曼昆宏观经济学第七版英文课件第八章
曼昆的宏观经济学课件(英文版)
2000
CHAPTER 1 The Science of Macroeconomics
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Interest rates and mortgage payments
For a $150,000 30-year mortgage:
date
actual rate on 30-year mortgage
U.S. Gross Domestic Product
in billions of chained 1996 dollars
10,000 9,000
longest economic expansion on record
8,000
7,000
6,00R0 ecessions
5,000
4,000
3,000 1970
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Important issues in macroeconomics
▪ What is the government budget deficit?
How does it affect the economy?
▪ Why does the U.S. have such a huge trade
Unemployment and social problems
CHAPTER 1 The Science of Macroeconomics
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Unemployment and social problems
Each one-point increase in the unemployment rate is associated with:
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%
Unemployment and earnings growth
曼昆宏观经济学第七版英文课件第八章
Consists of: k to replace depreciating capital
n k to provide capital for new workers g k to provide capital for the new “effective”
CHAPTER 8
Economic Growth II
5
Technological progress in the Solow model
We now write the production function as:
where L ×E = the number of effective workers. Increases in labor efficiency have the
If true, then the income gap between rich & poor
countries would shrink over time, causing living standards to “converge.”
In real world, many poor countries do NOT grow
CHAPTER 8Fra bibliotekEconomic Growth II
3
Examples of technological progress
From 1950 to 2000, U.S. farm sector productivity
曼昆宏观经济学全部课件
预期通货膨胀的成本:
4. 不公平的税收待遇 •例如:资本利得税.
• 1/1/2001: 购买 $10,000 的股票 • 12/31/2001: 以 $11,000卖出所有股票,获得 名义资本利得 $1000 (10%). • 假设 = 10% in 2001. 实际资本利得为 $0. • 但依据税法，必须以$1000的资本利得缴税!!
超速通货膨胀
• 定义: 50% / 每月
• 前面所讲述的所有的通货膨胀带来的成本都
将变得巨大.
• 货币将失去其作为价值储藏的作用，也可能 失去其他功能 (计价单位，交易媒介). • 人们可能采取实物交易形式，或借助更稳定 的外币来完成交易.
超速通货膨胀的原因?
• 超速通货膨胀是由于货币供给的过度增 长. • 当中央银行印刷钞票，价格水平将上升. • 如果印发钞票的速度过快，就有可能导 致超速通货膨胀.
各国通货膨胀和名义利率
100 Nom ina l inte re st rate (per ce nt, loga rithm ic sc ale) Italy Franc e 10 Nige ria United Kingdom United States J apan Germany Singapore 1 10 100 1000 Inflation ra te (pe rc ent, logar ithm ic sc ale) Kazak hstan Kenya Uruguay Armenia
ADVANCED
MACROECONOMICS
LOGO
学习要点
• 通货膨胀的古典理论 – 原因 – 影响 – 社会成本 • ―古典” —— 假设价格具有弹性 ， 并且市场出清。 • 应用于长期研究
曼昆《经济学原理》(宏观经济学分册)英文原版PPT课件-23
THE MEASUREMENT OF GROSS DOMESTIC PRODUCT
• “. . . Produced . . .”
– It includes goods and services currently produced, not transactions involving goods produced in the past.
© 2007 Thomson South-Western
THE MEASUREMENT OF GROSS DOMESTIC PRODUCT
• “GDP is the Market Value . . .”
– Output is valued at market prices.
• “. . . Of All. . .”
FIRMS •Produce and sell goods and services •Hire and use factors of production
HOUSEHOLDS •Buy and consume goods and services •Own and sell factors of production
THE COMPONENTS OF GDP
• GDP includes all items produced in the economy and sold legally in markets. • What Is Not Counted in GDP?
– GDP excludes most items that are produced and consumed at home and that never enter the marketplace. – It excludes items produced and sold illicitly, such as illegal drugs.
