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Abel & Bernanke
Ch. 8, 10 - 11
Key
Macroeconomic
Theories of the
Business Cycle
Figure 1.1 Output of the U.S. economy,
1869–2002
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Figure 1.2 Average labor productivity in
the United States, 1900–2002
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Figure 1.3 The U.S. unemployment
rate, 1890–2002
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Figure 1.4 Consumer prices in the
United States
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Figure 1.5 U.S. exports and imports,
1869–2002
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Figure 1.6 U.S. Federal government
spending and tax collections, 1869–2002
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Figure 8.1 Business cycles (Ch. 8)
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Figure 8.2 Index of industrial production,
January 2000–April 2003
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Figure 8.3 Total nonfarm employment,
January 2000–April 2003
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Figure 8.5 Cyclical behavior of
consumption and investment
Total Output = Y = C + I + G + NX
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Figure 8.12 The aggregate demand–
aggregate supply model
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Figure 8.13 An adverse aggregate
demand shock
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Figure 8.14 An adverse aggregate
supply shock
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Neoclassical / Real Business Cycles (Ch. 10):
Figure 10.3 Small shocks and large cycles
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Figure 10.4 Effects of a temporary
increase in government purchases
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Figure 10.6 The aggregate supply curve in
the misperceptions theory
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Figure 10.7 An unanticipated increase in
the money supply
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Figure 10.8 An anticipated increase in the
money supply
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Key Diagram 8 The misperceptions
version of the AD–AS model
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Keynesianism (Ch. 11):
Figure 11.1 Determination of the efficiency wage
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Figure 11.2 Excess supply of labor in the
efficiency wage model
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Table 11.1 Average Times Between Price
Changes for Various Industries
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Figure 11.3 The effective labor demand
curve
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Figure 11.4 An increase in the money
supply
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Figure 11.4 An increase in the money
supply (cont’d)
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Figure 11.5 An increase in government
purchases
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Figure 11.5 An increase in government
purchases (cont’d)
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Figure 11.6 An increase in government
purchases in the Keynesian AD–AS framework
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Figure 11.7 A recession arising from an
aggregate demand shock
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Figure 11.8 Stabilization policy in the
Keynesian model
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Figure 11.9 An oil price shock in the
Keynesian model
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Key Elements of Monetary and Fiscal
Policies
• Monetary Policy is controlled by the Federal
Reserve which has two, competing goals:
– Stimulate healthy economic growth, and
– Control inflation at a manageable level.
• Fiscal Policy is controlled by the Federal
Government which has three key tools:
– Discretionary government spending,
– Ability to enact new taxes (to increase Govt. Revenue), and
– Automatic Stabilizers (e.g., income taxes, unemployment
benefits).
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