宏观经济学英文版第六章.ppt

In IS-LM model ,we ,in effect ,assumed that the price level is constant ,that means that firms were able and willing to supply any mount of output at a given price level .So long as our focus was on the short run ,this assumption was acceptable .But ,as our attention turns to the medium run ,we must abandon this assumption ,explore how price and wage adjust over time ,and determine how this ,in turn ,affect output . So once we consider firms’ responding to an increase in demand by increasing production ,a sequence of events may take place in the way as following feedback loop : Higher production leads to higher employment. Higher employment leads to lower unemployment. Lower unemployment leads to higher wages. Higher wages leads to higher price level . Higher price level leads to higher wages. And so on Why Do Economists Care About Unemployment? Economists care about unemployment for two reasons: Because of its direct effects on the welfare of the unemployed. Because it signals that the economy may not be using some of its resources efficiently. A Tour of the Labor Market The noninstitutional civilian population are the number of people potentially available for civilian employment. The civilian labor force is the sum of those either working or looking for work. Those who are neither working nor looking for work are out of the labor force. The participation rate is the ratio of the labor force to the noninstitutional civilian population. The unemployment rate is the ratio of the unemployed to the labor force. The Large Flows of Workers The Large Flows of Workers AS an airport full of passengers ,an unemployment rate may reflect two very different realities: An active labor market, with many separations （析出）and many hires, or A sclerotic(动脉硬化), with few separations, few hires, and a stagnant unemployment pool. The Large Flows of Workers The Large Flows of Workers From the CPS data we conclude that: The Large Flows of Workers From the CPS d