昆曼围观经济学原理英文课件第八章
A PB B D C E
S
PS
F
D
QT
© 2015 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
P
A PB B D C E
S
PS
F
D
QT
QE
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The Effects of a Tax
P
C + E is called the deadweight loss (DWL) of the tax, the fall in total surplus that results from a market distortion, such as a tax.
Wojciech Gerson (1831-1901)
Economics
Principles of
In this chapter, look for the answers to these questions
• How does a tax affect consumer surplus,
producer surplus, and total surplus?
Review from Chapter 6
A tax drives a wedge between the price buyers pay and the price sellers receive. raises the price buyers pay and lowers the price sellers receive. reduces the quantity bought & sold. These effects are the same whether the tax is imposed on buyers or sellers, so we do not make this distinction in this chapter.
曼昆《经济学原理》(宏观经济学分册)英文原版PPT课件
THE COMPONENTS OF GDP • GDP includes all items produced in the economy and sold legally n markets. • What Is Not Counted in GDP?
– Every transaction has a buyer and a seller. – Every dollar of spending by some buyer is a dollar of income for some seller.
© 2007 Thomson South-Western
Y = C + I + G + NX
© 2007 Thomson South-Western
THE COMPONENTS OF GDP • Consumption (C):
• The spending by households on goods and services, with the exception of purchases of new housing. • Investment (I):
© 2007 Thomson South-Western
Table 2 Real and Nominal GDP
© 2007 Thomson South-Western
Table 2 Real and Nominal GDP
© 2007 Thomson South-Western
Table 2 Real and Nominal GDP
• “. . . Final . . .” – It records only the value of final goods, not intermediate goods (the value is counted only once).
曼昆经济学原理英文课件Chap08
Price sellers receive
Size of tax (T)
Supply
Quantity sold (Q)
0
Quantity Quantity
with tax without tax
Demand
Quantity
Harcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc.
It does not matter whether a tax on a good is levied on buyers or sellers of the good…the price paid by buyers rises, and the price received by sellers falls.
Tax Distortions and Elasticities...
Price
(d) Elastic Demand Supply
Size of tax
0
When demand is relatively elastic, the deadweight loss of a tax is large.
How a Tax Affects Welfare...
Price
Tax reduces consumer surplus by (B+C) and producer surplus by (D+E)
Price
buyers
A
pay = PB
Tax revenue = (B+D) Supply
Price
Size of tax
Supply
第七版-曼昆宏观经济学课件
18
两部门国民收入流量循环图
生产要素市场
Y
工资，租金，利息，利润
家 庭 储蓄 金融机构 投资 企 业
S
I
购买各种产品和劳务
C 商品市场
总收入
2019/12/31
C+S =Y= C+I
总支出
19
三部门国民收入流量循环图
TR
G
政府
TA1 Y
TA2
家庭 S
金融机构 I
总
收 入
C
C+S+（TA-TR）= Y = C+I+G
5) GDP 是一国范围内生产的最终产品和 劳务的市场价值。
6) GDP一般仅指市场活动导致的价值。
2019/12/31
6
3.名义的GDP和实际的GDP
1) 名义的GDP(Nominal GDP)
以一定时期市场价格表示的国内生产
总值，称作该时期的名义的GDP。
2) 实际的GDP(Real GDP)
3. 国民收入(NI)National Income NI = NDP-间接税-企业转移支付+政府补贴
4.个人收入(PI)Personal Income PI=NI-公司未分配利润-公司所得税-社会保险
税+政府对个人的转移支付 5. 个人可支配收入(PDI)
Personal Disposable Income PDI = PI - 个人所得税
2019/12/31
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部门法
一块面包的GDP的部门法核算
生产部门
市场价值（元） 附加价值（元）
农资公司（种子化肥）
0.10
0.10
农场（种小麦）
曼昆《经济学原理》(宏观经济学分册)英文原版PPT课件——29monetary_system
Copyright © 2004 South-Western
The Functions of Money • Unit of Account
• A unit of account is the yardstick people use to post prices and record debts.
