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Unformatted text preview: 1 28-1 Course Evaluation, Summary and Conclusions 28-2 Agenda Course Evaluation Summary The IS-LM, DAD-SAS, and SGM together. Macroeconomic Rules of Thumb. Conclusions 28-3 Course Evaluation 28-4 Summary Three models of economic activity: The IS-LM model. The DAD-SRAS model. The Solow Growth model. 2 28-5 Summary The IS-LM Model: Short-run orientation. Determination of Y and r. Prices are exogenous. Y can deviate from Y* in the short-run. Adjustment mechanism is through inventory change and changes in r. 28-6 Summary The DAD-SAS Model: Medium-run orientation. Determination of Y and . Wage and price adjustment is sticky. Y can deviate from Y* in the short-run but not in the intermediate-run. Adjustment mechanism is through , changes in the real Ms, and r. 28-7 Summary The Solow Growth Model: Long-run orientation. Determination of Y*/N, Y*, and y-dot. Wages and prices are fully flexible. Y does not deviate from Y* in the long run. Adjustment mechanism is through adjustments in investment-per-worker and the capital-to- labor ratio....
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- Summer '10