MACROECONOMICS-CH19

Class Slides for EC 204 To Accompany Chapter 19

Learning objectives ,[object Object],[object Object],[object Object]

The Theory of Real Business Cycles ,[object Object],[object Object],[object Object],[object Object],[object Object]

The economics of Robinson Crusoe ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Shocks in the Crusoe island economy ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Economic fluctuations as optimal responses to shocks ,[object Object],The shocks aren’t always desirable. But once they occur, fluctuations in output, employment, and other variables are the optimal responses to them.

The debate over RBC theory ,[object Object],[object Object],[object Object],[object Object],[object Object]

The labor market ,[object Object],[object Object],where W 1 is the wage in period 1 (the present) and W 2 is the wage in period 2 (the future). (1+r)W 1 / W 2

The labor market ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Technology shocks ,[object Object],[object Object],[object Object]

The Solow residual and growth in output Year Output growth Solow residual 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 1945 10 8 6 4 2 0 -2 -4 Percent per year

Technology shocks ,[object Object],[object Object]

Productivity shocks ,[object Object],[object Object],[object Object]

The neutrality of money ,[object Object],[object Object],[object Object]

The flexibility of wages and prices ,[object Object],[object Object],[object Object],[object Object]

New Keynesian Economics ,[object Object],[object Object],[object Object]

Small menu costs and aggregate-demand externalities ,[object Object],[object Object],[object Object]

Small menu costs and sticky prices ,[object Object],[object Object],[object Object]

Recessions as coordination failure ,[object Object],[object Object],[object Object]

The staggering of wages and prices ,[object Object],[object Object],[object Object]

Top reasons for sticky prices: results from surveys of managers ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Inflation Inertia ,[object Object],[object Object],[object Object],[object Object]

Inflation Inertia ,[object Object],[object Object],[object Object],[object Object],[object Object]

Conclusion: the frontiers of research ,[object Object],[object Object],[object Object]

Chapter summary ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Chapter summary ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

MACROECONOMICS-CH19

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