Copyright © 2004 South-Western
The Fed’s Organization • The Federal Reserve System is made up of the Federal Reserve Board in Washington, D.C., and twelve regional Federal Reserve Banks.
The Fed’s Organization • The Federal Reserve Banks
• The New York Fed implements some of the Fed’s most important policy decisions.
pyright © 2004 South-Western
• That is $2,734 in currency per adult.
• Who is holding all this currency?
• Currency held abroad • Currency held by illegal entities
Copyright © 2004 South-Western
Copyright © 2004 South-Western
The Fed’s Organization • The Federal Open Market Committee (FOMC) is made up of the following voting members:
布兰查德宏观经济学第七版第7版英文版chapter (8)
Macroeconomics, 7e (Blanchard)Chapter 8: The Phillips Curve, the Natural Rate of Unemployment, and Inflation8.1 Inflation, Expected Inflation, and Unemployment1) In which of the following periods was the relationship between the U.S. unemployment rate and U.S. inflation rate unstable?A) 1901 to 1909B) 1911 to 1919C) 1921 to 1929D) 1931 to 1939E) none of the aboveAnswer: DDiff: 22) In the Phillips curve equation, which of the following will cause an increase in the current inflation rate?A) an increase in the expected inflation rateB) a reduction in the unemployment rateC) an increase in the markup, mD) all of the aboveE) none of the aboveAnswer: DDiff: 23) Data for which country were first used to illustrate the relationship between unemployment and inflation (i.e., the original Phillips curve)?A) FranceB) United StatesC) CanadaD) GermanyE) none of the aboveAnswer: EDiff: 14) Which of the following individuals first discovered the relationship between unemployment and inflation?A) SolowB) SamuelsonC) FriedmanD) PhillipsAnswer: DDiff: 15) Which of the following individuals first discovered the relationship between unemployment and inflation for the United States?A) Solow and FriedmanB) Samuelson and SolowC) Friedman and PhillipsD) Friedman and PhelpsAnswer: BDiff: 16) Explain what is meant by the "wage-price" spiral.Answer: The wage-price spiral refers to the effects of low unemployment on inflation. Specifically, when the unemployment rate falls, the nominal wage will rise. As W rises, firms' costs increase causing them to increase prices. As prices rise, workers will later ask for increases in the nominal wage. This increase in W again causes firms' costs and prices to rise and the process repeats itself.Diff: 17) Based on the 'early incarnation' of the Phillips curve, explain what effect an increase in the unemployment rate will have on the inflation rate.Answer: An increase in u will cause a reduction in W. As W falls, firms' costs fall. As firms' costs fall, they will reduce the price level. This reduction in the price level represents, in this case, deflation.Diff: 28.2 The Philips Curve and Its Mutations1) Since approximately 1970, the most stable Phillips-type relationship for the United States has been between which of the following?A) the rate of inflation and the change in the unemployment rateB) the unemployment rate and the change in the rate of inflationC) the change in the unemployment rate and the change in the rate of inflationD) the inverse of the unemployment rate and the rate of inflationE) the unemployment rate and the rate of inflationAnswer: BDiff: 22) Which of the following assumptions best characterized the assumption about how individuals formed expectations of inflation by the early 1970s?A) Expected inflation for the current year was smaller than the previous year's inflation rate.B) Expected inflation for the current year was approximately equal to the previous year's inflation rate.C) Expected inflation for the current year was less than the previous year's inflation rate.D) Expected inflation for the current year equal to the average inflation rate over the past five years.E) Expected inflation for the current year equal to the average inflation rate over the past ten years.Answer: BDiff: 23) When inflation has not been very persistent, as was the case in the United States before the mid-1960s, we can expect thatA) the expected price level for a given year will equal the previous year's actual price level.B) the current inflation rate will not depend heavily on past years' inflation rates.C) lower unemployment rates will be associated with higher inflation rates.D) all of the aboveE) none of the aboveAnswer: DDiff: 24) When inflation has been persistent, as was the case in the United States during the 1970s, low unemployment rates will likely be associated withA) low natural rates of unemployment.B) high natural rates of unemployment.C) low but stable rates of inflation.D) high but stable rates of inflation.E) increases in the inflation rate.Answer: EDiff: 