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发布时间:2014-01-10 09:44:03  

Some Important Identities
? ? ? ? ? ?

Simple economy—no government and foreign trade Output produced equals output sold Y?C+I Y?S+C Therefore I ? S (2.4) (2.5) (2.7) All income is consumed or saved

Chapter 2

Government and Foreign Trade
? ?

Y ? C + I + G + NX

(2.8)

Disposable income (YD) includes transfers (TR) and is net of taxes (TA) YD ? Y + TR - TA YD ? C + S (2.9) (2.10) Disposable income (YD) is consumed (C) or saved (S) Using (2.9) and (2.10) to eliminate YD, substituting for C in (2.8) and rearranging gives

? ? ? ?

S - I ? (G + TR - TA) + NX
?

(G + TR - TA) represents the excess of government spending over receipts, called the budget deficit (BD)

?

This gives:

S - I ? BD + NX

(2.12)

Chapter 2

Price Indices
?

The GDP deflator is the ratio of nominal GDP to real GDP for a year (a broad-based price index) The consumer price index (CPI) measures
?

?

a typical urban consumers’ cost of purchases

?
?

based on a fixed basket of goods and services

The CPI is more narrow but includes import prices

Chapter 2

Inflation
?

Inflation (?) is the rate of change in prices P ? P ?1 t ? ? t P ?1 t

Interest rates reported in the media are nominal rates Real interest rate = nominal interest rate -(expected) inflation rate A 10-year Treasury bond paying 6.08% p.a. with 1.6% annual inflation rate has a real return of ? Real return = 6.08% - 1.6% = 4.28%

Chapter 2

Chapter 3,4

1. Growth accounting
? Assume only inputs- the labor (N)& the capital (K)

Y ? AF ( K , N ) ? AK N
?

1??

? Cobb-Douglas production function (C-D): special type ? A: productivity / technology

? Y = F(N,K) = AK? N1-?==>
? then the rate of output growth :

the shares in productio n

? ?Y/Y = ?A/A + (1 - ?)(?N/N) + ?(?K/K)

Chapter 3,4

1. Growth accounting
? ?A/A : the change in total factor productivity (TFP), or the rate of technological progress. ?A/A is often called the Solow residual. ? The growth rate of total factor productivity is the amount by which output would increase as a result of improvements in methods of production, with all inputs unchanged. ? Get more output from the same factors of production. ? Exercises: P 62:1,2,3

Chapter 3,4

1. Growth accounting
? Per capita output /capital
? y=Y/N , k=K/N (capital-labor ratio) ? ?y/y=?Y/Y-?N/N ? ?k/k=?K/K-?N/N ? ?y/y= ? *?k/k+?A/A

Chapter 3,4

3. Neoclassical growth theory
? 3.1 assumption:
? ? ? ? ? No technological progress Diminishing marginal product of capital Constant returns to scale Constant rate n= △ N/N No government and no foreign trade or capital flows ? S=sY, saving is a constant fraction. ? Only one product, N & K substitutional ? Perfect Competition market

Chapter 3,4

3. Neoclassical growth theory
? Equation:

?k ? sy ? (n ? d )k ?Y ? C ? S ,Y ? C ? I I sY ? I ?S ?i? ? ? sy

the
percentage of the working-age population in the labor force.

Labor force ?100 ? Labor force participation rate Working-age population

Chapter 7

unemployment rate u=U/(E+U) or u=U/LF The aggregate unemployment rate tells us
the share of the labor force that is unemployed

Wi are the fraction of the civilian LF that falls within a specific group

Chapter 7

Types of Unemployment
? Frictional Unemployment and Job Search
Frictional unemployment Short-term unemployment that arises from the process of matching workers with jobs.

? Structural Unemployment

Structural unemployment Unemployment arising from a persistent mismatch between the skills and characteristics of workers and the requirements of jobs. excess of FU. Cyclical unemployment Unemployment caused by a business cycle recession.
(P134):

? Cyclical Unemployment

Chapter 8

1. Lags in the effects of policy
?
? ? ?
? ?

Inside lag: undertake a policy action
the recognition lag (occurs-recognize the need ) the decision lags (recognition-decision, M<F) the action lags (decision-implementation,M<F)
automatic stabilizers (inside lage=0,but limited): income tax, unemployment compensation

?

?
?

Outside lag (M>F): effects
M: increase/decrease M : open market operation r I C AD

The consumption function (MPC&MPS)
?

