CHAPTER THIRTEEN Aggregate Supply macroeconomics N.Gregory Mankiw College of Management,HUST
macroeconomics N. Gregory Mankiw macro College of Management, HUST CHAPTER THIRTEEN Aggregate Supply
Learning objectives -The model of aggregate supply in which output depends positively on the price level in the short run the short-run tradeoff between inflation and unemployment known as the Phillips curve CHAPTER 13 Aggregate Supply slide 1
CHAPTER 13 Aggregate Supply slide 1 Learning objectives ▪ The model of aggregate supply in which output depends positively on the price level in the short run ▪ the short-run tradeoff between inflation and unemployment known as the Phillips curve
Content 1.Short-run Aggregate supply curve 2.Keynes AS vs.classical AS 3.The Phillips curve 4.Three causes of changing inflation 5.Disinflation(制止通货膨胀)and the sacrifice ratio 6.Hysteresis(带后作用)hypothesis 7.Chapter summary CHAPTER 13 Aggregate Supply slide 2
CHAPTER 13 Aggregate Supply slide 2 Content 1. Short-run Aggregate supply curve 2. Keynes AS vs. classical AS 3. The Phillips curve 4. Three causes of changing inflation 5. Disinflation(制止通货膨胀) and the sacrifice ratio 6. Hysteresis (滞后作用)hypothesis 7. Chapter summary
Three models of aggregate supply 1.The sticky-wage model 2.The imperfect-information model 3.The sticky-price model All three models imply: Y=Y+a(P-Pe) agg. the expected output price level a positive natural rate parameter the actual of output price level CHAPTER 13 Aggregate Supply slide 3
CHAPTER 13 Aggregate Supply slide 3 Three models of aggregate supply 1. The sticky-wage model 2. The imperfect-information model 3. The sticky-price model All three models imply: ( ) e Y Y P P = + − natural rate of output a positive parameter the expected price level the actual price level agg. output 1
The sticky-wage model Assumes that firms and workers negotiate contracts and fix the nominal wage before they know what the price level will turn out to be. The nominal wage,w,they set is the product of a target real wage,o,and the expected price level: W=@x Pe W =0X CHAPTER 13 Aggregate Supply slide 4
CHAPTER 13 Aggregate Supply slide 4 The sticky-wage model ▪ Assumes that firms and workers negotiate contracts and fix the nominal wage before they know what the price level will turn out to be. ▪ The nominal wage, W, they set is the product of a target real wage, , and the expected price level: W e = ω P W P e ω P P = 1