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... In the long run, income is proportional to the economy's initial stock of human capital. Saving rate has no effect on growth rate. Implication of the model: Under purely competitive equilibrium there will be underinvestment in human capital since private agents do not take into account externa ...
... In the long run, income is proportional to the economy's initial stock of human capital. Saving rate has no effect on growth rate. Implication of the model: Under purely competitive equilibrium there will be underinvestment in human capital since private agents do not take into account externa ...
Investment
... variables as given except current output Y and current real interest rate r. The IS curve is still downward-sloping. Why? A decrease in the current real interest rate leads to an increase in spending, which through the multiplier effect leads to an increase in output. However, this revised IS curve ...
... variables as given except current output Y and current real interest rate r. The IS curve is still downward-sloping. Why? A decrease in the current real interest rate leads to an increase in spending, which through the multiplier effect leads to an increase in output. However, this revised IS curve ...
I appreciate this opportunity to discuss the paper by I have Henrik
... the works of Mill (1874) and Thornton (1802) distinguishes between short and long-run effects of changes in the money supply. In the short run, changes in the quantity of monetary aggregates do affect the level of output and employment in a country, though these real effects disappear in the long ru ...
... the works of Mill (1874) and Thornton (1802) distinguishes between short and long-run effects of changes in the money supply. In the short run, changes in the quantity of monetary aggregates do affect the level of output and employment in a country, though these real effects disappear in the long ru ...
When It Rains, It Pours: Procyclical Capital Flows and
... crisis, the fiscal authority cuts budgets deficits while the central bank raises interest rates—possibly exacerbating the economic contraction. Procyclical policies, however, do not appear to be limited to crisis periods in many developing countries. In fact, the roots of most of the debt crises in ...
... crisis, the fiscal authority cuts budgets deficits while the central bank raises interest rates—possibly exacerbating the economic contraction. Procyclical policies, however, do not appear to be limited to crisis periods in many developing countries. In fact, the roots of most of the debt crises in ...
Chapter 16
... Frictional or structural unemployment can change – thereby changing the natural rate – for several reasons: Demographic changes. Labor market institutions. What makes the natural rate of unemployment increase or decrease? ...
... Frictional or structural unemployment can change – thereby changing the natural rate – for several reasons: Demographic changes. Labor market institutions. What makes the natural rate of unemployment increase or decrease? ...
Ch13
... Three factors that can increase the inflation rate Output gap Inflation shock Shock to potential output ...
... Three factors that can increase the inflation rate Output gap Inflation shock Shock to potential output ...
Parkin-Bade Chapter 28
... Real Business Cycle Theory Real business cycle theory regards random fluctuations in productivity as the main source of economic fluctuations. These productivity fluctuations are assumed to result mainly from fluctuations in the pace of technological change. But other sources might be international ...
... Real Business Cycle Theory Real business cycle theory regards random fluctuations in productivity as the main source of economic fluctuations. These productivity fluctuations are assumed to result mainly from fluctuations in the pace of technological change. But other sources might be international ...
PDF file
... and opening up the goods and Þnancial markets. In particular there was a shift from a managed exchange rate regime to an almost entirely ßexible exchange rate (within a very wide band of more that 50%), with practically no intervention in the market. ...
... and opening up the goods and Þnancial markets. In particular there was a shift from a managed exchange rate regime to an almost entirely ßexible exchange rate (within a very wide band of more that 50%), with practically no intervention in the market. ...
The new North-South Divide in Europe – can the European
... corporate sectors combined with very cautious behaviour of European banks towards new lending and debt restructuring leads to protracted processes of deleveraging and thus reduced spending. In contrast, together with financial market stabilisation and that of the housing market, both investment and ...
... corporate sectors combined with very cautious behaviour of European banks towards new lending and debt restructuring leads to protracted processes of deleveraging and thus reduced spending. In contrast, together with financial market stabilisation and that of the housing market, both investment and ...
here - Hans-Böckler
... consistent with that real wage, thereby determining the level of output. The real interest rate then adjusts in the loanable funds market to ensure that AD equals aggregate supply (AS). Aggregate saving (the supply of loanable funds) is thereby brought into alignment with aggregate desired investme ...