Chapter 9

a simple short-run consumption function is presented as :
( 0 < c < 1) and C* > 0 , autonomous consumption

?C
?

= C* + cYD

? c:
?

MPC

(the marginal propensity to consume)

1 – c:

the marginal propensity to save

(MPS).

Equilibrium output
AD ? C ? I ? G ? NX C ? C ? cYD YD ? Y ? TA ? TR Y ? AD

Chapter 9

(cf)

Y ? AD ? C ? I ? G ? NX ? C ? c(Y ? T A ? T R ) ? I ? G ? N X ? C ? c(T A - T R ) ? I ? G ? N X ? cY ? A ? cY

Y ? A ? cY 1 Y ? A 1- c 1 ?Y ? ?A 1- c
0 0

Chapter 9

Multiplier
? Multiplier(P197):

the amount by which equilibrium output changes when autonomous AD increases by 1 unit.

??

= 1/(1 - c)>1

Chapter 9

5. Government sector
G ? G , TR ? T R , TA ? tY C ? C ? cYD YD =Y ? TR - TA
different

G:G;TR&TA:C

AD ? C ? I ? G ? NX ? C ? cT R ? c(1- t)Y ? I ? G ? NX ? C ? cT R ? I ? G ? NX ? c(1- t)Y ? A ? c(1- t)Y

AD ? C ? I ? G ? NX Y ? AD
C ? C ? cYD ? C ? c(Y ? TR - TA) ? C ? c (Y ? T R - tY) ? C ? cT R ? c (1 - t)Y

Y ? A ? c(1- t)Y
0

A Y? 1 - c(1- t)
0

Chapter 9 Income Taxes Lower The Multiplier
A ? C ? c T R ? I ? G ? NX Y ? A ? c(1- t)Y
0

? ?

Eg: c=0.8,a=5; If t=0.25,then
G

C ? c T R ? I ? G ? NX Y ? 1 - c(1- t)
0

1 1 = =2.5 1 - c(1- t) 1 - 0.8(1- 0.25) c 0.8 ? ? = =2 1 - c(1- t) 1 - 0.8(1- 0.25)

? ?

TR

?G ?Y ? 1 - c(1- t) 1 ? ? 1 - c(1- t)
0 G

? ?

Automatic stabilizers Reduce Y

c? T R ?Y ? 1 - c(1- t) c ? ? 1 - c(1- t)
0 TR

Chapter 9

6. The BS &BS*

?
?

Concern over a budget deficit:
Government’s borrowing makes it difficult for private firms to borrow and invest, and thus slows the economy’s growth.

BS =TA - G - T R TA=tY BS =tY - G - T R ? -BD

Chapter 9

Balanced budget multiplier
?

Balanced budget multiplier
0 1

(BS=0)
0 1

?BS =?TA - ?G ? 0 ?G ? ?TA ? ?tY ? t ?Y C ? C ? cY ? C ? c(Y ? tY ? T R )
D

?AD ? ?G ? ?C ? ?G ? [-c?tY ? c (1 ? t ) ?Y ] ? ?G - c??tY ? t ?Y ? ? c?Y
0 1

? (1 ? c ) ?G ? c?Y

?Y ? ?AD ? (1 ? c)?G ? c?Y ?Y ?? ? ?1 ?G

FIGURE 10-3

Chapter 10

THE STRUCTURE OF THE IS-LM MODEL

32

Chapter 10

the IS-curve
?

NOTE:prices are still assumed to be fixed.

?

?

The IS curve /schedule shows combinations of interest rates and levels of output such that planned spending equals income. The investment demand schedule

I=I - bi, b ? 0
? ? ?

i: the interest rate, b:the responsiveness of investment spending to i. I* autonomous investment spending.

Chapter 10

The interest rate & AD: the IS curve
?

The goods market equilibrium

AD ? C ? I ? G ? NX C ? C ? cY
D D

AD ? C ? I ? G ? NX ? C ? cT R ? c(1- t)Y ? I - bi ? G ? NX ? C ? cT R ? I ? G ? NX ? c(1- t)Y - bi ? A ? c(1- t)Y - bi A ? C ? c T R ? I ? G ? NX

Y ? Y ? TA ? TR TA ? tY I=I - bi Y ? AD

Chapter 10

equilibrium: the IS curve
?

the IS curve

Y ? AD ? A ? c(1- t)Y - bi
0

?

