ECON 219 Lecture Notes - Lecture 16: Contract Curve, Aggregate Supply, Comparative Advantage

• School: McGill University
• Department: Economics
• Course: ECON 219
• Professor: Tom Velk

Document Summary

Is-lm curves: handle them with bop curve, fixed flexible exchange rates, aggregate supply and demand etc. Algebra (policy assignment model): instruments, if wanting to control two goals, need two instruments ex income and deficit, control both a and x. Fiscal for income and monetary for balance of payment problem, absorption problem: begin strategy at right time. Dd and ff curves (four meade cases) draw them talk about them (cid:2) (cid:2) Numbers with comparative advantage production functions and slopes. Strategy is to combine production functions so there is more of everything. Prices that emerge after the trade (cid:2) (cid:2) (cid:2) (cid:2) (cid:2) Allows you to understand financial side of things such as allocation of capital, efficient outcome on contract curve. Voting models shows beginning of voting and lack of communication, voting models three way outcome drop lowest outcome, bridge building model discriminating price model.