university of maiduguri - Unimaid, Centre for Distance Learning
... willing and capable hands in an economy have a fairly gainful employment. Keynes assumes that “with a given organization, equipment and techniques, real wages and the volume of output (and hence employment) are uniquely corelated, so that in general, an increase in employment can only occur in the a ...
... willing and capable hands in an economy have a fairly gainful employment. Keynes assumes that “with a given organization, equipment and techniques, real wages and the volume of output (and hence employment) are uniquely corelated, so that in general, an increase in employment can only occur in the a ...
NBER WORKING PAPER SERIES KEYNESIAN, NEW KEYNESIAN, AND NEW CLASSICAL ECONOMICS Bruce Greenwald
... 6Thus, the policy implications of these theories may be markedly different from those of the standard fixed wage—price The latter assume that economic policy has no effect on ...
... 6Thus, the policy implications of these theories may be markedly different from those of the standard fixed wage—price The latter assume that economic policy has no effect on ...
Problem Set 13
... (E) Decrease but, according to the sticky wage theory, real GDP supplied will increase. (Answer: (A)) 3. The fact that labor is an economically indivisible factor of production implies that (A) Firms will tend to adjust the quantity of labor demanded by changing hours per worker rather than changing ...
... (E) Decrease but, according to the sticky wage theory, real GDP supplied will increase. (Answer: (A)) 3. The fact that labor is an economically indivisible factor of production implies that (A) Firms will tend to adjust the quantity of labor demanded by changing hours per worker rather than changing ...
Monetary Policy Effects
... Remember by monetary policy we mean the interest rate behavior of the Fed. Stagflation is particularly bad news for policy makers. No matter what the Fed does, it will result in a worsening of either output or inflation. Should the Fed raise the interest rate to lessen inflation at a cost of making ...
... Remember by monetary policy we mean the interest rate behavior of the Fed. Stagflation is particularly bad news for policy makers. No matter what the Fed does, it will result in a worsening of either output or inflation. Should the Fed raise the interest rate to lessen inflation at a cost of making ...
Last day to sign up for AP Exam
... Aggregate Supply differentiates between short run and long-run and has two different curves. Short-run Aggregate Supply •Wages and Resource Prices will not increase as price levels increase. Long-run Aggregate Supply •Wages and Resource Prices will increase as price levels increase. ...
... Aggregate Supply differentiates between short run and long-run and has two different curves. Short-run Aggregate Supply •Wages and Resource Prices will not increase as price levels increase. Long-run Aggregate Supply •Wages and Resource Prices will increase as price levels increase. ...
Thinking Like an Economist
... while increasing GDP can have a negative effect on the environment Some items are included that do not reflect net benefits to society. • Environmental clean-ups bring us back to the pre-damage state. These expenditures are included with no offsetting reduction to reflect the cost of pollution. ...
... while increasing GDP can have a negative effect on the environment Some items are included that do not reflect net benefits to society. • Environmental clean-ups bring us back to the pre-damage state. These expenditures are included with no offsetting reduction to reflect the cost of pollution. ...
Economics 101 Name
... price for water, the supply of coffee would fall (shift to the left). Both changes have the same effect on the price of coffee --- it rises. But the two changes have opposite effects on the quantity. Therefore, the change in the quantity cannot be determined. This case would be seen as an increase i ...
... price for water, the supply of coffee would fall (shift to the left). Both changes have the same effect on the price of coffee --- it rises. But the two changes have opposite effects on the quantity. Therefore, the change in the quantity cannot be determined. This case would be seen as an increase i ...
AGGREGATE DEMAND AND AGGREGATE SUPPLY The
... c) Investments are typically more volatile than GDP. Thus, in a recession the decline in investements is typically higher than the decline in GDP meaning that compared with the long-run average capital has to be used more intensively. Thus capacity utilization rate in a recession should be above the ...
... c) Investments are typically more volatile than GDP. Thus, in a recession the decline in investements is typically higher than the decline in GDP meaning that compared with the long-run average capital has to be used more intensively. Thus capacity utilization rate in a recession should be above the ...
Bank of England Inflation Report May 2014 Prospects for inflation
... The fan chart depicts the probability of various outcomes for LFS unemployment. It has been conditioned on the assumption that the stock of purchased assets financed by the issuance of central bank reserves remains at £375 billion throughout the forecast period. If economic circumstances identical t ...
... The fan chart depicts the probability of various outcomes for LFS unemployment. It has been conditioned on the assumption that the stock of purchased assets financed by the issuance of central bank reserves remains at £375 billion throughout the forecast period. If economic circumstances identical t ...
