Because markets and industries are interconnected in the economy, large shocks to either supply or demand in anysectorof the economy can have a far-reaching macroeconomic impact. Economic shocks can be positive (helpful) or negative (harmful) to the economy, though for the most parteconomists, a...
(The standard models assumed that the economy was buffeted by exogenous shocks; most crisis shocks are, however, endogenous manmade.) Four hypotheses are presented about how the structure of the economy changed (sometimes as a result of policy) in ways that increased the likelihood of a large...
Christiano, L.J., Eichenbaum, M. and Evans, C.L. (1998) ‘Monetary Policy Shocks: What Have We Learned and to What End?’ mimeo, Northwestern University. Google Scholar Clarida, R., Gali, J. and Gertler, M. (1999) ‘The Science of Monetary Policy: A New Keynesian Perspective’,Jo...
(2019). What happens to the relationship between eu allowances prices and stock market indices in Europe? Energy Economics, 81(June), 13–24. https://doi.org/10.1016/j.eneco.2019.03.002 Article Google Scholar Kilian, L. (2009). Not all oil price shocks are alike: disentangling demand ...
In Keynesian Macroeconomics without the LM curve, (a) what are the main advantages and disadvantages of the IS-LM-AS model? (Note that some of the disadvantages are discussed in connection with the d What specific segments of the economy does Edmund Mennis recommend be carefully analyzed in as...
The classical understanding of comparative advantage does not account for certain disadvantages that come from over-specialization. For example, an agricultural country that focuses on cash crops and relies on the world market for food, could find itself vulnerable to global price shocks. ...
Moreover, the still popular Fleming, 1962, Mundell, 1963 model suggests autonomous spending shocks are ineffective in raising national income under a floating exchange rate. Instead, spending shocks ‘crowd out’ net exports, thereby raising the current account deficit. External deficits and the ...
What are some of the major criticisms on Keynes's quantity theory of money? Why is a more Keynesian or Classical approach favored in response to shocks to the economy? Explain. Explain classical economic theory vs Keynesian economic theory. ...
What are the main points of Keynesian Economics? Summarize the Keynesian and neoclassical models. Why is a more Keynesian or Classical approach favored in response to shocks to the economy? Explain. Why would an economist choose either the neoclassical perspective or the Keynesian perspective, but ...
To do this, we maintain that both CPI and PPI are sticky in the baseline model. We find that, when the central bank does not know the actual source of shocks, one way to avoid big welfare losses is to assume that the shocks hit both sectors or just the PPI sector and to formulate ...