全球视角宏观经济学课件

1、Macroeconomics In The Global EconomyWei wei Shool of Economics and FinanceJiaotong University1Chapter 1 IntroductionThe approach of MacroeconomicsSome of the key questions addressed by macroeconomicsMacroeconomics in historical perspectiveProviding a broader framework for macroeconomic analysis2The

2、approach of Macroeconomics What is macroeconomics ? Macroeconomics is the study of aggregate behavior in an economy. While the economic life of a country depends on millions of individual actions taken by business firms, consumers, workers, and government officials, macroeconomics focuses on the ove

3、rall consequences of these individual actions. For example, prices- price index.3The approach of MacroeconomicsThe basic approach of Macroeconomics is to look at the overall trends in the economy. Special summary measures of economic activity -GNP, the saving rate, or the consumer price index- give

4、the “big picture” of changes and trends.These overall macroeconomic measures provide the basic equipment that allows macroeconomists to focus on the dominant changes in the economy. 4 How do economists do their job? First, try to understand on a theoretical level the decision processes of individual

5、 firms and households.Second, try to explain the overall behavior of the economy by aggregating, or adding up, all the decisions of the individual households and firms in the economy.Third, giving empirical content to theory by collecting and analyzing actual macroeconomic data. 5Some of the key que

6、stions addressed by macroeconomicsThe most important single measure of production in the economy is the GNP. Economic growth and business cyclesUnemployment is a second key variable that macroeconomics investigates.A third key variable that interests macroeconomists is the inflation rate.The fourth

7、major variable that macroeconomists look at is the trade balance.6Macroeconomics in historical perspectiveThe creation of macroeconomics Economic statisticians began to collect and systematize aggregate data which provided the scientific basis for macroeconomic investigations. The careful identifica

8、tion of business cycle as a recurrent economic phenomenon. The Great Depression A new theoretical framework to explain the Great Depression proposed by Keynes.7The development of macroeconomics Keynesian and neo-Keynesian Main idea Keyness policy recommendation is the major tool of promoting economi

9、c growth. Non- Keynesian In fact, to many economists, it began to appear that stabilization policies were actually a major source of renewed instability. A “counterrevolution” began. Monetarism and its central idea. New classical macroeconomics: Lucas and Barro. Advocates of the real business-cycle

10、theory.8Providing a broader framework for macroeconomic analysisThe general theory is limited to short-term economic fluctuations and stabilization policies.Our analysis is pushed further by providing an especially broad view of macroeconomics. Beside the attention on short-term economic fluctuation

11、s and stabilization policies, we focus more attention on other central concerns of macroeconomics,such as the determination of economic growth rate, or balance of payment, etc. Considerable attention has been given to the differences in economic institutions in different countries in order that we d

12、iscover a more general macroeconomic theory. 9Chapter 2 Basic Concepts in MacroeconomicsLooking at different measures of aggregate income and outcome and their interrelationship.The process of aggregating across many different goods and services requires some common unit of measure: the role of pric

13、e and price indexes.A subject that permeates much of discussion in macroeconomics:Flows and Stocks Two factors that influence the Intertemporal decisions of economic agents:Interest Rates and Present Value.Another factor that is vital in understanding decision making across time periods: expectation

14、s 10GDP and GNPWhat are GDP and GNP?How to calculate them? interrelationship of them GNP = GDPNFPGNP per capita and economic well-being 11Real Versus Nominal VariablesThe construction of price indexes Consumer price index or consumer price deflator Pct = w1(P1tP10) + w2(P2t P20) + + WN(PNt PN0) Ct =

15、 nominal consumption expenditure Pct = Pct Ct Pct Deflator for investment spending (PI), government spending (PG), exports (PX), and imports (Pm)12Real GDPTo calculate real production, we think of the GDP of the economy as equal to the product of “average” price level in the economy, multiplied by t

16、he level of real production in the economy. GDP = PQHow to calculate Q ? We start with the definition of Nominal GDP as the sum of final expenditures throughout the economy. Then, we use the price indexes for consumption, investment, government spending, exports and imports to calculate a time serie

17、s of real expenditures for each of these categories. Finally, we can get Q by adding up the sum of final expenditures of these categories.13How can we get P ? Once getting real GDP, Q, then we can compute the GDP price deflator P using the formula as follow: P = GDPQGenerally, we get Real GDP by usi

18、ng the formula as follow: Q = GDP P14Flows and Stocks in MacroeconomyA flow is an economic magnitude measured as a rate per unit of time.A stock is an economic magnitude measured at a point of time. Investment and the capital stockSaving and wealthThe current account and net international investment

19、 positionDeficit and the stock of public debt15Some Intertemporal Aspects of Macroeconomics: Interest Rates and Present ValuesMany key macroeconomics issues involve choices that not only take place in time but that involve decisions about timing. We call the choices involve later as intertemporal ch

20、oice.Two crucial elements in the analysis of intertemporal decisions Interest rates and net present valuesUsing interest rates, we can translate a given time path of money in the future into a present value today. an economic magnitude measured 16The Role of ExpectationAt the time that economic agen

21、ts make intertemporal choices, they are generally uncertain about the future, so they have to formulate some expectations about the future.How do economic agents actually formulate their expectations ?Static expectations Next year is going to be like this year. Adaptive expectations Individuals upda

22、te their expectations about future depending on the extent to which their expectations about present period turned out to be wrong. Rational expectation Individuals make efficient use of all available information. What economic model the individuals is using and just what economic information he or

23、she has at hand. 17Chapter 3 Output Determination: Introducing Aggregate Supply and Aggregate DemandMacroeconomics as the study of economic fluctuationsThe Determination of aggregate supplyThe classical approach to aggregate supplyThe Keynesian approach to aggregate supplyThe determination of aggreg

24、ate demandEquilibrium of aggregate supply and aggregate demandAggregate supply and demand in the short run and the long run18Macroeconomics as the study of economic fluctuationsEconomic fluctuations have been a central concern of macroeconomicsEconomic fluctuations: output and employment fluctuation

25、s Unemployment ratePotential output, current output and output gap When employment fluctuates, so does output, since output is produced using labor inputs. Just as we measure the extent to which employment falls short of the full-employment level, we also can measure the extent to which output falls

26、 short of the level that would be produced if all labor were fully employed. 19 Economic performance is not only measured in terms of the general trend of output, but also in terms of whether the output gap is increasing or decreasing. Okuns law There is a great regularity that a reduction of unempl

27、oyment of 1 percent of labor force in the US was associated with a rise in GNP and fall in the output gap of 3 percent.Business cycle Unlike periods of sustained unemployment, business cycles represent shorter-term fluctuations of output and employment, typically lasting 3-4 years. A key feature of

28、business cycles is that important macroeconomic variables-output, prices, investment, business profits, and various monetary variables-tend to move together in a systematic fashion. 20The Determination of aggregate supplyAggregate supply Definition Aggregate supply is the total amount of output that

29、 firms and households choose to provide, given the pattern of wages and prices in the economy. Optimal supply decision In fact, supply decision bases not only on current wages and prices, but also on expectations about future wages and prices. 21Formulation of aggregate supplyThe Formulation of aggr

30、egate supply is complicated by the fact that there are many kinds of goods in the economy, produced by a very large number of firms and households.Our theoretical framework ignores these complications and assumes that the economy produces a single output.The production Function QQ (K, L, ) In the eq

31、uation, output is a function of the capital and labor used in production and of the state of technology.22The production function has two characteristics: An increase in the amount of any input will make output go up. We assume that the marginal productivity of each factor declines as more of that f

32、actor is used with a fixed amount of the other factor. BQ=(K0,L)QL23QQ(K1K0)Q(K1)LMPLLMPL(K0)MPL(K1 K0)(a) Production function(b) Marginal productivity of labor 24The demand for labor and the output supply function The firm should hire labor until the marginal product of labor input equals the real