Ch 33
... The tool is the overnight interest rate (the federal funds rate in the United States). There never has been one goal for U.S. monetary policy. The Fed’s “dual mandate” is low inflation and maximum employment. Even the central banks that have a formal inflation target pay attention to the output gap ...
... The tool is the overnight interest rate (the federal funds rate in the United States). There never has been one goal for U.S. monetary policy. The Fed’s “dual mandate” is low inflation and maximum employment. Even the central banks that have a formal inflation target pay attention to the output gap ...
NBER WORKING PAPER SERIES AN INTERTEMPORAL DISEQUILIBRIUM MODEL Olivier J. Blanchard Jeffrey Sachs
... (Hall [121 and Sachs [221 allow for a nonlabor market clearing real wage) ...
... (Hall [121 and Sachs [221 allow for a nonlabor market clearing real wage) ...
inflation rate
... shocks, including variations in economic activity or production costs, will temporarily move inflation away from the central bank’s inflation objective Inflation persistence refers to the tendency of inflation to converge slowly towards its long-run value in response to these shocks Differences in ...
... shocks, including variations in economic activity or production costs, will temporarily move inflation away from the central bank’s inflation objective Inflation persistence refers to the tendency of inflation to converge slowly towards its long-run value in response to these shocks Differences in ...
Due Date: Thursday, September 8th (at the beginning of class)
... Fed A cares only about keeping the price level stable, and Fed B cares only about keeping output and employment at their natural rates. Explain how each Fed would respond to: a. an exogenous INCREASE in the demand for money. An increase in money demand will shift the Aggregate Demand curve to the LE ...
... Fed A cares only about keeping the price level stable, and Fed B cares only about keeping output and employment at their natural rates. Explain how each Fed would respond to: a. an exogenous INCREASE in the demand for money. An increase in money demand will shift the Aggregate Demand curve to the LE ...
Problem Set 8 FE312 Fall 2011 Rahman Some Answers 1
... Fed A cares only about keeping the price level stable, and Fed B cares only about keeping output and employment at their natural rates. Explain how each Fed would respond to: a. an exogenous INCREASE in the demand for money. An increase in money demand will shift the Aggregate Demand curve to the LE ...
... Fed A cares only about keeping the price level stable, and Fed B cares only about keeping output and employment at their natural rates. Explain how each Fed would respond to: a. an exogenous INCREASE in the demand for money. An increase in money demand will shift the Aggregate Demand curve to the LE ...
economics
... © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. ...
... © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. ...
Notes
... • In late 1998, the Bank of Japan, and the Bank of England, were removed from the direct control of the Ministry of Finance and the Chancellor and the Exchequer respectively. • In 1997 and 2003 revisions of the Bank of Korea Act, the Bank of Korea were removed from the direct and indirect control of ...
... • In late 1998, the Bank of Japan, and the Bank of England, were removed from the direct control of the Ministry of Finance and the Chancellor and the Exchequer respectively. • In 1997 and 2003 revisions of the Bank of Korea Act, the Bank of Korea were removed from the direct and indirect control of ...
Document
... in such a way as to bring about continued increases in aggregate demand is the money supply. • Money Supply is the only factor that can continually increase without causing a reduction in one of the four components of total expenditures: consumption, investment, government purchases, or net exports. ...
... in such a way as to bring about continued increases in aggregate demand is the money supply. • Money Supply is the only factor that can continually increase without causing a reduction in one of the four components of total expenditures: consumption, investment, government purchases, or net exports. ...
Is it a Recessionary Gap or a fall in Potential Output?
... $11.16 a barrel. That’s a huge inflation shock. It’s no wonder that inflation rose and output fell. But the right reaction depends crucially on what happened to potential output at the time. In retrospect we know that, as oil prices rose, the productive capacity of the economy fell. But at the time, ...
... $11.16 a barrel. That’s a huge inflation shock. It’s no wonder that inflation rose and output fell. But the right reaction depends crucially on what happened to potential output at the time. In retrospect we know that, as oil prices rose, the productive capacity of the economy fell. But at the time, ...
Private sector expectations for inflation and economic activity in the
... Indicators of longer-term inflation expectations Longer-term inflation expectations remained stable at 1.9% for the 13th consecutive round of the SPF. This is in line with the recently published Euro Zone Barometer estimate and 0.1 percentage point lower than the three-month old Consensus Economics ...
