Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
The problem with the Keynesian model
We can classify two problems with the Keynesian model as developed so far:
1. Π is exogenous. Although inflation may temporarily deviate from wage inflation, this deviation can't be too large and it can't last for too long (since real wages would become unreasonable low or unreasonable high). This model has no determination of Πw and hence no complete determination of Π. A model which predicts an inflation of around 6% by presuming a wage inflation of 6% isn't very useful. Keynesian model with inflation is hence incomplete.
2. It is quite unreasonable to presume that Πw would be independent of Y. More reasonable would be to model Π Was a positive function of Y. If we are in a boom, L would be above its average and unemployment below its average. In such a situation, it's reasonable to expect wage inflation to increase.
To solve these problems, we have to make Πw endogenous. We do this by Keynesian model adding the Phillips curve.
The production function is Q=3LK
The Concept of Growth and Growth Rate is explained below: Economic growth is rise in an economy’s level of the production of commodities, output or income. We can talk about th
What are the crisis affect the economies This crisis would affect the UK in 3 major ways. First the UK would be unable to sell its exports to these economies if they are hea
iN BOTH CITIES, AN INCREASE IN INCOME COMBINED WITH EXPECTATIONS OF A STRONG MARKET SHIFTED DEMAND AND CAUSED PRICES TO RISE RAPLIDLY DURING THE MID-TO LATE 1980S. Illustrate with
Determine the categories of finished goods Finished goods in the goods market are divided into 4 categories: private consumption going to private sector, public consumption for
Consider a model of Cournot competition as studied in class, with 2 firms and a linear inverse demand function P(Q) = a - Q (where Q = q 1 + q 2 is the total quantity produced by
Your local newspaper reports the following: the owners of the New Orleans Sandwich Shop in Seattle, Washington, found that when they priced their hot dogs (reportedly the rolls-roy
EXPLAIN THE MR AND MC APPROACH FOR EQUILIBRIUM DETERMINATION OF FIRM IN SHORT RUN.
Hello, how to cure inflation, particularly addressing rising food prices thanks Gedanken
Wholesale Prices, Consumer Prices and Inflation From the man on the street to the highest policy makers, the behavior of prices is of intimate concern. Prices determine the pu
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd