28 Summary and Conclusions

28 Summary and Conclusions - Agenda Course Evaluation...

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1 28-1 Course Evaluation, Summary and Conclusions 28-2 Agenda Course Evaluation Summary ¾ The IS-LM, DAD-SAS, and SGM together. ¾ Macroeconomic Rules of Thumb. Conclusions 28-3 Course Evaluation 28-4 Summary Three models of economic activity: ¾ The IS-LM model. ¾ The DAD-SRAS model. ¾ The Solow Growth model.
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2 28-5 Summary The IS-LM Model: ¾ Short-run orientation. ¾ Determination of Y and r. ¾ Prices are exogenous. ¾ Y can deviate from Y* in the short-run. ¾ Adjustment mechanism is through inventory change and changes in r. 28-6 Summary The DAD-SAS Model: ¾ Medium-run orientation. ¾ Determination of Y and ʌ . ¾ Wage and price adjustment is sticky. ¾ Y can deviate from Y* in the short-run but not in the intermediate-run. ¾ Adjustment mechanism is through ʌ , changes in the real Ms, and r. 28-7 Summary The Solow Growth Model: ¾ Long-run orientation. ¾ Determination of Y*/N, Y*, and y-dot. ¾ Wages and prices are fully flexible. ¾ Y does not deviate from Y* in the long run. ¾ Adjustment mechanism is through adjustments in investment-per-worker and the capital-to- labor ratio.
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