... Indicators of longer-term inflation expectations Longer-term inflation expectations remained stable at 1.9% for the 13th consecutive round of the SPF. This is in line with the recently published Euro Zone Barometer estimate and 0.1 percentage point lower than the three-month old Consensus Economics ...
Chapter 15 - FIU Faculty Websites
... A lower price level than expected causes misperceptions about relative prices, and these misperceptions induce suppliers to respond to the lower price level by decreasing the quantity of good and services supplied. ...
... A lower price level than expected causes misperceptions about relative prices, and these misperceptions induce suppliers to respond to the lower price level by decreasing the quantity of good and services supplied. ...
Charting the projections: 2004-14, Introduction to the projections
... a number of steps. We begin with a view of how the U.S. economy will grow over the next 10 years. We create a model of an economy that is operating at potential—with strong output growth, strong labor productivity, and relatively low unemployment rates—in the long term. Using this framework, we esti ...
... a number of steps. We begin with a view of how the U.S. economy will grow over the next 10 years. We create a model of an economy that is operating at potential—with strong output growth, strong labor productivity, and relatively low unemployment rates—in the long term. Using this framework, we esti ...
The St. Louis Fed`s New Characterization of the Outlook for the U.S.
... that formulation, all variables trended toward values that were consistent with the assumed long-run outcome. This includes the policy rate, which trended toward a value 350 basis points higher than it is today. If the Committee moved at a pace of 25 basis points per year, it would take 14 years to ...
... that formulation, all variables trended toward values that were consistent with the assumed long-run outcome. This includes the policy rate, which trended toward a value 350 basis points higher than it is today. If the Committee moved at a pace of 25 basis points per year, it would take 14 years to ...
Post-Hegemonic US Economic Hegemony
... the only price of “stabilizing the unstable economy” (Minsky 1986); another was a build-up of debt/income ratios, since balance sheets are no longer as thoroughly “cleansed” through widespread business failures in downturns as they were during the small-government period. Dymski and Pollin (1994) in ...
... the only price of “stabilizing the unstable economy” (Minsky 1986); another was a build-up of debt/income ratios, since balance sheets are no longer as thoroughly “cleansed” through widespread business failures in downturns as they were during the small-government period. Dymski and Pollin (1994) in ...
Real Business Cycle Model
... • Business cycles are explained in this model by permitting the actual price level to differ from the price level expected by the workers. • However, when the workers learn they have been fooled, their price expectations rise and they demand a wage sufficient to regain the original real wage. • The ...
... • Business cycles are explained in this model by permitting the actual price level to differ from the price level expected by the workers. • However, when the workers learn they have been fooled, their price expectations rise and they demand a wage sufficient to regain the original real wage. • The ...
Full employment
Full employment, in macroeconomics, is the level of employment rates where there is no cyclical or deficient-demand unemployment. It is defined by the majority of mainstream economists as being an acceptable level of unemployment somewhere above 0%. The discrepancy from 0% arises due to non-cyclical types of unemployment, such as frictional unemployment (there will always be people who have quit or have lost a seasonal job and are in the process of getting a new job) and structural unemployment (mismatch between worker skills and job requirements). Unemployment above 0% is seen as necessary to control inflation in capitalist economies, to keep inflation from accelerating, i.e., from rising from year to year. This view is based on a theory centering on the concept of the Non-Accelerating Inflation Rate of Unemployment (NAIRU); in the current era, the majority of mainstream economists mean NAIRU when speaking of ""full"" employment. The NAIRU has also been described by Milton Friedman, among others, as the ""natural"" rate of unemployment. Having many names, it has also been called the structural unemployment rate.The 20th century British economist William Beveridge stated that an unemployment rate of 3% was full employment. Other economists have provided estimates between 2% and 13%, depending on the country, time period, and their political biases. For the United States, economist William T. Dickens found that full-employment unemployment rate varied a lot over time but equaled about 5.5 percent of the civilian labor force during the 2000s. Recently, economists have emphasized the idea that full employment represents a ""range"" of possible unemployment rates. For example, in 1999, in the United States, the Organisation for Economic Co-operation and Development (OECD) gives an estimate of the ""full-employment unemployment rate"" of 4 to 6.4%. This is the estimated unemployment rate at full employment, plus & minus the standard error of the estimate.The concept of full employment of labor corresponds to the concept of potential output or potential real GDP and the long run aggregate supply (LRAS) curve. In neoclassical macroeconomics, the highest sustainable level of aggregate real GDP or ""potential"" is seen as corresponding to a vertical LRAS curve: any increase in the demand for real GDP can only lead to rising prices in the long run, while any increase in output is temporary.