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Uncertainty and Sentiment-Driven Equilibria

Benhabib, Jess - 2013

We construct a model to capture the Keynesian idea that production and employment decisions are based on expectations of aggregate demand driven by sentiments and that realized demand follows from the production and employment decisions of firms. We cast the Keynesian idea into a simple model...

Persistent link: https://www.econbiz.de/10013085407

The Anatomy of Sentiment-Driven Fluctuations

Acharya, Sushant - 2017

We show that sentiments - self-fulfilling changes in beliefs that are orthogonal to fundamentals - can drive persistent aggregate fluctuations under rational expectations. Such fluctuations can occur even in the absence of any exogenous aggregate fundamental shocks. In addition, sentiments also...

Persistent link: https://www.econbiz.de/10012963733

The Cost Channel of Monetary Transmission

Barth, Marvin J, III. - 2000

This paper presents evidence that the cost channel' may be an important part of the monetary transmission mechanism. We argue that if working capital is an essential component of production and distribution, monetary contractions can affect output through a supply channel as well as the...

Persistent link: https://www.econbiz.de/10012471092

Equilibrium and Optimal Tax Rates in the Models of Aggregate Demand and Aggregate Supply (Laffer-Keynesian Synthesis)

Ananiashvili, Iuri - 2013

The paper presents a macroeconomic equilibrium model in which aggregate demand and aggregate supply are considered not in relation to the price level, as is traditionally done, but in terms of functions dependent on the average tax rate. Based on an analysis of the model, it is shown that when...

Persistent link: https://www.econbiz.de/10013076395

The Distribution of Harm in Price-Fixing Cases

Boone, Jan - 2008

We consider a vertically related industry and analyze how the total harm due to a price increase upstream is distributed over downstream firms and final consumers. For this purpose, we develop a general model without making specific assumptions regarding demand, costs, or the mode of...

Persistent link: https://www.econbiz.de/10012723288

Aggregate Supply and Potential Output

Razin, Assaf - 2007

The New-Keynesian aggregate supply derives from micro-foundations an inflation-dynamics model very much like the tradition in the monetary literature. Inflation is primarily affected by: (i) Economic slack; (ii) Expectations; (iii) Supply shocks; and, (iv) Inflation persistence.This paper...

Persistent link: https://www.econbiz.de/10012729332

Supply Shocks in Macroeconomics

Shapiro, Matthew D. - 2007

Supply shocks played an important role in macroeconomic fluctuations during the 1970's. Supply shocks are also increasingly important in Keynesian and neo-classical models of the business cycle. This paper is a short survey of these theoretical models. It also discusses the history of supply...

Persistent link: https://www.econbiz.de/10012777374

Aggregate Demand and Supply

Farmer, Roger E. A. - 2010

This paper is part of a broader project that provides a microfoundation to the General Theory of J.M. Keynes. I call … this project 'old Keynesian economics' to distinguish it from new-Keynesian economics, a theory that is based on the idea … definitions of aggregate demand and supply found in the General Theory through the lens of a search theory of the labor market. I …

Persistent link: https://www.econbiz.de/10012759829

J M Keynes's Aggregate Supply Function, Z, is Simply Pigou's Aggregate Supply Function with Price and Profit Expectations Substituted for Realized Prices and Actual Economic Profit

Brady, Michael Emmett - 2018

In September, 1933, Pigou's The Theory of Unemployment appeared. After reading it, Keynes decided that he would not … analysis in The Theory of Unemployment. Keynes improved on the mathematical modeling by explicitly integrating expected profits … equilibria. The locus of all such multiple equilibria forms the major theoretical breakthrough of the General Theory, Keynes …

Persistent link: https://www.econbiz.de/10012934661

Macro economic model of COVID-19 pandemic crisis

Čavrak, Vladimir - In: Macroeconomic responses to the COVID-19 pandemic : …, (pp. 85-108). 2021

The economic crisis triggered by the COVID-19 virus is unique in economic history in its mode and rate of occurrence, global coverage, and consequences. The text reveals the mechanisms of the impact of health shock on the economy and the macroeconomic framework of mitigating and exiting the...

Persistent link: https://www.econbiz.de/10012608984