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Unformatted text preview: 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. 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 π . 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 π , 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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This note was uploaded on 02/08/2011 for the course UGBA 101b taught by Professor Wilcox during the Summer '08 term at Berkeley.
- Summer '08