Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Q. Augmented Phillips curve?
Remember that Phillips curve, as it was incorporated into the Keynesian model, presumed a stable relationship between wage inflation andunemployment: for a given level of unemployment (say U = 5%), a given level of wage inflation would apply (say Πw = 4%). As U increased, Πw would fall and vice versa.
Mathematically, Phillips curve may be explained by a decreasing function f as Πw = f(U). In neo-classical synthesis, expected inflation is added and Πw = f(U) + Πe. To justify this amendment, imagine U = 5% and Πw = 4% (so that we are on Phillips curve) and expected inflation rises from 4% to 6%. As employees care about real wages, it's reasonable to presume that Πw will increases as well (for a given U) and Phillips curve will shift upwards.
Figure: The augmented Phillips curve
According to synthesis, Phillips curve should be drawn for a given value of Πe and it should be shifted upwards (downwards) as Πe increases (decreases). When position of Phillips curve is allowed to depend on Πe, is known as augmented Phillips curve (or expectations-augmented Phillips curve). This amendment to Phillips curve is actually a consequence of a criticism of conventional Phillips curve and Keynesian model from the late 1960's (Keynesian - Monetarism debate).
A scientist has been studying the organisms colonising the pilings underneath a wharf in Sydney Harbour. He postulates two factors might make these communities of sponges, worms, a
Government revenue, government spending and net exports G, NT and NX are exogenous variables in the classical model In the classical model (and
Compare Money with wealth and income Money isn't the same as wealth. An individual may be very wealthy however have no money (for instance by owning stocks and real estate). An
The mundelfleming model takes the world interst rate r* as anexogenous variable.Let,consider what happen when this variable changes.a,what maight cause the world interest rate tori
Because of high production-changeover time and costs, a director of manufacturing must convince management that a proposed manufacturing method reduces costs before the new method
Describe the differences between the substitution effect of a wage increase and the income effect of a wage increase.
Determine the Gross domestic product Gross domestic product is the total value of an economy's domestic output of goods and services. Gross national product is the similar as
The monetary system in any economy facilitates trade and allows people to trade more efficiently, as compared to a barter economy. In the United States, the monetary authority is t
Institutional Setting for Trade Policy Formulation: While the Ministry of Commerce has the main responsibility of formulating India's trade policy, it also seeks policy inputs
# ???? .. difference between gdp at market price and nnp at factor cost
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd