10-09-20-Saving And Wealth-c (1) (1)-a0

10-09-20-Saving And Wealth-c (1) (1)-a0 -...

Info iconThis preview shows pages 1–10. Sign up to view the full content.

View Full Document Right Arrow Icon
More General Saving Function Folder Number:  2 Presented:  Sep 20 Relevance:  These Slides Present The  General Form Of The Saving Function,  Covering All Cases We Will Deal With In  This Course. Expected:  To Be Revised.
Background image of page 1

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

View Full DocumentRight Arrow Icon
Shifts In Curves We Have Assumed That The Saving  Function Is Of The Form: S(Y) = -30 + S + .2∙Y Where S 0  = 0 What Would Happen To This Figure If S 0   Had A Value Of -10 (Instead Of 0)? Since It Is The Vertical Intercept Which  Has A Larger (In Absolute Value) Negative  Value, The Curve Has Shifted Down By 
Background image of page 2
Shifts In Curves, Continued If The Intercept Had Been -20, That Would  Appear As A Shift Up In The Locus.  This  Occurs When S 0  = +10. When S 0  = +10 We Have A Curve That  Has Shifted  UP  (From The Benchmark  Situation (Which Is Pictured In Blue))By $  10 Billion/Year
Background image of page 3

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

View Full DocumentRight Arrow Icon
Shifts In Curves, Concluded If The Intercept Had Been -40, That Would  Appear As A Shift Down In The Locus. When S 0  = -10 We Have A Curve That  Has Shifted  DOWN  (From The Benchmark  Situation (Which Is Pictured In Blue))By $  10 Billion/Year
Background image of page 4
Same Shifts In Curves If We Had Shifted The Locus From Its  Original Position (Shown In  Blue ) And  Moved It To The Left By  50  Billion Dollars  Per Year, The Locus Would End Up In  The Position Shown As  Red . If We Had Shifted The Locus From Its  Original Position (Shown In  Blue ) And  Moved It To The Right By 50 Billion  Dollars Per Year, The Locus Would End  Up In The Position Shown As  Green .
Background image of page 5

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

View Full DocumentRight Arrow Icon
S Y 200 150 100 -20 -30 -40 S S’ S” S  S 0  = 0 Blue Bench mark S’ S 0  =  +10 Red Shifted  Up By  10 S” S 0  = -10 Green Shifted  Down  By 10 S = a + .2·Y
Background image of page 6
S Y 200 150 100 -20 -30 -40 S S’ S” S S 0  = 0 Blue Bench mark S’ S 0  =  +10 Red Shifted  Left By  50 S” S 0  = -10 Green Shifted  Right By  50 S = a + .2·Y
Background image of page 7

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

View Full DocumentRight Arrow Icon
General Saving Function It Is Important For Our Open Economy  Macro Analysis To Have A More General  Specification Of The Saving Function. We Assume That Saving Depends Upon  Not Just Current Income, But On Wealth  As Well. Our View Is That The Wealthier Someone  Is, For A Given Level Of Income, The Less  That Individual Saves.
Background image of page 8
Real Variables Are Measured In Terms Of  Goods And Services. Nominal Variables Are Measured In Dollar 
Background image of page 9

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

View Full DocumentRight Arrow Icon
Image of page 10
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 07/16/2011 for the course ECON 2154 taught by Professor Boyer during the Winter '10 term at UWO.

Page1 / 32

10-09-20-Saving And Wealth-c (1) (1)-a0 -...

This preview shows document pages 1 - 10. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online