This preview shows pages 1–3. Sign up to view the full content.
This preview has intentionally blurred sections. Sign up to view the full version.View Full Document
Unformatted text preview: 1 The Aggregate Demand & Supply Model SR and LR How did the financial crisis of 2007 lead to the recession of 2007-2009? Financial shock - Housing bubble bursts Bank and shadow bank assets fall, uncertain value, high leverage erodes capital, fear, uncertainty cause bank-run inability to roll over short term financing used for long-term positions Lending slows/stops business problems Wealth falls housing prices, stock prices Fall in aggregate demand C, I down Amplified domestically and internationally What s Doing in the News? 2 Course Issues 9/15 last day to add/drop Last Thursday clicks dont count Images, chat rooms, how to do hw Iclicker.com support/register NetID, serial # Smith not 123006789 Smith not 123006789 Cant read serial number Support/find your id Learning Resource Centers http://lrc.rutgers.edu/contact.shtml 1 point (of 1000) EC signed question sheet ODE 4 SR (Keynesian) versus LR (Classical) In the LR we are all dead...
View Full Document
This note was uploaded on 02/20/2012 for the course 220 301 taught by Professor Carlshu-minglin during the Fall '10 term at Rutgers.
- Fall '10