25) For this question, assume that individuals form expectations of inflation according to the following equation πe t= θπt-1. From 1970 on, the value of θ for this equationA) increased over time and approached 1.B) decreased over time and approached zero.C) remained constant at zero.D) remained constant at negative one.E) none of the aboveAnswer: ADiff: 26) For this question, assume that the Phillips curve equation is represented by the following equation:πt - πt-1 = (m + z) - αu t. A reduction in the unemployment rate will causeA) a reduction in the markup over labor costs (i.e., a reduction in m).B) an increase in the markup over labor costs.C) an increase in the inflation rate over time.D) a decrease in the inflation rate over time.E) none of the aboveAnswer: DDiff: 27) For this question, assume that the expected rate of inflation is a function of past year's inflation. Also assume that the unemployment rate has greater than the natural rate of unemployment for a number of years. Given this information, we know thatA) the rate of inflation will approximately be equal to zero.B) the rate of inflation should neither increase nor decrease.C) the rate of inflation should steadily increase over time.D) the rate of inflation should steadily decrease.E) the inflation rate will be approximately equal to the natural rate of unemployment. Answer: DDiff: 28) The original Phillips curve implied or assumed thatA) the markup over labor costs was zero.B) the expected rate of inflation would be zero.C) the actual and expected rates of inflation would always be equal.D) all of the aboveE) none of the aboveAnswer: BDiff: 29) For this question, assume that the Phillips curve equation is represented by the following equation:πt - πt-1 = (m + z) - αu t. Given this information, the natural rate of unemployment will be equal toA) m + z.B) (m + z - α).C) α(m + z).D) 0.E) none of the aboveAnswer: EDiff: 210) For this question, assume that the Phi llips curve equation is represented by the following: πt - πt-1 = (m + z) - αu t. Which of the following will cause a reduction in the natural rate of unemployment?A) an increase in mB) an increase in zC) an increase in αD) an increase in actual inflationE) an increase in expected inflationAnswer: CDiff: 211) For this question, assume that the Phillips curve equation is represented by the following: πt - πt-1 = (m + z) - αu t. Which of the following will not cause an increase in the natural rate of unemployment?A) a reduction in mB) a reduction in zC) an increase in αD) an increase in the expected rate of inflationE) all of the aboveAnswer: DDiff: 212) Use the following Phillips curve equation to answer this question: πt - πt-1 = (m + z) - αu t. Which of the following will cause an increase in the natural rate of unemployment?A) a reduction in mB) an increase in zC) an increase in αD) a reduction in expected inflationE) none of the aboveAnswer: BDiff: 213) In which of the following decades did the Phillips curve break down for the U.S.?A) 1940sB) 1950sC) 1960sD) none of the aboveAnswer: DDiff: 114) Assume that expected inflation is based on the following: πe t= θπt-1. An increase in θ will causeA) an increase in the natural rate of unemployment.B) a reduction in the natural rate of unemployment.C) no change in the natural rate of unemployment.D) inflation in period t to be more responsive to changes in unemployment in period t. Answer: CDiff: 215) Assume that expected inflation is based on the following: πe t= θπt-1. If θ = 0, we know thatA) a reduction in the unemployment rate will have no effect on inflation.B) low rates of unemployment will cause steadily increasing rates of inflation.C) high rates of unemployment will cause steadily declining rates of inflation.D) the Phillips curve illustrates the relationship between the level of inflation rate and the level of the unemployment rate.Answer: DDiff: 216) Assume that expected inflation is based on the following: πe t= θπt-1. If θ = 1, we know thatA) a reduction in the unemployment rate will have no effect on inflation.B) low rates of unemployment will cause steadily increasing rates of inflation.C) the actual unemployment rate will not deviate from the natural rate of unemployment.D) the Phillips curve illustrates the relationship between the level of inflation rate and the level of the unemployment rate.Answer: BDiff: 217) Suppose policy makers underestimate the natural rate of unemployment. In a situation like this, policy makers might implement a policy thatA) attempts to maintain output below the natural level of output.B) results in deflation.C) both A and BD) results in steadily rising inflation.Answer: DDiff: 218) During which decade did the original Phillips curve break