宏观英文课件ch13.ppt

Learning objectives three models 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 Three models of aggregate supply The sticky-wage model The imperfect-information model The sticky-price model All three models imply: 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: The sticky-wage model If it turns out that The sticky-wage model Implies that the real wage should be counter-cyclical , it should move in the opposite direction as output over the course of business cycles: In booms, when P typically rises, the real wage should fall. In recessions, when P typically falls, the real wage should rise. This prediction does not come true in the real world: The cyclical behavior of the real wage The imperfect-information model Assumptions: all wages and prices perfectly flexible, all markets clear each supplier produces one good, consumes many goods each supplier knows the nominal price of the good she produces, but does not know the overall price level The imperfect-information model Supply of each good depends on its relative price: the nominal price of the good divided by the overall price level. Supplier doesn’t know price level at the time she makes her production decision, so uses the expected price level, P e. Suppose P rises but P e does not. Then supplier thinks her relative price has risen, so she produces more. With many producers thinking this way, Y will rise whenever P rises above P e. The sticky-price model Reasons for sticky prices: long-term contracts between firms and customers menu costs firms do not wish to annoy customers with frequent price changes Assumption: Firms set their own prices (e.g. as in m