... consistent with that real wage, thereby determining the level of output. The real interest rate then adjusts in the loanable funds market to ensure that AD equals aggregate supply (AS). Aggregate saving (the supply of loanable funds) is thereby brought into alignment with aggregate desired investme ...
This PDF is a selection from an out-of-print volume from... Bureau of Economic Research
... and a mere 13 per cent in exports, compared with the gross (formal) devaluation of 67 per cent. To the extent that a net devaluation did take place, it was apparently motivated not so much, if at all, by any current pressure on the balance of payments, as by anticipations of adverse developments in ...
... and a mere 13 per cent in exports, compared with the gross (formal) devaluation of 67 per cent. To the extent that a net devaluation did take place, it was apparently motivated not so much, if at all, by any current pressure on the balance of payments, as by anticipations of adverse developments in ...
Lecture 3: Vulnerabilities Related to the Scaling Up of Aid and Other
... supply and to inflation If Central Bank sterilizes the impact of aid spending in nontradables on money supply by selling foreign exchange, currency appreciates in nominal terms ...
... supply and to inflation If Central Bank sterilizes the impact of aid spending in nontradables on money supply by selling foreign exchange, currency appreciates in nominal terms ...
ASSESSING EMPIRICAL RELATIONSHIPS BETWEEN OUTPUT
... new consensus or mainstream model by taking into account that “The natural rate of growth is ultimately endogenous to the demand-determined actual rate of growth” (SETTERFIELD, 2002, p. 5). Lavoie (op. cit.) argues that, as León-Lesdema and Thirlwall (2002) have shown in an empirical study for fifte ...
... new consensus or mainstream model by taking into account that “The natural rate of growth is ultimately endogenous to the demand-determined actual rate of growth” (SETTERFIELD, 2002, p. 5). Lavoie (op. cit.) argues that, as León-Lesdema and Thirlwall (2002) have shown in an empirical study for fifte ...
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... change of a country’s GDP, and changes in its unemIreland. However, we also observe a huge gap between ployment rate, as well as equivalised income. the two age groups in Hungary, Italy and Greece (with the EU’s highest rate of at-risk-of-poverty for people The Pearson correlation coefficients betwe ...
... change of a country’s GDP, and changes in its unemIreland. However, we also observe a huge gap between ployment rate, as well as equivalised income. the two age groups in Hungary, Italy and Greece (with the EU’s highest rate of at-risk-of-poverty for people The Pearson correlation coefficients betwe ...
Chapter 8: How the Fed Moves the Economy
... Household spending on durable goods such as appliances, cars, and housing is also sensitive to interest rates because these are the capital goods of the household. That new refrigerator that uses half as much electricity as the old icebox, makes ice cubes automatically, and is much more reliable ha ...
... Household spending on durable goods such as appliances, cars, and housing is also sensitive to interest rates because these are the capital goods of the household. That new refrigerator that uses half as much electricity as the old icebox, makes ice cubes automatically, and is much more reliable ha ...
Inflation and Unemployment
... Criticisms and Defence of RBC Theory Defenders of RBC theory claim that 1. RBC theory explains the macroeconomic facts about business cycles and is consistent with the facts about economic growth. RBC theory is a single theory that explains both growth and cycles. 2. RBC theory is consistent with a ...
... Criticisms and Defence of RBC Theory Defenders of RBC theory claim that 1. RBC theory explains the macroeconomic facts about business cycles and is consistent with the facts about economic growth. RBC theory is a single theory that explains both growth and cycles. 2. RBC theory is consistent with a ...
DP2010/14 Monetary Policy, In‡ation and Unemployment Nicolas Groshenny December 2010
... at 0:33. The elasticity of substitution between intermediate goods is set equal to 6; impliying a steady-state markup of 20 percent as in Rotemberg and Woodford (1995). The vacancy-…lling rate q is set equal to 0:70: This is just a normalization as q is not identi…ed. The steady-state government spe ...
