13.1 Simple Closed Model ■ Simple closed model ● Aggregate demand income equation: Z=C+I+G do MPC: CY ∈(0,1) OⅠ investment: Iy >0.I <0, aY lemand for mone:WD0≈oL <0 复表经济学院
13.1 Simple Closed Model ◼Simple closed model ⚫Aggregate demand： 0, 0 0, 0; (0,1); equation = = = = = = + + i L L Y L demand for money L r I I Y I investment I dY dC MPC C income Z C I G Y i Y r Y ： ： ： ：
13.1 Simple Closed Model ■ Simple closed mode ● Aggregate supply: Y-Y H Y Y-Y GDP gap H: general function relation; real rate of inflation; TI:expectation of rate of inflation 复表经济学院
13.1 Simple Closed Model ◼Simple closed model ⚫Aggregate supply： _ 1 _ _ _ ( ) real rate of inflation ex of Y Y P H P Y Y Y GDP gap Y H general function relation P P pectation of rate inflation • − • − = − − ： ； ： ； ： ； ：
13.1 Simple Closed Model ■ Simple closed model OWhat is gdp gap: . The GDP gap is the difference between real rate of inflation and the expectation of ◆ H-function: kEynes school: H is a almost horizontal line ONew-classical school:H is a vertical line 复表经济学院
13.1 Simple Closed Model ◼Simple closed model ⚫What is GDP gap： ◆The GDP gap is the difference between real rate of inflation and the expectation of ◆H-function： Keynes school: H is a almost horizontal line。 New-classical school: H is a vertical line
Principle of Price from: Yuan zhigang“ Macroeconomics”p.320 P Change price for long run A t+1 复具学经济学院
Principle of Price from: Yuan zhigang “Macroeconomics”p.320 P t t t+1 A Change in price for long run
13.1 Simple Closed Model aSimple closed model ■ Short run:P= constant,P≠0 ◆ variables:Y,r,C,l, OLong run: P=variables, P 复表经济学院
13.1 Simple Closed Model ◼Simple closed model ◼Short run：P=constant， ◆variables：Y，r，C，I， ⚫Long run：P=variables， 0 • P • P