down? Also, briefly explain why the original Phillips curve broke during this period.Answer: The original Phillips curve broke down in the United States in the 1970s. First, the United States was affected by oil shocks that would cause an increase in both inflation and the unemployment rate. Second, individuals changed the way they formed expectations of prices. Rather than assume that this year's price level would be equal to last year's price level (i.e., zero expected inflation), individuals started to assume that previous inflation would persist.Diff: 219) Explain how the original Phillips curve differs from the expectations-augmented Phillips curve (or the modified, or accelerationist Phillips curve).Answer: The original Phillips curve did not take into account the effects of changes in expected inflation on inflation. The expectations-augmented Phillips curve did allow for changes in expected inflation to affect actual inflation.Diff: 28.3 The Philips Curve and the Natural Rate of Unemployment1) Which of the following will not cause an increase in the natural rate of unemployment?A) an increase in mB) an increase in zC) an increase in the expected inflation rateD) a reduction in mE) none of the aboveAnswer: CDiff: 22) Since 1970, the evidence for the U.S. suggests that the average rate of unemployment required to keep inflation constant has beenA) between 1% and 2%.B) between 2% and 3%.C) between 3% and 4%.D) between 9% and 10%.E) none of the aboveAnswer: EDiff: 23) The evidence for the U.S. suggests that the natural rate of unemployment hasA) increased by more than 5% since the 1960s.B) increased by 1 to 2% since the 1960s.C) decreased from 2000-2007, lower than it had been in the 1980s.D) decreased by more than 5% since the 1960s.E) fluctuated over time since the 1960s.Answer: CDiff: 14) When a worker's nominal wage is indexed, the nominal wage is usually automatically adjusted based on movements in which of the following variables?A) productivityB) the price of the firm's productC) the average wage in the countryD) the average wage in the industryE) none of the aboveAnswer: EDiff: 15) If a country experiences persistently low inflation, which of the following tends NOT to occur?A) wage indexation will become less importantB) nominal wages will be set for shorter periods of timeC) the markup over labor costs will decreaseD) all of the aboveAnswer: ADiff: 26) Which of the following will tend to occur as a result of a reduction in the proportion of a country's workers who have indexed wages?A) the unemployment rate will be relatively low.B) the unemployment rate will be relatively high.C) the inflation rate will be relatively low.D) a given change in the unemployment rate will cause a relatively smaller change in the inflation rate.E) none of the aboveAnswer: DDiff: 27) Which of the following does not represent a "labor market rigidity" to which critics refer when discussing unemployment in Europe?A) generous unemployment insuranceB) restrictive monetary and fiscal policiesC) a high degree of employment protectionD) relatively high minimum wagesE) none of the aboveAnswer: BDiff: 18) Suppose policy makers overestimate the natural rate of unemployment. In situations like these, policy makers will likely implement policies that result inA) less unemployment than necessary.B) an unemployment rate that is "too low."C) a lower inflation rate than necessary.D) a steadily increasing inflation rate.E) overly expansionary monetary and fiscal policy.Answer: CDiff: 29) Which of the following is one possible explanation for the change in the natural rate of unemployment in the United States during the 1970s?A) contractionary fiscal policyB) an increase in the proportion of labor contracts that were indexedC) contractionary monetary policyD) all of the aboveE) none of the aboveAnswer: EDiff: 210) Which of the following will most likely cause a change in the natural rate of unemployment?A) changes in monetary policyB) changes in fiscal policyC) changes in expected inflationD) all of the aboveE) none of the aboveAnswer: CDiff: 211) An increase in the price of oil will likely cause which of the following?A) increase the markup in the Phillips curve equationB) increase the sum "m + z" in the Phillips curve equationC) increase the natural rate of unemploymentD) all of the aboveE) none of the aboveAnswer: DDiff: 212) As the proportion of labor contracts that index wages to prices declines, we would expect thatA) a reduction in the unemployment rate will now have a smaller effect on inflation.B) the natural rate of unemployment will increase.C) the natural rate of unemployment will decrease.D) nominal wages will become more sensitive to changes in unemployment.Answer: ADiff: 213) Suppose