Is there a core of usable macroeconomics?
Article Abstract:
A core of practical macroeconomics is nearly similar in essence to the neo-classical synthesis. The core is founded on the propositions that trends in economic activity are governed by aggregate demand in the short run, and that the economy is inclined to go back to a stationary state over time. The proposals present a complicated representation of the impact of macroeconomic policy and of shocks. Bigger budget deficits can raise investment and output in the short run, but they can reduce output and capital in the long run.
Publication Name: American Economic Review
Subject: Economics
ISSN: 0002-8282
Year: 1997
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Is there a core of usable macroeconomics we should all believe in?
Article Abstract:
Aggregate demand impulses, in the usable core of macroeconomics, are the primary factors governing the variations in the trend of potential output. A suitable device for analyzing the trend movement is some model of the different sources of expenditures. A preferred choice is to opportunistically model the major parts of aggregate demand. Investment functions, import functions and consumption functions are made to look as if they could result from an aggregation of economic behavior at the micro level.
Publication Name: American Economic Review
Subject: Economics
ISSN: 0002-8282
Year: 1997
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One little piece of Irving Fisher
Article Abstract:
Irving Fisher's most relevant contribution to economics is the introduction of the 'real side of the theory of interest.' His works 'Changes in the Wholesale Price Index in Relation to Factory Employment' in 1936 and 'A Statistical Relation Between Unemployment and Price Changes' in 1926 introduced distributed lag to economics. Fisher argued that wholesale price changes explain the employment rate. He proved that corporate financial constraints lowers prices, profits, production and employment.
Publication Name: American Economic Review
Subject: Economics
ISSN: 0002-8282
Year: 1997
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