布蘭查德宏觀經(jīng)濟學第四版第07章

1、Aggregate SupplyThe aggregate supply relation captures the effects of output on the price level. It is derived from the behavior of wages and prices.Recall the equations for wage and price determination from chapter 6:7-11Aggregate SupplyStep 1: Eliminate the nominal wage from:and, then:In words, th

2、e price level depends on the expected price level and the unemployment rate. We assume that and z are constant.2Aggregate SupplyStep 2: Express the unemployment rate in terms of output:Therefore, for a given labor force, the higher is output, the lower is the unemployment rate.3Aggregate SupplyStep

3、3: Replace the unemployment rate in the equation obtained in step one:In words, the price level depends on the expected price level, Pe, and the level of output, Y (and also , z, and L, but we take those as constant here).4Aggregate SupplyThe AS relation has two important properties:An increase in o

4、utput leads to an increase in the price level. This is the result of four steps: 5An increase in the expected price level leads, one for one, to an increase in the actual price level. This effect works through wages: Aggregate SupplyThe AS relation has two important properties:6Aggregate SupplyGiven

5、 the expected price level, an increase in output leads to an increase in the price level. If output is equal to the natural level of output, the price level is equal to the expected price level.The Aggregate Supply CurveFigure 7 - 17Aggregate SupplyThe AS curve has three properties that will prove t

6、o be useful in what follows:The AS curve is upward sloping. As explained earlier, an increase in output leads to an increase in the price level.The AS curve goes through point A, where Y = Yn and P = Pe. This property has two implications:When Y Yn, P Pe.When Y Yn, P Pe. An increase in Pe shifts the

7、 AS curve up, and a decrease in Pe shifts the AS curve down.8Aggregate SupplyAn increase in the expected price level shifts the aggregate supply curve up.The Effect of an Increase in the Expected Price Level on the Aggregate Supply CurveFigure 7 - 29Aggregate SupplyLets summarize:Starting from wage

8、determination and price determination in the labor market, we have derived the aggregate supply relation.This means that for a given expected price level, the price level is an increasing function of the level of output. It is represented by an upward-sloping curve, called the aggregate supply curve

9、.Increases in the expected price level shift the aggregate supply curve up; decreases in the expected price level shift the aggregate supply curve down. 10Aggregate DemandThe aggregate demand relation captures the effect of the price level on output(through the real money stock). It is derived from

10、the equilibrium conditions in the goods and financial markets.Recall the equilibrium conditions for the goods and financial markets described in chapter 5:7-211The changes in the real money stock can either come from changes in nominal moneysupply ,M, or changes in the price level. Using the IS and

11、the LM relations, we can derive the relation between the price level and the level og output implied by equilibrium in the goods and financial markets . 12Aggregate DemandAn increase in the price level leads to a decrease in output.The Derivation of the Aggregate Demand CurveFigure 7 - 313Aggregate

12、DemandChanges in monetary or fiscal policyor more generally in any variable, other than the price level, that shift the IS or the LM curvesshift the aggregate demand curve.The IS curve is downward sloping, the LM curve is upward sloping.The negative relation between output and the price level is dra

13、wn as the downward-sloping curve AD. 14Aggregate DemandAn increase in government spending increases output at a given price level, shifting the aggregate demand curve to the right. A decrease in nominal money decreases output at a given price level, shifting the aggregate demand curve to the left.Sh

14、ifts of the Aggregate Demand CurveFigure 7 - 415Aggregate DemandLets summarize:Starting from the equilibrium conditions for the goods and financial markets, we have derived the aggregate demand relation.This relation implies that the level of output is a decreasing function of the price level. It is

15、 represented by a downward-sloping curve, called the aggregate demand curve.Changes in monetary or fiscal policy or more generally in any variable, other than the price level, that shifts the IS or the LM curves shift the aggregate demand curve.16Equilibrium in the ShortRun and in the Medium RunFor

