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Unformatted text preview: 1 1 Short-Run Keynesian Model & Business Cycles Business Cycles Economic Fluctuations Economic Indicators The Recent Recession The Keynesian SR Model Aggregate Demand & Expenditure Equilibrium and 45 degree line/Keynesian cross analysis Multiplier Consumption, Saving, Investment 2 In the News? 3 Course Issues Clicker update / prize/ not registered ODE HW results Academic Dishonesty TOC Deadlines, etc. 2 4 About Business Cycles Economic Fluctuations rather than cycles irregular, not periodic 10 in post WWII NBER Average contraction 10 mos, expansion 57 mos Chronology: stock prices and other leading indicators 6-12 mos Decline in investment and aggregate demand Increase in inventories (unintended) Decline in gdp Decline in employment, prices, interest rates, profits, but generally not wages 5 Causes? Keynesian Demand shocks Investment related Propagated By Internal Dynamics multiplier accelerator model Shocks? Inappropriate monetary policy Financial Crises Supply-side/Technological Exogenous causes versus endogenous dynamics (multiplier accelerator) Discredited Business Cycle Theories Economic Waves Kitchin inventory 35 years Juglar fixed investment711 years Kuznets infrastructural investment 1525 years...
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- Spring '08