北京外国语大学《宏观经济学》课件-第9-10章Keynesian model.pptxVIP

MACROECONOMICS北京外国语大学《宏观经济学》 Chapter 9 10Keynesian modelMultiplier, fiscal policy, budget surplusIS-LM modelAggregate demand 2023/4/213Keynesian modelAssumptions: (1) Price level doesn’t change (2) Firms are willing to sell any level of output (i.e., firms have excessive capacity)Output is solely determined by aggregate expenditure ( or aggregate demand). 2023/4/214AEIntercept 0, autonomous ADYAE0 Slope 1, marginal propensity to consume 2023/4/215AEEquilibrium: AE = YYAEY045? 2023/4/216AE YAEYAEY0AE0Unplanned inventory (IU) 2023/4/217Two-sector model 2023/4/218Four-sector model 2023/4/219Exercise: another four-sector model Chapter 9 10Keynesian modelMultiplier, fiscal policy, budget surplusIS-LM modelAggregate demand 2023/4/2111Multiplier 2023/4/2112Dynamic process of multiplier effect 2023/4/2113AEY 2023/4/2114Fiscal Policy 2023/4/2115Exercise Automatic stabilizersAutomatic stabilizer: reduces the amount by which output changes in response to a change in autonomous demand.e.g:Income taxUnemployment benefit 2023/4/2117Budget surplusThe budget surplus is defined as BS = TA – G – TR Under the assumption of income taxes, 2023/4/2118Effect of G on BS 2023/4/2119Balanced budget theoremWhen government purchases and taxes are increased by an equal amount, then equilibrium output rises by the increase in government purchases and no more. That is, the balanced budget multiplier is equal to 1. 2023/4/2120Full-employment budget surplus 2023/4/2121Full-employment budget surplus Chapter 9 10Keynesian modelMultiplier, fiscal policy, budget surplusIS-LM modelAggregate demand Reconsider the Keynesian ModelEquilibrium: Y=AEFour sectors: AE = C+I+G+NXC=?I=?We suppose that investment I is exogenous. Is that reasonable? Investment and the Interest RateWhich factor affect investment most?Interest rates are the cost of borrowing moneyThe investment spending function can be specified as:i = rate of interest b = the responsiveness of investment spending