices) may decline only very slowly following a decrease in the demand for labour. In the simple textbook model, the less real wages adjust, the more employment will decline with the d ...
... downwardly rigid. If nominal wages are rigid and the inflation rate is low, real wages (that is, wages relative to prices) may decline only very slowly following a decrease in the demand for labour. In the simple textbook model, the less real wages adjust, the more employment will decline with the d ...
aggregate supply (AS) curve
... Sustained Inflation as a Purely Monetary Phenomenon Virtually all economists agree that an increase in the price level can be caused by anything that causes the AD curve to shift to the right or the AS curve to shift to the left. It is also generally agreed that for a sustained inflation to occur, t ...
... Sustained Inflation as a Purely Monetary Phenomenon Virtually all economists agree that an increase in the price level can be caused by anything that causes the AD curve to shift to the right or the AS curve to shift to the left. It is also generally agreed that for a sustained inflation to occur, t ...
DP2013/03 Deep Habits, Price Rigidities and the Consumption Response to Government Spending
... labor to expand production. This in turn raises the real marginal cost or equivalently lowers the mark-up of the price over the nominal marginal cost. If the expansion in labor demand exceeds the increase in labor supply which accompanies the …scal shock, hours worked will rise in equilibrium, raisi ...
... labor to expand production. This in turn raises the real marginal cost or equivalently lowers the mark-up of the price over the nominal marginal cost. If the expansion in labor demand exceeds the increase in labor supply which accompanies the …scal shock, hours worked will rise in equilibrium, raisi ...
year12 inspection sample
... (A) Inflation – Prices on average are increasing. Eg 2%. Measured by CPI. Eg most goods and services cost more than they did last year. Price level increased from PL1 to PL2. (B) Deflation – Prices on average are decreasing. Eg -2% measured by CPI. Eg mos ...
... (A) Inflation – Prices on average are increasing. Eg 2%. Measured by CPI. Eg most goods and services cost more than they did last year. Price level increased from PL1 to PL2. (B) Deflation – Prices on average are decreasing. Eg -2% measured by CPI. Eg mos ...
Lecture 5
... final goods and services produced anywhere in the world in a given time period by the factors of production supplied by residents of the country. • U.S. GNP = U.S. GDP + [Net factor income from abroad] • [Net factor income from abroad] = Factor income received from abroad – Factor income paid to oth ...
... final goods and services produced anywhere in the world in a given time period by the factors of production supplied by residents of the country. • U.S. GNP = U.S. GDP + [Net factor income from abroad] • [Net factor income from abroad] = Factor income received from abroad – Factor income paid to oth ...
