ECON 295 - Class notess

ECON 295Â - Class notess - ECON295:Macroeconomics 21:07

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21:07 Growing labour force, growing capital stock growing productivity. Overall gdp growth  over the long-run (45 years).  Recession : GDP actually falls. 1982-83, 1991, 2009 (3 recessions). Depressions. Real GDP fluctuations around a rising trend : - the trend shows long-run eco. growth. - the short-run fluctuations show business cycle. Potential output is what the economy could produce if all resources were emplyed at  their normal levels of utilization. (full employment output) Output Gap measures the ≠ between potential and actual output. Output Gap = Y-Y*    Y*(potential GDP).  When Y<Y*, there is a recessionary gap Unemployment of factors of production When Y>Y*, there is an inflationary gap. We can have output above potential. By using resources very intensively. Output gap as a percentage of output GDP. Potential GDP has to be estimated never observed. (eco. Models). LABOUR FORCE= EMPLYED+UNEMPLOYED (OVER 15 and actively seeking for a  job). Real=Potential 
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This note was uploaded on 04/02/2012 for the course ECON 295 taught by Professor Ragan during the Spring '08 term at McGill.

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ECON 295Â - Class notess - ECON295:Macroeconomics 21:07

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