ECON 3440 Lecture Notes - Lecture 2: Quantitative Easing, Price Ceiling, Tax Deduction
Document Summary
Gov policy: monetary national $ supply, short term interest rate, cb balance sheet, fiscal gov spending, taxation. Gov spending = gov purchases (g) + gov benefit. Bus cycles: only takes quarterly data into consideration. Activists: gov should take immediately action to correct any deviations in policy rate, etc: i. e. price ceiling on tuition, tax deduction, keynsian. Nonactivists: economy is self correcting in the long run: adam smith. Recession 2007-09 (9. 9% ur) is worse than 1981-82 (10. 2% ur: 81 to 82 ur increased from 6, 2007-09 started from 4% *on midterm* during expansion, ur can also be higher if: Alp = y / e, ur = u / (u + y/alp) Y increases, e constant, alp increase, u increases more than e, then ur increases. Inflation at times of war, followed by deflation.
