10-01-12-macromodel

10-01-12-macromodel - ClearingOfTheLaborMarket

Info iconThis preview shows pages 1–5. Sign up to view the full content.

View Full Document Right Arrow Icon
Clearing Of The Labor Market Assuming That Wages Are Flexible, Then  Everyone Who Wants A Job At The  Prevailing Wage Can Obtain One. With Stable Loci For Demand And Supply  Of Labor, Output Is Stable For This Labor- Market-Clearing Economy. Ignoring The Interest-Rate Effect Which  Williamson Includes, Y s  = Y 0
Background image of page 1

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

View Full DocumentRight Arrow Icon
The Demand Structure Of A Simple  Closed Economy Looking At the Goods Market S + T – I – G = 0 S = a + (1-b)∙Y d  -c∙(w-p) – T C = a + b∙Y d  + c∙(w-p) I = I 0  – h∙r T = T 0 G = G 0 A Favorite Value For The Parameter c Is 250. For Williamson, c = 0.
Background image of page 2
The Supply Side Y s  = Y 0  + e∙r For Most Of Our Analysis We Will Assume  That The Value Of The Parameter e Is  Zero. Y s  = Y d  = Y = Y 0
Background image of page 3

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

View Full DocumentRight Arrow Icon
The Money Market m d  = p + m d 0  + .001∙Y –  l ∙r m s  = m s T m s  = m
Background image of page 4
Image of page 5
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 / 19

10-01-12-macromodel - ClearingOfTheLaborMarket

This preview shows document pages 1 - 5. Sign up to view the full document.

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