Lectures in Macroeconomics- Charles W. Upton Monetary Policy Rules.
Lectures in Macroeconomics- Charles W. Upton Incorporating Real Business Cycles.
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Transcript of Lectures in Macroeconomics- Charles W. Upton Incorporating Real Business Cycles.
Lectures in Macroeconomics- Charles W. Upton
Incorporating Real Business Cycles
Incorporating Real Business Cycles
A Combined Graph
PMYSLR SSR
D
Incorporating Real Business Cycles
A Drought
PMYSLR SSR
D
A drought causes a decline in productivity
Incorporating Real Business Cycles
Shift in Yf
PMYSLR SSR
D
YfYfd
Incorporating Real Business Cycles
Shift in P Curve
PMYSLR SSR
D
YfYfd
Incorporating Real Business Cycles
Shift in P Curve
PMYSLR SSR
D
YfYfd
The P curve comes about because of LS
effects, not changes in A; A shift in A will also shift
that curve
Incorporating Real Business Cycles
A Digression
PMYSLR SSR
D
YfYfd
Incorporating Real Business Cycles
Shift in Y Curve
PMYSLR SSR
D
YfYfd
Incorporating Real Business Cycles
Shift in M Curve
PMYSLR SSR
D
YfYfd
Incorporating Real Business Cycles
Equilibrium
PMYSLR SSR
D
YfYfd
Inflation
Yfd < Y < Yf
U>Un
Incorporating Real Business Cycles
The Ambiguity in R
Incorporating Real Business Cycles
The Bottom Line
PMYSLR SSR
D This is not a replacement, just a
richer model
Incorporating Real Business Cycles
End
©2006 Charles W. Upton. All rights reserved
The picture: President George W. Bush meets with the 2004 Nobel
Laureates in the Oval Office Dec. 1, 2004. Pictured with President Bush,
from left, are Dr. Linda Buck, physiology and medicine; Finn Kydland, economics; Edward
Prescott, economics; Frank Wilczek, physics; David Gross, physics; and
Richard Axel, physiology and medicine. White House photo by
Tina Hager