The slope of the IS curve
(-negatively, why?)

A - bi Y ? ? ? ( A - bi ) 1 - c(1- t) 1 ? ? 1 - c(1- t)
0 G G

?

b

; multiplier

?Y ? -? b ?i
G

A Y i? ? b ?b
G

FIGURE 10-5A
DERIVATION OF THE IS CURVE

Chapter 10

36

FIGURE 10-5A DERIVATION OF THE IS CURVE

Chapter 10

37

Chapter 10

The position of the IS curve

A ? C ? cTR ? I ? G ? NX
?Y ? ? ?G
0 G

1 ? ? 1 - c(1- t) c ? ? 1 - c(1- t)
G TR

Chapter 10

?
? ?

The demand for real balances:

The money market & the LM curve L ? kY ? hi

The level of real , the interest rate (i) The parameters reflect the sensitivity L to Y&i.

k, h ? 0
M P

?

The supply of money . The Fed.

?

The LM curve (the money market in equilibrium)
s

M M ? P L ? kY ? hi,k , h ? 0
d

M ?L
s

d

M ? kY ? hi P 1 M i ? ( kY ? ) h P

FIGURE 10-9B DERIVATION OF THE LM CURVE

Chapter 10

40

FIGURE 10-9A DERIVATION OF THE LM CURVE

Chapter 10

41

Chapter 10

The slope & position of the LM curve
? ?

k larger & h smaller , LM steep k smaller & h larger, LM flat Shift: M ,

?

P

M ? kY ? hi P 1 M i ? ( kY ? ) h P

FIGURE 10-11

Chapter 10

GOODS AND MONEY MARKET EQUILIBRIUM

43

Chapter 10

Deriving the AD schedule (Y-P)
?

The AD maps out the IS-LM equilibrium holding autonomous spending & the nominal money supply constant & allowing prices to vary.

M ? kY ? hi P 1 M i ?

(kY ? ) h P

A - bi Y? ? ? ( A - bi ) 1 - c(1- t) 1 ? ? 1 - c(1- t)
0 G G

Figure 10-13a Derivation of the aggregate demand schedule

Chapter 10

45

FIGURE 10-13B DERIVATION OF THE AGGREGATE DEMAND SCHEDULE

Chapter 10

46

FIGURE 11-3 MONETARY POLICY
h bigger, LM flatter, I smaller, AD smaller ,Y smaller

Chapter 11

47

Figure 11-4 Effects Of An Increase In Government Spending

Chapter 11

48

Figure 11-5 Full Crowding Out

Chapter 11

49

Chapter 11 Figure 11-6 Monetary Accommodation Of Fiscal Expansion (policy mix)

50

Figure 11-7a An Investment Subsidy Shifts The Investment Schedule

Chapter 11

51

Chapter 11 Figure 11-8 Expansionary Policies And The Composition Of Output

52

The exchange rate in the long run
?
?

Chapter 12

PPP (purchasing power parity)
Two currencies are at purchasing power parity when a unit of domestic currency can buy the same basket of goods at home or abroad.

?

The real exchange rate (R )is the ratio of eP R= foreign to domestic prices, measured in P the same currency. (competitiveness)
f

Capital mobility
?
?

Chapter 12

?

?

(In the simplest world)Assumption: Perfect capital mobility : capital is perfectly mobile internationally when investors can purchase assets in any country the choose, quickly, with low transaction costs, and in unlimited amounts. external balance: when the balance of payments is close to balance. (losing or gaining reserves) Internal balance: when output is at the full employment level.

BP ? NX (Y , Y , R) ? CF (i ? i )
f f

Figure 12-4 Internal And External Balance Under Fixed Exchange Rates

Chapter 12

55

The Mundell-Fleming model:
?

Chapter 12

perfect capital mobility under fixed exchange rates

? ?

Monetary policy is powerless to affect output. Fiscal policy is highly effective under fixed exchange rates with complete capital mobility.

?

Perfect capital mobility & flexible exchange rate

Monetary policy is highly effective and fiscal policy is ineffective in changing output.

Figure 12-5

Monetary Expansion Under Fixed Rates And Perfect Capital Mobility Chapter 12

① Monetary Expansion ②LM→LM’ ③i↓④ CF↓(outflow) payments deficit ⑤ currency depreciate ⑥ intervention (buy home money) ⑦57


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