33、wage.w/p, MPL (w/p)a (w/p)bLaLbL25 We can summarize these findings by writing the demand for labor as a function of real wage and the levels of capital and technology: LD = LD(w/P, K, ) Using the labor-demand schedule. We can now derive an output supply schedule which shows the amount of output the

34、profit-maximizing firm will supply at each level of w/p, K, and . QS = QS LD(w/P, K, ) ， K, Note that QS is a negative function of w/p for an “indirect” reason. 26 Note also that QS is a positive function of K and ,for direct and indirect reasons. More simply, output supply is a negative function of

35、 w/p and a positive function of K and : QS = QS (w/P, K, )The Supply of Labor The supply schedule for labor, LS Labor-supply decision: Household must choose between supplying labor and enjoying leisure, the so-called Labor-leisure decision.27 Assumptions A worker must choose only between labor and l

36、eisure and in which he consumes all his wage earnings,which are his only source of income. The worker can choose to work any number of hours per day. UL = UL(C, L) 28CLUL2UL1UL0LC0LC1 C0AB29How much labor and consumption workers actually choose depends both on the utility function and on the real wa

37、ge level.C0 = (w/p) 0 C1 =3 (w/p) 0CLZ1(w/p) 1 (w/p) 0 Z0 (w/p) 0 12330CLUL2UL1Z1(w/p) 1 Z2(w/p) 2 C2C1(w/p)L(w/p) 1(w/p) 2L 1L 231Substitution effect and Income effect Substitution effect means that each hour of leisure represents a greater amount of forgone consumption of goods when the real wage

38、goes up. With leisure more expensive, households “substitute” away from it and choose longer working hours. Income effect works to reduce labor supply when wages increase. The effect of a rise in wages on the supply of labor is theoretically ambiguous: the substitution effect tends to increase L, th

39、e income effect tends to decrease L. The relative influence of these two effects depends on household preferences. 32The Classical Approach to Aggregate SupplyWe already derived the Aggregate supply function, the demand for labor, and the supply of labor. Now we combine these and summarize the resul

40、ts in an aggregate supply curve.The Main idea of classical approach For any price level, the nominal wage is fully flexible and adjusts to keep the supply of labor and the demand for labor equilibrated. Thus, the real wage is determined so as to clear the labor market.33QLQfQ(K0, L)(w/p)LLfLDLSPQQS3

41、4Deriving the aggregate supply curve How does the supply of aggregate output respond when the price level increase?35QL(w/p)LPQ36Unemployment in the classical approach Amendments to the basic model One amendment allows for the fact that some people may choose voluntarily to be unemployed, at least f

42、or short periods of time. A second amendment emphasizes that various forces in the labor market- laws, institutions, traditions- may prevent the real wage from moving to its full-employment level. If the real wage is stuck above the full-employment level, the unemployment results.37The Keynesian app

43、roach to aggregate supply Assumption: Nominal wages and prices do not adjust quickly to maintain labor-market equilibrium. Sticky wages Long-term labor contracts As the price level(P) rises, the real wage falls, the desired level of labor input goes up, the desired level of output supply also rises.

44、 As a result, the aggregate supply curve is upward sloping. 38 Involuntary unemployment Involuntary unemployment is that some people who are willing to work at the wage received by other workers of comparable ability cannot do so. Why does involuntary unemployment arise? Nominal wage rigidity(Keynes

45、ian) Real wage rigidity(classical theory)Aggregate Supply: a summary classical aggregate supply Keynesian aggregate supply extreme Keynesian aggregate supply39QsQsQsPQQQ40The determination of aggregate demand The equilibrium level of output and the price level over an entire economy is determined by

46、 the interaction of aggregate supply and aggregate demand. The structure of aggregate demand with a closed economy QD = C + I + G Aggregate demand curve Real Balance Effect One immediate effect of a price increase is to reduce the real value of money held by the public. 41 If people hold a given amo

