文档介绍：Chapter 9: Putting All Market Together: The AS-AD Model
9-1: Aggregate Supply
9-2: Aggregate Demand
9-3: Equilibrium Output in the Short and the Medium Run
9-4: The Effects of a ary Expansion
9-5: A Decrease in the Budget Deficit
9-6: Changes in the Price of Oil
9-7: Conclusions
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9-1: Aggregate Supply
Recall our characterization of wage and price determination in chapter 8
W = Pe F(u , z)
P = (1+ μ)W
Combining these two equation
P= Pe (1+ μ) F(u , z)
∵ u≡ U/L = (L-N)/L = 1- N/L = 1- Y/L
∴ P= Pe (1+ μ) F[(1-Y/L) , z] ()
to continue
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The Derivation of the Aggregate Supply Relation
Note two things about equation ():
1. A higher expected price level leads, one for one, to a higher actual price level
2. An increase in output leads to an increase in the price is the result of four underlying steps:
An increase in output to an increase in employment
The increase in employment leads to a decrease in unemployment rate.
The lower unemployment rate leads to an increase in nominal wages
The increase in nominal wages leads to an increase in costs, which leads firms to increase prices.
to continue
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The characteristics of the aggregate supply curve in figure 9-1
It is upward sloping
When output is above its natural level, the price level is higher than expected: P> Pe .Conversely: when output is below its natural level, the price level is lower than expected: P< Pe .
It goes through point A, where Y= Yn and P= Pe .That is,if output is equal to its natural level Yn, then the price level is equal to the expected price level: P= Pe .
An increase in the expected price level shifts the aggregate supply curve up. Conversely, a decrease in the expected price level shifts the aggregate supply curve down.
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Figure 9-1:The Aggregate Supply Curve
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9-2: Aggregate Demand
(goods market) IS: Y = C(Y-T) + I(Y,i) + G
(Financial market) LM: M/P = YL(i)
We represent the aggregate demand relation by