the Phillips curve is represented by the following equation: πt - πt-1 = 20 - 2u t. Given this information, we know that the natural rate of unemployment in this economy isA) 10%.B) 20%.C) 6.5%.D) 5%.E) none of the aboveAnswer: ADiff: 214) Suppose the Phillips curve is represented by the following equation: πt - πt-1 = 20 - 2u t. Given this information, which of the following is most likely to occur if the actual unemployment in any period is equal to 6%?A) the rate of inflation will tend to increaseB) the rate of inflation will be constantC) the rate of inflation will tend to decreaseD) none of the aboveAnswer: ADiff: 215) Based on your understanding of the Phillips curve, explain what happens to actual inflation (relative to expected inflation) when the actual unemployment rate is either above or below the natural rate of unemployment.Answer: When the actual unemployment rate is equal to the natural rate of unemployment, we know that actual inflation and expected inflation must be equal. In such a case, all else fixed, inflation will not change. If the actual unemployment rate were to fall below the natural rate, inflation would increase. So, the natural rate of unemployment rate may also be referred to the non-accelerating-inflation rate of unemployment. If the opposite occurs, inflation will fall below expected.Diff: 216) Briefly comment on the predictions of economists Milton Friedman and Edmund Phelps about the ability to exploit a trade-off between inflation and unemployment.Answer: Both Friedman and Phelps (separately) argued that there might be a temporarytrade-off between inflation and unemployment. However, both argued that this trade-off could not be exploited permanently. Eventually, expectations of inflation would adjust.Diff: 217) A number of factors are believed to have caused changes in the natural rate of unemployment in the United States during the 1990s. Briefly comment on each of these factors.Answer: There are a number of candidates here: decrease in monopoly power, decreasing role of unions, aging U.S. population, increased prison population, increased number of workers on disability, and unexpectedly high rate of productivity growth.Diff: 218) Based on your understanding of the Phillips curve, is it possible for the unemployment rate to increase while inflation increases? Explain.Answer: This can occur when negative supply shocks occur. That is, we would observe this when factors cause the natural rate of unemployment to rise (e.g. during the 1970s). This would cause an increase in u and an increase in inflation.Diff: 28.4 A Summary and Many Warnings1) The data suggest that in the European Union countries, the natural rate of unemploymentA) is now higher than in the U.S.B) is no longer a relevant concept.C) has steadily declined over the past two decades.D) will soon exceed the percentage of the labor force that is working.E) has become less "natural," since it is now almost entirely determined by the policies of a few large corporations.Answer: ADiff: 12) During the Great Depression, the actual unemployment rate in the U.S. ________, and the natural rate apparently ________.A) increased; decreasedB) increased; remain unchangedC) increased; increased as wellD) decreased; increasedE) decreased; remained unchangedAnswer: CDiff: 23) Which of the following explains why the original Phillips curve relation disappeared or, as some economists have remarked, "broke down" in the 1970s?A) Individuals assumed the expected price level for the current year would be equal to the actual price level from the previous year.B) Individuals assumed that expected inflation would be zeroC) Individuals changed the way they formed expectations of inflation.D) Monetary policy became contractionary.E) More labor contracts became indexed to changes in inflation.Answer: CDiff: 24) Which of the following situations generally exists when deflation occurs?A) Inflation and unemployment are both increasing.B) Inflation and unemployment are both decreasing.C) The price level is decreasing.D) The rate of inflation is falling from, for example, 10% to 3%.E) The natural rate of unemployment is zero.Answer: CDiff: 15) As of 2009, what was the last year that U.S. experienced deflation?A) 1933B) 1955C) 1973D) 1991E) 2001Answer: BDiff: 16) During the 1980s and early 1990s, it was believed that the natural rate of unemployment in the U.S. was equal toA) 4%.B) 4.5%.C) 5%.D) 6.5%.E) 7%.Answer: DDiff: 17) Which of the following does not explain the relatively low price inflation compared to the higher wage inflation in the U.S. during the 1990s?A) the appreciation of the dollarB) a reduction in benefits paid to workersC) an increase in the natural rate of unemploymentD) a