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Unformatted text preview: 1 The Aggregate Demand & Supply Model – SR and LR New Keynesian and New Classical (and monetarist) Fear boom and bust/krugman sing along, invest 0 What ’ s Doing in the News? Course Issues ¡ How/when to do assignments/hw ¡ Iclicker.com support/register NetID, serial number ¢ Smith not 123006789 and not [email protected] ¢ Can’t read serial number? ¡ Iclicker.com Support/find your id E ffi 202 N J H ll ¡ Econ office 202 New Jersey Hall ¡ Learning Resource Centers – bring sheet wi questions, have it signed, show me after class, get password, sign online form http://lrc.rutgers.edu/contact.shtml ¡ Excused Absence – see me after class for password ¡ ODE link on course home page ¡ Inv Game –round 0 3 2 SR (Keynesian) versus LR (Classical) ¡ “In the LR we are all dead” ¡ LR is ‘planning horizon’ – series of short-runs ¡ SR – expectations don’t change, prices (wages) ‘sticky’, frictions ¡ LR – no frictions, no stickiness – rational expectations ¡ Much current controversy due to differences/confusion about SR/LR Output (y), prices, unemployment, interest rates (i), inflation in SR (Keynesian Model)? ¡ Agg D&S -> P, y ¢ Real gdp = y ¢ y-> unemployment ¢ P and rate of change - inflation ¡ Md&Ms->r (interest rates) ¡ Agg D downward sloping ¡ P ↓→ M/P ↑→ r ↓→...
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This note was uploaded on 02/29/2012 for the course ECONOMICS 220:301 taught by Professor Sheflin during the Fall '09 term at Rutgers.
- Fall '09