Macro3_LecturePPT_Ch09.ppt - Part 3 The Short Run Media...

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The Short Run Part 3: Media Slides Created By Dave Brown Penn State University
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Chapter 9 An Introduction to the Short Run Charles I. Jones
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9.1 Introduction In this chapter, we learn: How the gap between actual GDP and potential GDP is a key measure of the economy’s performance in the short run. How costly fluctuations in economic activity can be. The relationship between output and inflation. A simple version of the short-run model that will help us understand these patterns.
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The long-run model is a guide to how the economy behaves on average. At any given time, the economy is unlikely to exactly equal the long-run average.
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9.2 The Long Run, the Short Run, and Shocks The long-run model: Determines potential output and long-run inflation. The short-run model: Determines current output and current inflation.
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9.2 The Long Run, the Short Run, and Shocks Potential output The amount the economy would produce if all inputs were utilized at their long-run sustainable levels
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In the short-run model The current level of output and the current inflation rate are endogenous . Current output may deviate 脱离 from potential output because of economic shocks.
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In the short-run model: We assume that the long run is a given. Potential output and the long-run inflation rate are exogenous
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Trends and Fluctuations Output is equal to the long-run trend plus short-run fluctuations: The long-run trend is potential output. The short-run fluctuations are the percentage change of deviations from potential GDP.
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Short-run fluctuation – The difference in actual and potential output, expressed as a percentage of potential output – Referred to as “detrended 偏离趋势的产出 output” or short-run output: Ybar 是一 个百分比
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Short-Run Output in the United States Fluctuations in U.S. GDP:
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