DIVERGENT INFLATION RATES BETWEEN MEMBERS OF THE EURO B
... undoubtedly relevant, do not seem sufficient to explain the observed levels of differentials (ECB, 2003). The Balassa-Samuelson Effect and the convergence of living standards As we will see in later parts of this essay (sector structure) there are a number of reasons for which member economies might ...
... undoubtedly relevant, do not seem sufficient to explain the observed levels of differentials (ECB, 2003). The Balassa-Samuelson Effect and the convergence of living standards As we will see in later parts of this essay (sector structure) there are a number of reasons for which member economies might ...
Lecture 3
... – “Final”- we only value goods in their final form (so we don’t count sales of milk to cheesemakers- “intermediate goods”) – “Goods and services”- both count as output ...
... – “Final”- we only value goods in their final form (so we don’t count sales of milk to cheesemakers- “intermediate goods”) – “Goods and services”- both count as output ...
Principles of Macroeconomics, Case/Fair/Oster, 10e
... monetary or fiscal policy would shift the aggregate supply curve from AS0 to AS1, lower output from Y0 to Y1, and raise the price level from P0 to P1. Monetary or fiscal policy could be changed enough to have the AD curve shift from AD0 to AD1. This policy would raise aggregate output Y again, but i ...
... monetary or fiscal policy would shift the aggregate supply curve from AS0 to AS1, lower output from Y0 to Y1, and raise the price level from P0 to P1. Monetary or fiscal policy could be changed enough to have the AD curve shift from AD0 to AD1. This policy would raise aggregate output Y again, but i ...
Parkin-Bade Chapter 21
... Unpredictable changes in the inflation rate redistribute income in arbitrary ways between employers and workers and between borrowers and lenders. A high inflation rate is a problem because it diverts resources from productive activities to inflation forecasting. From a social perspective, this wast ...
... Unpredictable changes in the inflation rate redistribute income in arbitrary ways between employers and workers and between borrowers and lenders. A high inflation rate is a problem because it diverts resources from productive activities to inflation forecasting. From a social perspective, this wast ...
Chapter 7: Putting All Markets Together: The AS
... In the aggregate demand equation, we can see that an increase in nominal money, M, leads to an increase in the real money stock, M/P, leading to an increase in output. The aggregate demand curve shifts to the right. ...
... In the aggregate demand equation, we can see that an increase in nominal money, M, leads to an increase in the real money stock, M/P, leading to an increase in output. The aggregate demand curve shifts to the right. ...
District Test Review – answers are at the end of the test
... the right prices that consumers wanted. This was caused by free competition. Which of the following economic systems is being described? a. Market c. Traditional b. Command d. Mixed ____ 18. Wilfred Estonia will grow corn in his field as he always has for the last forty years. His father and Grandfa ...
... the right prices that consumers wanted. This was caused by free competition. Which of the following economic systems is being described? a. Market c. Traditional b. Command d. Mixed ____ 18. Wilfred Estonia will grow corn in his field as he always has for the last forty years. His father and Grandfa ...
The Data of Macroeconomics
... • The overall level of prices can be measured by either: – the Consumer Price Index (CPI), the price of a fixed basket of goods purchased by the typical consumer, or – the GDP deflator, the ratio of nominal to real GDP ...
... • The overall level of prices can be measured by either: – the Consumer Price Index (CPI), the price of a fixed basket of goods purchased by the typical consumer, or – the GDP deflator, the ratio of nominal to real GDP ...
A Two-Sector Model of Economic Growth
... reduction of Federal budget deficits. If this were the case, then we would expect to see the ratio of real investment to real consumption declining to its long-run average with the next recession. However, while the factors just cited have likely played some role in the remarkable strength in invest ...
... reduction of Federal budget deficits. If this were the case, then we would expect to see the ratio of real investment to real consumption declining to its long-run average with the next recession. However, while the factors just cited have likely played some role in the remarkable strength in invest ...
The changing transmission mechanism of New Zealand monetary
... This is the second of two Bulletin articles on the transmission mechanism of New Zealand monetary policy. In the first article (Drew and Sethi 2007), we described this mechanism, detailing the process by which changes in the Reserve Bank’s primary monetary policy instrument, the Official Cash Rate ( ...
... This is the second of two Bulletin articles on the transmission mechanism of New Zealand monetary policy. In the first article (Drew and Sethi 2007), we described this mechanism, detailing the process by which changes in the Reserve Bank’s primary monetary policy instrument, the Official Cash Rate ( ...
krugman ir macro module 29(65).indd
... the effect of an increase in aggregate demand. Note that real GDP increases (economic growth is considered a good thing), but at the same time the price level increases (and we would like to have price stability). Now present a new starting long-run macroeconomic equilibrium and illustrate a decreas ...
... the effect of an increase in aggregate demand. Note that real GDP increases (economic growth is considered a good thing), but at the same time the price level increases (and we would like to have price stability). Now present a new starting long-run macroeconomic equilibrium and illustrate a decreas ...