16、a given value of the expected price level, Pe ,and for a given values of the monetary and fiscal policy variables M,G,T, these two relations determine the equilibrium values of output ,Y,and the price level ,p.7-317Equilibrium depends on the value of Pe. The value of Pe determines the position of th

17、e aggregate supply curve, and the position of the AS curve affects the equilibrium.In short run ,we can take Pe ,the price level expected by wage setters when they last set wages ,as given .But ,over time, Pe is likely to changes ,shifting the aggregate supply curve ,and changing the equilbrium . In

18、 this way ,we can describe the changes of equilbrium output from the short run to the medium run 18Equilibrium in the Short RunThe equilibrium is given by the intersection of the aggregate supply curve and the aggregate demand curve. At point A, the labor market, the goods market, and financial mark

19、ets are all in equilibrium.The Short Run EquilibriumFigure 7 - 519Equilibrium in the Short RunThe aggregate supply curve AS is drawn for a given value of Pe. The higher the level of output, the higher the price level.The aggregate demand curve AD is drawn for given values of M, G, and T. The higher

20、the price level is, the lower the level of output.20The result tells us : In the short run ,there is no reason why output should equal the natural level of output.It all depends on the specific values of the expected price level ,and the values of the variables affecting the position of aggregate de

21、mand. Then what happens over times?21From the Short Runto the Medium RunAt point A,Wage setters will revise upward their expectations of the future price level. This will cause the AS curve to shift upward.Expectation of a higher price level also leads to a higher nominal wage, which in turn leads t

22、o a higher price level which leads to a decrease in the real money stock .the interest rate increases,leading to a decrease in output. 22From the Short Runto the Medium RunThe adjustment ends onceand wage setters nolonger have a reason to change their expectations.In the medium run, output returns t

23、o the natural level of output.23 In words: The fact that output initially exceeds the natural level of output,this leads to Wage setters to revise upward their expectations of the future price level,leading to a higher price level ,which in turn leads to a higher nominal wage, which leads to a decre

24、ase in the real money stock ,which leads to the interest rate increases,leading to a decrease in output. The adjustment stops when output is equal to the natural level of output.At that point ,the price level is equal to the expected price level ,expectation no longer change,and so ,output remains a

25、t the natural level of output. 24From the Short Runto the Medium RunIf output is above the natural level of output, the AS curve shifts up over time, until output has decreased back to the natural level of output.The Adjustment of Output over TimeFigure 7 - 625From the Short Runto the Medium RunLets

26、 summarize:In the short run, output can be above or below the natural level of output. Changes in any of the variables that enter either the aggregate supply relation or the aggregate demand relation lead to changes in output and to changes in the price level. In the medium run, output eventually re

27、turns to the natural level of output. The adjustment works through changes in the price level.26The Effects of aMonetary ExpansionIn the aggregate demand equation, we can see that an increase in nominal money, M, leads to an increase in the real money stock, M/P, leading to an increase in output. Th

28、e aggregate demand curve shifts to the right.7-427The Dynamics of AdjustmentThe increase in the nominal money stock causes the aggregate demand curve to shift to the right.In the short run, output and the price level increase.28The Dynamic Effects ofa Monetary ExpansionThe difference between Y and Y

29、n sets in motion the adjustment of price expectations.In the medium run, the AS curve shifts to AS and the economy returns to equilibrium at Yn.The increase in prices is proportional to the increase in the nominal money stock.29The Dynamics of AdjustmentA monetary expansion leads to an increase in o

30、utput in the short run, but has no effect on output in the medium run.The Dynamic Effects of a Monetary ExpansionFigure 7 - 730Going Behinds the ScenesThe impact of a monetary expansion on the interest rate can be illustrated by the IS-LM model.The short-run effect of the monetary expansion is to sh

31、ift the LM curve down. The interest rate is lower, output is higher.31Going Behinds the ScenesIf the price level did not increase, the shift in the LM curve would be largerto LM.32Going Behinds the ScenesOver time, the price level increases, the real money stock decreases and the LM curve returns to

