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Unformatted text preview: 1 1 Short-Run Keynesian Model & Business Cycles Â¡ Business Cycles â€“ Economic Fluctuations Â¡ Economic Indicators Â¡ The Recent Recession Â¡ The Keynesian SR Model Â¢ Aggregate Demand & Expenditure Â¢ Equilibrium and 45 degree line/Keynesian cross analysis Â¢ Multiplier Â¢ Consumption, Saving, Investment 2 In the News? 3 Course Issues Â¢ Clicker update / prize/ not registered Â¢ ODE Â¢ HW results Â¢ Academic Dishonesty Â¢ TOC Â¢ Deadlines, etc. 2 4 About Business Cycles Â¡ Economic Fluctuations rather than cycles â€“ irregular, not periodic Â¡ 10 in post WWII NBER Â¢ Average contraction 10 mos, expansion 57 mos Â¡ Chronology: Â¢ stock prices and other leading indicators 6-12 mos Â¢ Decline in investment and aggregate demand Â¢ Increase in inventories (unintended) Â¢ Decline in gdp Â¢ Decline in employment, prices, interest rates, profits, but generally not wages 5 Causes? Â¡ Keynesian â€“ Demand shocks â€“ Investment related Â¢ Propagated By Internal Dynamics â€“ multiplier accelerator model Â¡ Shocks? Â¢ Inappropriate monetary policy Â¢ Financial Crises Â¢ Supply-side/Technological Â¡ Exogenous causes versus endogenous dynamics (multiplier accelerator) Â¡ Discredited Business Cycle Theories Economic Waves Â¢ Kitchin inventory 3â€“5 years Â¢ Juglar fixed investment7â€“11 years Â¢ Kuznets infrastructural investment 15â€“25 years...
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- Spring '08
- Macroeconomics, Keynesian economics, analysis Multiplier Consumption, Short-Run Keynesian Model