F. Business Cycle Facts
UCLA Winter 2008 Professor Mark Wright
In this section, you will learn
What is a business cycle? Facts about the business cycle How the short run differs from the long run Supply shocks and business cycles Readings: Chapter 8
What
Week 7
Kun
Keywords: IS-LM Model
IS - Goods Market Clearing
Y=C(Y-T) + I(r) + G
LM-Money Market Clearing
M/P = L(r,Y)
The downward-sloping IS curve summarizes this negative relationship between the interest rate
and income.
The upward-slopi
1. Along a short-run aggregate supply curve, output is related to unexpected movements in
the _. Along a Phillips curve, unemployment is related to unexpected movements
in the _.
A) price level; inflation rate
B) inflation rate; price level
C) unemploymen
Week 10
Kun
Keywords: Upward-sloping SRAS; Phillips Curve; Keynes consumption function; Inter-temporal
Choice Model
Upward-sloping SRAS
Implications:
P and Y are positively correlated
Expected price and price are positively correlated
Explanation:
Sti
Week 9
Kun
Keywords: Mindel-Fleming Model, Floating/fixed exchange rate
Mundell-Fleming Model: IS-LM model for a small open economy with perfect capital mobility
Key Assumptions
r=r*
P is fixed, so that there is a one to one change in real and nominal e
Practice Questions for Final Exam (Ch. 12, 13, 14, 16, and 18)
1. The most prominent feature of the U.S. economy in the 1970s was:
A) cost-push deflation.
B) cost-push inflation.
C) demand deflation.
D) demand inflation.
2. The inside lag is the time:
A)
The new definition of modern health is very different from the
traditional view, which was to reduce fat, sugar and sodium, said
Robert Kilmer, president of Nestl Dreyers Ice Cream, a division
of Nestl USA. Healthy now is about whats in my food and where
Important issues in macroeconomics
Macroeconomicsthe study of the economy as
a wholeaddresses many topical issues, e.g.:
What causes recessions? What is
government stimulus and why might it help?
How can problems in the housing market spread
to the rest
IN THIS CHAPTER, YOU WILL LEARN:
about the natural rate of unemployment:
what it means
what causes it
understanding its behavior in the real world
1
Natural rate of unemployment
Natural rate of unemployment:
The average rate of unemployment around
whi
IN THIS CHAPTER, YOU WILL LEARN:
the closed economy Solow model
how a countrys standard of living depends on its
saving and population growth rates
how to use the Golden Rule to find the optimal
saving rate and capital stock
1
Why growth matters
Data
IN THIS CHAPTER, YOU WILL LEARN:
What determines the economys total output/
income
How the prices of the factors of production are
determined
How total income is distributed
What determines the demand for goods and
services
How equilibrium in the goo
Lecture: All about GDP
Ma2 Hill
Measurement Issues
How do we decide whether the economy is
doing well or poorly?
How big is the economy?
Before WWII there were no staCsCcs to
measure the size of the whole economy
The Economy
GDP
Invented as
Week 6 TA Notes
Xuanyu(Iris) Fu
11-01-2016
Equations and Concepts
Open Economy-Loanable Funds market
(Y C T ) I + (T G) = N X
S private + S public I = N X
S private = Y T C
S public = T G
SN I = N X
expansionary fiscal policy at home, shift savings
Week 2 TA Notes
Xuanyu(Iris) Fu
10-04-2016
Housekeeping
Email: [email protected]
OH: Thursdays 11-12 and 4-5
Equations and Concepts
GDP Accounting
GDP: total market of newly produced final goods within a country in a year
Expenditure approach: GDP =
Business Cycle Theory 1
Winter 2008 UCLA Professor Mark Wright
0
Aggregate Demand I: Building the IS -LM Model
Winter 2008 UCLA Professor Mark Wright
1
In this section, you will learn
the IS curve, and its relation to
the Keynesian cross the loanable fu
Business Cycle Theory 2
Winter 2008 UCLA Professor Mark Wright
The IS -LM / AD-AS Model
Winter 2008 UCLA Professor Mark Wright
In this section, you will learn
how to use the IS-LM model to analyze the effects of shocks, fiscal policy, and monetary policy
Money Supply and Money Demand
UCLA Winter 2008 Professor Mark Wright
In this section, you will learn
how the banking system creates money three ways the Fed can control the money supply, and why the Fed cant control it precisely Theories of money demand
Global Studies One. Globalization: Markets
Summer Session C 2016, UCLA International Institute
Instructor: Siyu Cai
Email: [email protected]
Phone: 310-825-1071
Office: Bunche Hall A185
Office Hours: Tuesdays and Thursdays 11:05 am to 12:30 pm. Location to b
Week 3 TA Notes
Xuanyu(Iris) Fu
10-11-2016
Equations and Concepts
Classical Model
supply: Y = F (K, L)
cobb douglas form: Y = AK L1
constant returns to scale
diminishing marginal products
demand: Y = C + I + G
closed economy
Y, G, T given
C = c (Y
Week 10 TA Notes
Xuanyu(Iris) Fu
11-29-2016
Equations and Concepts
Mundell-Fleming Model
assume small open economy with perfect capital mobility
world interest rate r*
IS: Y = C(Y T ) + I(r ) + G + N X(e)
LM:
M
P
= L(r , Y )
exchange rate e on the Y-
Week 4 TA Notes
Xuanyu(Iris) Fu
10-17-2016
Equations and Concepts
Money
M oney(M S) = Currency(C) + Deposit(D)
M onetaryBase(B) = Current(C) + Reserve(R)
cr =
C
D
rr =
R
D
M
B
=
cr+1
cr+rr
ChangeInM =
1
rr
OriginalDeposit
M V =P Y
P ercentM + P er
Week 9 TA Notes
Xuanyu(Iris) Fu
11-22-2016
Equations and Concepts
Policy and shocks to the IS-LM Model
increase in goverment purchase IS curve shifts right and AD curve shifts right
decrease in taxes IS curve shifts to the right and AD curve shifts righ
Week 4
Kun
Quantity Theory of Money
Real Money Balance
Fisher Eect
Money Demand Function
whennominalinterestratesarehigher,thereisanincentivetoholdlessmoney.Ifpeopleareholdin
glessmoney,thenthedollarstheyareholdingwillbeusedmoreoftenandvelocitywillincre
Week 8 TA Notes
Xuanyu(Iris) Fu
11-15-2016
Equations and Concepts
IS-LM Model
IS Curve - Keynesian cross
P E = c(Y T) + I + G
Y = PE
Government-purchases multiplier:
Tax multiplier:
1
1M P C
M P C
1M P C
LM Curve - Money Market
Ms
P
=
Md
P
= L(r)
M
Week 7 TA Notes
Xuanyu(Iris) Fu
11-08-2016
Equations and Concepts
Growth Model contd
i = sf (k)
k = sf (k) k
MPK =
population growth
k = sf (k) ( + )k
MPK = +
technological progress and population growth
k = sf (k) ( + + g)k
MPK = + + g
Growth
Week 6
Kun
Keywords: Golden Rule, labor augmented growth; Aggregate demand
Golden Rule
Dierent saving rates generate dierent steady state, but which one has the highest consumption?
Labor Augmented Tech
Business Cycle I
In the long run: price will change
Modules 3 and 4: Solow growth model practice problems
Practice problems for the final exam
(The attached PDF file has better formatting.)
This posting gives sample final exam problems for the Solow growth model, which is explained in Chapters
3 and 4 of B