ECON1102 Lecture Notes - Lecture 16: Loanable Funds, Phillips Curve, Monetarism
Document Summary
)mplicit (cid:494)mass consumption(cid:495: the role of time: short-run versus long-run adjustment, the psychology of consumers and investors (especially, but not necessarily always hold exclusively, regarding expectations) Marginal efficiency of capital (profitability of a capital asset) Major reasons for (cid:494)suboptimal(cid:495) investment: savers- suppliers of capital in the loanable funds market, animal spirits- investor and saver psychology, monetary rigidities. Low unemployment higher demand prices go up: lead economists to believe that with fine tuning they select off a (cid:494)menu(cid:495) of. Does not account for expectations that will shift the curve economic growth options. The (cid:858)great inflation(cid:859) of the (cid:1005)97(cid:1004)s and stagflation. Inflation and unemployment both began to increase: coordinated increases in oil prices.