reduction in the price of oilAnswer: CDiff: 28) In the Phillips curve equation, which of the following will cause a reduction in the current inflation rate?A) a reduction in the expected inflation rateB) an increase in the unemployment rateC) a reduction in the markup, mD) all of the aboveE) none of the aboveAnswer: DDiff: 29) Suppose policy makers underestimate the natural rate of unemployment. In situations like these, policy makers will likely implement policies that result inA) more unemployment than necessary.B) an unemployment rate that is "too high."C) a higher inflation rate than necessary.D) a steadily decreasing inflation rate.E) overly contractionary monetary and fiscal policy.Answer: CDiff: 210) Explain how a reduction in the proportion of contracts that are indexed affects the relationship between changes in the unemployment rate and inflation.Answer: As the proportion of labor contracts that are indexed falls, the effects of changes in unemployment on inflation would fall. A reduction in u will cause an increase in inflation. When inflation rises in a period, some contracts (those that are indexed) will call for an immediate increase in wages further increasing inflation within that period. As indexation becomes less prevalent, that secondary effect (caused by the indexed contracts) on inflation will be reduced. Diff: 211) Explain how the unexpectedly high rate of productivity growth at the end of the 1990s affected inflation and unemployment during this period.Answer: The unexpectedly high rate of growth of productivity would cause firms' costs to drop. This would cause (if unexpected) a reduction in unemployment. So, we would observe a simultaneous drop in u and drop in inflation.Diff: 212) Explain how changes in the proportion of contracts that are indexed affect how a given change in monetary policy will affect economic activity.Answer: An increase in nominal money growth will increase the real money supply causing an increase in economic activity. As the proportion of labor contracts that are indexed increases, the effects of changes in unemployment on inflation would increase. A reduction in u will cause an increase in inflation. When inflation rises in a period, some contracts (those that are indexed)will call for an immediate increase in wages further increasing inflation within that period. As indexation becomes more prevalent, that secondary effect on inflation will be magnified. This magnification of the inflation effect will cause the real money supply to increase by a smaller amount and, therefore, reduce the output effects of a given monetary expansion.Diff: 213) Based on the 'early incarnation' of the Phillips curve, explain what effect a decrease in the unemployment rate will have on the inflation rate.Answer: An decrease in u will cause a rise in W. As W rises, firms' costs increase. As firms' costs increase, they will raise the price level. This increase in the price level represents, in this case, inflation.Diff: 214) Why has the U.S. natural rate of unemployment fallen since the early 1990s?Answer: Researchers have offer a number of explanations: Increased globalization and stronger competition between US and foreign firms may have led to a decrease in monopoly power and a decrease in the markup; The nature of the labor market has changed; the aging of the US population; an increase in the prison population and the increase in the number of workers on disability.Diff: 215) Explain the natural unemployment rate and its relationship to inflation rate.Answer: The natural unemployment rate is the unemployment rate at which the inflation rate remains constant. When the actual unemployment rate exceeds the natural rate of unemployment, the inflation rate typically decreases; when the actual unemployment rate is less than the natural unemployment, the inflation rate typically increases.Diff: 216) What is the difference between deflation and disinflation?Answer: Deflation refers to a decrease in the price level, or equivalently, negative inflation. Disinflation is a decrease in the inflation rate.Diff: 117) How will the crisis affect the natural rate of unemployment?Answer: There is an increasing worry that the increase in the actual unemployment rate may eventually translate into an increase in the natural unemployment rate. Workers who have been unemployed for a long time may lose their skills, or their morale, and become unemployable, leading to a higher natural rate.Diff: 2。
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N. Gregory Mankiw
PowerPoint® Slides by Ron Cronovich
CHAPTER
8
Economic Growth II: Technology, Empirics, and Policy
Modified for EC 204 by Bob Murphy
faster than rich ones. Does this mean the Solow model fails?
