{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Lecture_10_2010_M - Intermediate Macroeconomics Bruce...

Info icon This preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Intermediate Macroeconomics Bruce Preston February 18, 2010 Today Revie of La or Suply La or market equili rium Determination of prices and quantities Determination of output La or Market Flo s La or Suply Each individual in the economy faces a la or-leisure choice Like rms, eigh up the costs and enets of suplying la or Benet: income earned Cost: forgone leisure Agregate la or suply is the sum of al individual la or suply decisions Important Determinants of La or Suply Real age: The amount of real income that a orker receives in e change for giving up a unit of leisure for ork T o important e ects arising from " w : Su stitution e ect: tendency for orkers to suply more la or Leisure is more costly Income e ect: tendency for orkers to suply les la or Because ealthier and leisure is hat is caled a normal god The La or Suply Curve Relates the amount of la or suplied to the curent age rate, holding al other factors constant. For e ample: Constant e pectations a out future wages La or suply curve maps the set of ( w; L s ) pairs: that is the optimal la or suplied at each posi le curent real age In the short run: primarily concerned ith the e ects of change in the curent real age Asume: su stitution e ect dominates La or suply curve up ard sloping Thinking A out Ta Policy Consider a ta reform that increases the marginal ta rate from zero to t What are the implications for equili rium employment and ages? Do your conclusions depend on hether the ta change is permanent or tem- porary? What Shifts La or Suply Factors a ecting the num er of hours orked Wealth E pected future ages Demographics Participation rate Ta es La or Market Equili rium La or market equili rium requires L d = L s Clasical analysis: asumes that the real age adjusts quickly to ensure equili rium Equili rium values of...
View Full Document

  • Spring '11
  • P
  • Macroeconomics, The Establishment, Keith number, Establishments Establishments Establishments Establishments, Establishments Establishments, Nonclassifiable Establishments, fishing Mining Construction

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern