中级宏观is模型幻灯片ch03

2,MOTIVATING QUESTION,How is output determined in the short run? Output is determined by equilibrium in the goods market by the condition that supply equals demand. This condition always determines output, but in the short run, we assume that production adjusts automatically to output without changes in price. in the short run, output is effectively determined by demand. in this chapter, investment is exogenous (and therefore independent of the interest rate), so there is no need to consider simultaneous equilibrium in the goods and financial markets.,3,Introduction,One of the central questions in macroeconomics is why output fluctuates around its potential level In business cycle booms and recessions, output rises and falls relative to the trend of potential output This chapter offers a first theory of these fluctuations in real output relative to trend Cornerstone of this model is the mutual interaction between output and spending: spending determines output and income, but output and income also determine spending The Keynesian model of income determination develops the theory of AD Assume that prices do not change at all and that firms are willing to sell any amount of output at the given level of prices AS curve is flat,4,The Keynesian Cross,Keynes ：in the short run，an economys total income was determined largely by the spending plans of households, businesses, and government. Actual expenditure is the amount households, firms, and the government spend on goods and services Planned expenditure is the amount households, firms, and the government would like to spend on goods and services. actual expenditure differ from planned expenditure. Why? firms might engage in unplanned inventory investment because their sales do not meet their expectations,The Keynesian Crossa simple model,A simple closed economy model in which income is determined by expenditure. (due to J.M. Keynes) Notation: I = planned investment E = C + I + G = planned expenditure Y = real GDP = actual expenditure Difference between actual & planned expenditure = unplanned inventory investment,Elements of the Keynesian Cross,consumption function:,for now, planned investment is exogenous:,planned expenditure:,equilibrium condition:,govt policy variables:,actual expenditure = planned expenditure,Graphing planned expenditure,income, output, Y,E planned expenditure,Graphing the equilibrium condition,income, output, Y,E planned expenditure,45º,The equilibrium value of income,income, output, Y,E planned expenditure,E =Y,E =C +I +G,10,The Keynesian Crossmore details,11,3-1 The Composition of GDP,Consumption (C) refers to the goods and services purchased by consumers. Investment (I), sometimes called fixed investment, is the purchase of capital goods. It is the sum of nonresidential investment and residential investment. Government Spending (G) refers to the purchases of goods and services by the federal, state, and local governments. It does not include government transfers, nor interest payments on the government debt.,12,3-1 The Composition of GDP,Imports (IM) are the purchases of foreign goods and services by consumers, business firms, and the U.S. government. Exports (X) are the purchases of U.S. goods and services by foreigners.,13,3-1 The Composition of GDP,Inventory investment is the difference between production and sales.,Net exports (X IM) is the difference between exports and imports, also called the trade balance.,14,3-2 The Demand for Goods,The total demand for goods is written as:,The symbol “” means that this equation is an identity, or definition.,To determine Z, some simplifications must be made: Assume that all firms produce the same good, which can then be used by consumers for consumption, by firms for investment, or by the government.,15,3-2 The Demand for Goods,Assume that firms are willing to supply any amount of the good at a given price, P, and demand in that market. Assume that the economy is closed, that it does not trade with the rest of the world, then both exports and imports are zero. Under the assumption that the economy is closed, X = IM = 0, then:,16,3-2 The Demand for Goods,Disposable income, (YD), is the income that remains once consumers have paid taxes and received transfers from the government.,The function C(YD) is called the consumption function. It is a behavioral equation, that is, it captures the behavior of consumers.,Consumption (C),A more specific form of the consumption function is this linear relation:,17,3-2 The Demand for Goods,This function has two parameters, c0 and c1: c1 is called the (marginal) propensity to consume, or the effect of an additional dollar of disposable income on consumption. c0 is the intercept of the consumption function. Disposable income is given by:,Consumption (C),18,3-2 The Demand for Goods,Consumption (C),Consumption increases with disposable income but less than one for one.,19,3-2 The Demand for Goods,Variables that depend on other variables within the mo