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Unformatted text preview: 1 Short-Run Keynesian Model & Business Cycles Business Cycles Economic Fluctuations Economic Indicators The Recent Recession 1 The Keynesian SR Model Aggregate Demand & Expenditure Fiscal Policy Multipliers Consumption, Saving, Investment In the News? 2 Designed by Foster & Partners, a firm known for feats of technological wizardry, the city, called Masdar, would be a perfect square, nearly a mile on each side, raised on a 23-foot-high base to capture desert breezes. Beneath its labyrinth of pedestrian streets, a fleet of driverless electric cars would navigate silently through dimly lit tunnels. The project conjured both a walled medieval fortress and an upgraded version of the Magic Kingdoms Tomorrowland. Course Issues Gradebook/ P-NP Consump Func Clicker update / prize Chat Rooms use them 3 them ODE Clicker reg Investment Game Resume 2 About Business Cycles Economic Fluctuations rather than cycles irregular, not periodic 10 in post WWII NBER Average contraction 10 mos, expansion 57 mos Chronology: stock prices and other leading indicators 6-12 mos Decline in investment and aggregate demand Increase in inventories (unintended) Decline in gdp 4 Decline in employment, prices, interest rates, profits, but generally not wages Causes? Keynesian Demand shocks Investment related Propagated By Internal Dynamics multiplier accelerator model Shocks? Inappropriate monetary policy Financial Crises Supply-side/Technological Exogenous causes versus endogenous dynamics 5 (multiplier accelerator) Discredited Business Cycle Theories Economic Waves Kitchin inventory 35 years Juglar fixed investment711 years Kuznets infrastructural investment 1525 years Kondratiev wave 4560 years...
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