32、 where it was before the increase in nominal money.In the medium run, the real money stock and the interest rate remain unchanged.33Going Behinds the ScenesThe increase in nominal money initially shifts the LM curve down, decreasing the interest rate and increasing output. Over time, the price level

33、 increases, shifting the LM curve back up until output is back at the natural level of output.The Dynamic Effects of a Monetary Expansion on Output and the Interest RateFigure 7 - 834The Neutrality of MoneyIn the short run, a monetary expansion leads to an increase in output, a decrease in the inter

34、est rate, and an increase in the price level.In the medium run, the increase in nominal money is reflected entirely in a proportional increase in the price level. The neutrality of money refers to the fact that an increase in the nominal money stock has no effect on output or the interest rate in th

35、e medium run. The increase in the nominal money stock is completely absorbed by an increase in the price level.35A Decrease inthe Budget DeficitThe Dynamic Effects of a Decrease in the Budget DeficitA decrease in the budget deficit leads initially to a decrease in output. Over time, output returns t

36、o the natural level of output.7-5Figure 7 - 936How Long Lasting Are the Real Effects of Money?Figure 1 The Effects of an Expansion in Nominal Money in the Taylor ModelMacroeconometric models are larger-scale versions of the aggregate supply and aggregate demand model in this chapter. They are used t

37、o answer questions such as how long the real effects of money last.37Deficit Reduction, Output,and the Interest RateSince the price level declines in response to the decrease in output, the real money stock increases. This causes a shift of the LM curve to LM.Both output and the interest rate are lo

38、wer than before the fiscal contraction.38Deficit Reduction, Output,and the Interest RateThe LM curve continues to shift down until output is back to to the natural level of output.The interest rate is lower than it was before deficit reduction.39Deficit Reduction, Output,and the Interest RateA defic

39、it reduction leads in the short run to a decrease in output and to a decrease in the interest rate. In the medium run, output returns to its natural level, while the interest rate declines further.The Dynamic Effects of a Decrease in the Budget Deficit on Output and the Interest RateFigure 7 - 1040D

40、eficit Reduction, Output,and the Interest RateThe composition of output is different than it was before deficit reduction.Income and taxes remain unchanged, thus, consumption is the same as before.Government spending is lower than before; therefore, investment must be higher than before deficit redu

41、ctionhigher by an amount exactly equal to the decrease in G.41Budget Deficits, Output, and InvestmentLets summarize:In the short run, a budget deficit reduction, if implemented alone leads to a decrease in output and may lead to a decrease in investment.In the medium run, output returns to the natur

42、al level of output, and the interest rate is lower. A deficit reduction leads unambiguously to an increase in investment.42 Changes in the Price of OilThe Price of Crude Petroleum since 1960There were two sharp increases in the relative price of oil in the 1970s, followed by a decrease in the 1980s

43、and the 1990s.7-6Figure 7 - 1143Effects on the NaturalRate of UnemploymentThe higher price of oil causes an increase in the markup and a downward shift of the price-setting line.The Effects of an Increase in the Price of Oil on the Natural Rate of UnemploymentFigure 7 - 1244The Dynamics of Adjustmen

44、tAn increase in the markup, , caused by an increase in the price of oil, results in an increase in the price level, at any level of output, Y. The aggregate supply curve shifts up.45The Dynamics of AdjustmentAfter the increase in the price of oil, the new AS curve goes through point B, where output

45、equals the new lower natural level of output, Yn, and the price level equals Pe.The economy moves along the AD curve, from A to A. Output decreases from Yn to Y.46The Dynamics of AdjustmentOver time, the economy moves along the AD curve, from A to A.At point A, the economy has reached the new lower

46、natural level of output, Yn, and the price level is higher than before the oil shock.47The Dynamics of AdjustmentAn increase in the price of oil leads, in the short run, to a decrease in output and an increase in the price level. Over time, output decreases further and the price level increases further.The Dynamic Effects of an Increase in the Price of OilFigure 7 -