O`Sullivan Sheffrin Peres 6e
... Crowding Out in the Long Run Starting at full employment, an increase in government spending raises output above full employment. As wages and prices increase, the demand for money increases, as shown in Panel A, raising interest rates from r0 to r1 (point a to point b) and reducing investment from ...
... Crowding Out in the Long Run Starting at full employment, an increase in government spending raises output above full employment. As wages and prices increase, the demand for money increases, as shown in Panel A, raising interest rates from r0 to r1 (point a to point b) and reducing investment from ...
Prices Are Sticky After All
... is clearly at the heart of the widely used New Keynesian analysis. In standard New Keynesian models, the degree of aggregate price stickiness is determined by the frequency of price changes at the micro level: if individual good prices change rarely, then the aggregate price level is highly sticky a ...
... is clearly at the heart of the widely used New Keynesian analysis. In standard New Keynesian models, the degree of aggregate price stickiness is determined by the frequency of price changes at the micro level: if individual good prices change rarely, then the aggregate price level is highly sticky a ...
EEB 1.99 - Gold Standard - American Institute for Economic
... tions on branch banking. Thousands of small independent banks dependent for their solvency on local economies and for their liquidity on New York were susceptible to failure, runs, and panic whenever crops failed or the balance of payments turned to deficit. But the effects of gold losses were mode ...
... tions on branch banking. Thousands of small independent banks dependent for their solvency on local economies and for their liquidity on New York were susceptible to failure, runs, and panic whenever crops failed or the balance of payments turned to deficit. But the effects of gold losses were mode ...
sample - Test Bank College
... MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Which of the following statements is correct with regard to the opening case entitled ʺThe Ups and Downs of Commoditiesʺ? A) The steep decline in the price of oil caused many oil companies to p ...
... MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Which of the following statements is correct with regard to the opening case entitled ʺThe Ups and Downs of Commoditiesʺ? A) The steep decline in the price of oil caused many oil companies to p ...
NBER WORKING PAPER SERIES OPTIMAL MONETARY AND FISCAL POLICY Jordi Gali
... in a currency union, and study its implications for the optimal design of such policies from the viewpoint of the union as a whole. In our opinion that analytical framework has to meet several desiderata. First, it has to incorporate some of the main features characterizing the optimizing models wit ...
... in a currency union, and study its implications for the optimal design of such policies from the viewpoint of the union as a whole. In our opinion that analytical framework has to meet several desiderata. First, it has to incorporate some of the main features characterizing the optimizing models wit ...
Wages Behaviour and Unemployment in Keynes and New
... increase in prices but would resist reductions in nominal wages?6 Most recent findings on changes in pay over time give support from the empirical ground to Keynes’s statement. Although nominal wages are not completely rigid downwards they are somewhat sticky in the short term and are certainly not ...
... increase in prices but would resist reductions in nominal wages?6 Most recent findings on changes in pay over time give support from the empirical ground to Keynes’s statement. Although nominal wages are not completely rigid downwards they are somewhat sticky in the short term and are certainly not ...
Principles of Macroeconomics, Exams, Fall 2011
... b. It is possible for real GDP to rise more rapidly than nominal GDP; this happens if an economy is experiencing deflation. c. It is possible for the CPI to fall over time; this happens if an e ...
... b. It is possible for real GDP to rise more rapidly than nominal GDP; this happens if an economy is experiencing deflation. c. It is possible for the CPI to fall over time; this happens if an e ...
Basic Definitions and Accounting
... Gross domestic product (GDP) is the current dollar value of all final goods and services that are produced within a country within a given period of time. “Goods” are physical things that we consume (like a shirt) while “services” are intangible things that we consume but which are not necessarily p ...
... Gross domestic product (GDP) is the current dollar value of all final goods and services that are produced within a country within a given period of time. “Goods” are physical things that we consume (like a shirt) while “services” are intangible things that we consume but which are not necessarily p ...
Behavioral economics and macroeconomic models1
... the model displays a lack of inertia; shocks have immediate effects, which dissipate quickly. To see this, note that a shock in period t will only have effects in that period—in subsequent periods, the levels of the endogenous variables only depend on each other, current shocks, and expected future ...
... the model displays a lack of inertia; shocks have immediate effects, which dissipate quickly. To see this, note that a shock in period t will only have effects in that period—in subsequent periods, the levels of the endogenous variables only depend on each other, current shocks, and expected future ...
Price Level
... Why the Aggregate-Supply Curve Slopes Upward in the Short Run • The Sticky-Wage Theory • Nominal wages are slow to adjust to changing economic conditions, or are “sticky” in the short run. • When nominal wages are based on the expected prices and do not respond immediately when the actual price lev ...
... Why the Aggregate-Supply Curve Slopes Upward in the Short Run • The Sticky-Wage Theory • Nominal wages are slow to adjust to changing economic conditions, or are “sticky” in the short run. • When nominal wages are based on the expected prices and do not respond immediately when the actual price lev ...
