Lecture_3_complete_version

Lecture_3_complete_version - Lecture 3 Measuring Macro...

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1 Lecture 3 Measuring Macro Performance: Short-term Economic Fluctuations
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2 Demand for Labour I MRP L = MP L * p • w = MRP L • MP L = w/p MP L (w/p)* (w/p) L L*
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3 Demand for Labour II Shifts along the demand curve for labour Changes in real wages (w/p) Shifts of the demand curve for labour – Change in worker productivity (MP L ) ↑ in MP L demand curve shifts right ↓ in MP L demand curve shifts left
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4 Bernanke et al, 2009
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5 Supply of Labour Supply of labour ↑ with the real wage. Reservation price of labour. Upward sloping curve Shifts along the supply curve for labour Changes in real wages (w/p) Shifts of the supply curve for labour Size of working age population Change in numbers actively seeking work
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6 Labour Market Equilibrium S L D L L (Employment) Real Wage L* w* Minimum wage w MIN Unemployment
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Globalisation and Real Wages w/p w/p L L D I D I D E D E S I S E Importing Industry Exporting Industry • Globalisation is associated with an increase in the amount of trade. • What is the impact on domestic real wages?
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This note was uploaded on 12/14/2010 for the course ECON 1002 taught by Professor Markmelatos during the Three '10 term at University of Sydney.

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Lecture_3_complete_version - Lecture 3 Measuring Macro...

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