... at 0:33. The elasticity of substitution between intermediate goods is set equal to 6; impliying a steady-state markup of 20 percent as in Rotemberg and Woodford (1995). The vacancy-…lling rate q is set equal to 0:70: This is just a normalization as q is not identi…ed. The steady-state government spe ...
EFFECT OF TRADE DEFICIT ON THE ECONOMY OF PAKISTAN
... as fast as trade (Meyer, 2003). As there was lack of capital in the developing countries that need the capital for their development process, the marginal productivity of capital was higher in these countries. The selective policies not only improve fundamentals of the economy but they also aim at a ...
... as fast as trade (Meyer, 2003). As there was lack of capital in the developing countries that need the capital for their development process, the marginal productivity of capital was higher in these countries. The selective policies not only improve fundamentals of the economy but they also aim at a ...
The Great Recession, ‘Rainy Day’ Funds, and Countercyclical Fiscal Policy... Latin America
... the large stocks of foreign exchange reserves that they had previously accumulated as “rainyday” funds. In the current paper we review our argument in light of the actual experience. In retrospect, we find that fiscal policy actually exercised by these countries has indeed been an important componen ...
... the large stocks of foreign exchange reserves that they had previously accumulated as “rainyday” funds. In the current paper we review our argument in light of the actual experience. In retrospect, we find that fiscal policy actually exercised by these countries has indeed been an important componen ...
Trinidad and Tobago: 2006 Article IV Consultation—Staff Report; Staff Statement;
... this year. The current account surplus is running at around 25 percent of GDP, the budget has posted sizable surpluses, and net public debt fallen sharply. However, the underlying fiscal situation has deteriorated and the nonenergy fiscal deficit has risen. Aggregate demand pressures have mounted an ...
... this year. The current account surplus is running at around 25 percent of GDP, the budget has posted sizable surpluses, and net public debt fallen sharply. However, the underlying fiscal situation has deteriorated and the nonenergy fiscal deficit has risen. Aggregate demand pressures have mounted an ...
Chapter 17: Monetary Policy
... – Wealth redistribution between borrowers and lenders – Leads to greater uncertainty about the future inflation rate ...
... – Wealth redistribution between borrowers and lenders – Leads to greater uncertainty about the future inflation rate ...
Aalborg Universitet
... Chaaminade, 2007). Also, there have been attempts to broaden NSI approach to study the problems and challenges of development and underdevelopment (e.g. Muchie et al., 2003). Thus, NSI provides the conceptual approach or framework for studying both developed and developing economies at various stag ...
... Chaaminade, 2007). Also, there have been attempts to broaden NSI approach to study the problems and challenges of development and underdevelopment (e.g. Muchie et al., 2003). Thus, NSI provides the conceptual approach or framework for studying both developed and developing economies at various stag ...
Although understanding economic growth has always been the
... progress, σ must exceed a critical value ( σ Hc ) that is greater than 1. This critical value depends on saving, population growth, and depreciation rates, and initial capital share of output. However, such a high critical value does not exist for many countries. In this section, we demonstrate anot ...
... progress, σ must exceed a critical value ( σ Hc ) that is greater than 1. This critical value depends on saving, population growth, and depreciation rates, and initial capital share of output. However, such a high critical value does not exist for many countries. In this section, we demonstrate anot ...
world public debt and real interest rates
... frequency avoids overlapping data, which would complicate the estimation.5 However, this leaves only 20 observations, which imposes important constraints on estimation methods and on statistical interpretation. Extending the series back would not appear to be appropriate, since capital market libera ...
... frequency avoids overlapping data, which would complicate the estimation.5 However, this leaves only 20 observations, which imposes important constraints on estimation methods and on statistical interpretation. Extending the series back would not appear to be appropriate, since capital market libera ...