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Unformatted text preview: 1 Short-Run Keynesian Model & Business Cycles Â¡ Business Cycles â€“ Economic Fluctuations Â¡ Economic Indicators Â¡ The Recent Recession 1 Â¡ The Keynesian SR Model Â¢ Aggregate Demand & Expenditure Â¢ Equilibrium and 45 degree line/Keynesian cross analysis Â¢ Multiplier Â¢ Consumption, Saving, Investment Â¢ Fiscal Policy In the News? 2 Designed by Foster & Partners, a firm known for feats of technological wizardry, the city, called Masdar, would be a perfect square, nearly a mile on each side, raised on a 23-foot-high base to capture desert breezes. Beneath its labyrinth of pedestrian streets, a fleet of driverless electric cars would navigate silently through dimly lit tunnels. The project conjured both a walled medieval fortress and an upgraded version of the Magic Kingdomâ€™s Tomorrowland. Course Issues Â¢ Gradebook Â¢ Consump Func Â¢ Clicker update / prize Â¢ Chat Rooms â€“ use them 3 them Â¢ ODE Â¢ Clicker reg Â¢ Investment Game Â¢ Resume 2 About Business Cycles Â¡ Economic Fluctuations rather than cycles â€“ irregular, not periodic Â¡ 10 in post WWII NBER Â¢ Average contraction 10 mos, expansion 57 mos Â¡ Chronology: Â¢ stock prices and other leading indicators 6-12 mos Â¢ Decline in investment and aggregate demand Â¢ Increase in inventories (unintended) Â¢ Decline in gdp 4 Â¢ Decline in employment, prices, interest rates, profits, but generally not wages Causes? Â¡ Keynesian â€“ Demand shocks â€“ Investment related Â¢ Propagated By Internal Dynamics â€“ multiplier accelerator model Â¡ Shocks? Â¢ Inappropriate monetary policy Â¢ Financial Crises Â¢ Supply-side/Technological Â¡ Exogenous causes versus endogenous dynamics 5 (multiplier accelerator) Â¡ Discredited Business Cycle Theories Economic Waves Â¢ Kitchin inventory 3â€“5 years Â¢ Juglar fixed investment7â€“11 years...
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This note was uploaded on 02/08/2011 for the course ECONOMICS 220:103 taught by Professor Sheflin during the Spring '08 term at Rutgers.
- Spring '08