47、unt of currency and bank balances and the price level rises,they will be able to buy fewer goods with their money. PQBAP1P0QD1QD042In an open economy, aggregate demand is the total amount of domestic goods demanded at the given level of prices by both domestic and foreign purchasers. The aggregate d

48、emand schedule in the open economy is still down-word-slope.In the open economy, as in the closed economy, a rise in the price level tends to cause a fall in aggregate demand. A rise in domestic prices compared with foreign prices makes it more expensive to buy domestic goods and relatively less exp

49、ensive to buy foreign goods. 43The Equilibrium of Aggregate Supply And Aggregate DemandThe aggregate supply-aggregate demand framework is useful apparatus for determining the equilibrium of output and the price level. We can use this framework to study the effects of specific economic policies as we

50、ll as of external shocks on the equilibrium levels of Q and P. Output market equilibrium is given by the intersection of the aggregate demand curve and aggregate supply schedule. This equilibrium will also determine the level of employment in the economy.44Equilibrated level of output does not signi

51、fy the optimal level of output. There might by output gap.Change on equilibrium: Demand sideAggregate demand expansion Changes in monetary, fiscal, and exchange-rate policies shift the position of aggregate demand schedule. Expansionary monetary, and fiscal policies and devaluated exchange-rate poli

52、cy can result in aggregate demand expansion45PA demand expansion in the classical caseQQSQDQDP1P0Qo46A demand expansion in the Keynesian casePQQDQDP1P0QSQoQ147A demand expansion in the Keynesian extreme casePQQDQDPQSQoQ1-48 Under classical conditions, a rise in aggregate demand leads only to a rise

53、in prices, with no effect on output. In the keynesian case, an aggregate demand expansion raises output (and employment) as well as the price level. It leads to the important conclusion that policy changes can, in the keynesian case, affect output. Change on equilibrium: supply side A supply shock:

54、once-and-for-all technological improvement49A technological improvement in the Classical case PQQDP0QS0QoQ1QS1P150A technological improvement in the basic Classical casePQQDP0QS0QoQ1QS1P151A technological improvement in the extreme Classical casePQQDP0=w/a0QS0QoQ1QS1P1=w/a152Source of economic fluct

55、uation Macroeconomists differ about the shape of the aggregate supply schedule. Macroeconomists differ about the relative importance of the different kinds of shocks that hit an economy.Aggregate Supply And Demand In The Short Run And The Long Run Keynes stressed nominal wages do not necessarily adj

56、ust instantly to maintain full employment. But Keynes himself, and later economists working in his tradition, recognized nominal wages are not truly fixed; they simply adjust slowly to imbalances of aggregate demand.53Dynamic equation for wages W+1= (W+1 W)/ W W+1 = a(Q Qf )Short- and long-term Effe

57、cts of an aggregate demand Contraction 54PQQDQDP0P1QSQSEAEP2Q1Qf55Short-term Effects of an aggregate demand Contraction Aggregate demand declines, the immediate result is to shift output from Qf at point E down to Q1 at point A.long-term Effects of an aggregate demand ContractionWith the reduction o

58、f output, nominal wages tend to fall. And as nominal wages fall, the aggregate supply curve shift to the right56After the full adjustment of nominal wages,output is back to the full-employment level, and the full effect of the shock to aggregate demand appears as lower prices rather than lower outpu

59、t.Economy shows Keynesian properties in the short run and classical properties in the long run. In this sense, the debate between modern Keynesian and modern classical economists is mainly about timing.57Chapter 4 Consumption and Saving Central issue: How households divide their income between consu

60、mption and saving.Major topics: National Consumption and Saving The Basic Unit: The Household The Intertemporal Budget Constrain Household Decision Making The permanent-Income Theory of Consumption 58 The Life-Cycle Model of Consumption and Saving Household Liquidity Constrains and Consumption Theor