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006 Ch7 class notes

006 Ch7 class notes - Chapter 7 Economic Growth I Capital...

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10/27/2010 1 slide 0 Chapter 7 CHAPTER 7 Economic Growth I Economic Growth I: Capital Accumulation and Population Growth slide 1 What we have done so far? Ch 9: Short run fluctuations. Quantity Theory, AD AS Model (fixed prices, closed economy) Ch 3: Long run determination of constant output and income distribution (fixed supply of labor and capital, constant technology, flexible prices, zero growth in the long run). Market for loanable funds. (closed economy) Ch 4: Long run determination of prices and interest rate Quantity Theory and Fisher Equation (constant output and flexible prices) (closed economy) Ch 10 : Short run fluctuations: IS-LM Model (Keynesian Cross Model, theory of liquidity Preferences) (closed economy) Ch 11: Short run and long run determination of output and prices. IS-LM and AD-AS Model (fixed prices in the short run, flexible prices and constant output in the long run) (closed economy) CHAPTER 7 Economic Growth I slide 2 CHAPTER 7 Economic Growth I The menu for this chapter Closed economy (same as in Chapter 3) Long run (flexible prices) (same as in Chapter 3) Supply of labor and capital is not constant Technology is constant (same as in Chapter 3) Output is not constant in the long run (Output is growing, so thus consumption and private saving) Cobb douglas production function (same as in Chapter 3)
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