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Unformatted text preview: 1 28-1 Course Evaluation, Summary and Conclusions 28-2 Agenda Â¡ Course Evaluation Â¡ Summary Â¾ The IS-LM, DAD-SAS, and SGM together. Â¾ Macroeconomic Rules of Thumb. Â¡ Conclusions 28-3 Course Evaluation 28-4 Summary Â¡ Three models of economic activity: Â¾ The IS-LM model. Â¾ The DAD-SRAS model. Â¾ The Solow Growth model. 2 28-5 Summary Â¡ The IS-LM Model: Â¾ Short-run orientation. Â¾ Determination of Y and r. Â¾ Prices are exogenous. Â¾ Y can deviate from Y* in the short-run. Â¾ Adjustment mechanism is through inventory change and changes in r. 28-6 Summary Â¡ The DAD-SAS Model: Â¾ Medium-run orientation. Â¾ Determination of Y and ÊŒ . Â¾ Wage and price adjustment is sticky. Â¾ Y can deviate from Y* in the short-run but not in the intermediate-run. Â¾ Adjustment mechanism is through ÊŒ , changes in the real Ms, and r. 28-7 Summary Â¡ The Solow Growth Model: Â¾ Long-run orientation. Â¾ Determination of Y*/N, Y*, and y-dot. Â¾ Wages and prices are fully flexible. Â¾ Y does not deviate from Y* in the long run. Â¾ Adjustment mechanism is through adjustments in investment-per-worker and the capital-to- labor ratio....
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This note was uploaded on 07/29/2010 for the course UGBA 100b taught by Professor Wood during the Summer '10 term at Berkeley.
- Summer '10