CHAPTER 8
Economic Growth II
13
Growth empirics: Convergence
Solow model predicts that, other things equal,
© 2010 Worth Publishers, all rights reserved
SEVENTH EDITION
In this chapter, you will learn:
how to incorporate technological progress in
the Solow model
To find the Golden Rule capital stock, express c* in terms of k*: c* = y* i* ( + n + g) k* In the Golden Rule steady state, the marginal product of capital net of depreciation equals the pop. growth rate plus the rate of tech progress.
This prediction comes true in the real world.
CHAPTER 8
Economic Growth II
15
Growth empirics: Factor accumulation vs. production efficiency
Differences in income per capita among countries
CHAPTER 8
Economic Growth II
3
Examples of technological progress
From 1950 to 2000, U.S. farm sector productivity
nearly tripled. The real price of computer power has fallen an average of 30% per year over the past three decades. Percentage of U.S. households with ≥ 1 computers: 8% in 1984, 62% in 2003 1981: 213 computers connected to the Internet 2000: 60 million computers connected to the Internet 2001: iPod capacity = 5gb, 1000 songs. Not capable of playing episodes of True Blood. 2009: iPod capacity = 120gb, 30,000 songs. Can play episodes of True Blood.
similar savings & pop. growth rates, income gaps shrink about 2% per year.
In larger samples, after controlling for differences
in saving, pop. growth, and human capital, incomes converge by about 2% per year.
Economic Growth II
4
CHAPTER 8
Technological progress in the Solow model A new variable: E = labor efficiency Assume:
Technological progress is labor-augmenting: it increases labor efficiency at the exogenous rate g:
( + n + g)k = break-even investment: the amount of investment necessary to keep k constant.
Consists of: k to replace depreciating capital
n k to provide capital for new workers g k to provide capital for the new “effective”
k = K/(L×E )
y = Y/(L×E )
0
0
Output per worker
Total output
CHAPTER 8
(Y/ L) = y×E
Y = y×E×L
g
n+g
10
Economic Growth II
The Golden Rule with technological progress
Production function per effective worker:
y = f(k)
Saving and investment per effective worker:
s y = s f(k )
CHAPTER 8
Economic Growth II
7
Technological progress in the Solow model
Solow model predicts real wage grows at same
rate as Y/L, while real rental price is constant.
Also true in the real world.
CHAPTER 8
Economic Growth II
can be due to differences in: 1. capital – physical or human – per worker
11
= f (k* )
c* is maximized when MPK = + n + g or equivalently, MPK = n + g
CHAPTER 8
Economic Growth II
Growth empirics: Balanced growth
Solow model’s steady state exhibits
( +n +g ) k
sf(k)
k*
CHAPTER 8
Economic Growth II
Capital per worker, k
9
Steady-state growth rates in the Solow model with tech. progress
Capital per effective worker Output per effective worker
same effect on output as increases in the labor force.
CHAPTER 8
Economic Growth II
6
Technological progress in the Solow model
Notation:
y = Y/LE = output per effective worker k = K/LE = capital per effective worker
workers created by technological progress
CHAPTER 8
Economic Growth II
8
பைடு நூலகம்
Technological progress in the Solow model
Investment, break-even investment
k = s f(k) ( +n +g)k
If true, then the income gap between rich & poor
countries would shrink over time, causing living standards to “converge.”
In real world, many poor countries do NOT grow
Introduction
In the Solow model of Chapter 7, the production technology is held constant. income per capita is constant in the steady state. Neither point is true in the real world: 1908-2008: U.S. real GDP per person grew by a factor of 7.8, or 2.05% per year. examples of technological progress abound (see next slide).