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Comprehensive Macroeconomics Study: Short, Medium & Long Run Analysis with Equilibrium Rates

Explore the fundamental concepts of macroeconomics across short, medium, and long-term perspectives, focusing on shifts in Aggregate Demand (AD) and Supply (AS), Equilibrium Rates, and Productivity. Delve into the IS/LM and AD/AS models, Phillips Curve, Okun’s Law, and Monetary Policy implications. Understand the dynamics of Natural, Structural, and Equilibrium Rates of Unemployment, as well as the implications of shifts in Aggregate Demand or Supply on equilibrium outcomes. Examine the significance of the Golden Rule Saving Rate in achieving sustainable growth in the long run.

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Comprehensive Macroeconomics Study: Short, Medium & Long Run Analysis with Equilibrium Rates

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  1. Macroeconomics The course is divided in three parts: Short -run / Medium-run / Long-run Short - run: IS / LM  AD LM: (M/P)d = (M/P)s (M/P)d = L(Y,i) Ms = [1/(c + r(1-c))]H = {money multiplier} x {monetary base} IS:Y = C + I + G C = c0 + c1 YD = c0 + c1 (Y - T) I = I0 + b1 Y - b2 i  Y = {spending multiplier} x {autonomous spending} Medium - run: AD/AS IS/LM  AD PS/WS  AS PS: P = (1+ μ)(W/A) WS: W= Pe Ae f(u,z)  SRAS and MRAS Phillips Curve + Okun’s Law + gm = gy + π  M policy • In medium - run, Pe = P  (W/P)WS = (W/P)PS = A / (1+ μ) • Natural/Structural/Equilibrium Rate of Unemployment (un ) • “Full - employment” rate of output (YFE)The Green Shaft When AD or AS shift: MR equilibrium  SR equilibrium P  new MR equilibrium Productivity and equilibrium rate of unemployment: Ae = A only in long - run  “Natural rate” decreases with unexpected increase in A Long - run: Growth Steady state: s(Y/AN) = (δ + gN + gA )(K/AN) For simple Cobb-Douglas function: Y = Kα (AN)1-α Y/AN = {s/((δ + gN + gA )}α/(1-α) Golden - rule saving rate = α

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