Equilibrium (равновесие)

Macroeconomic models

«AD - AS» MODEL

Equilibrium (равновесие)

- the intersection of the AD and AS curves determines the economy’s equilibrium price level and equilibrium real domestic output.

Equilibrium

Equilibrium can be

1) Beyond full-employment (Y3)

- Characterized by very low unemployment

2) Below full-employment(Y1)

- hight unemployment

3) At full employment (Y2)

- stable prices (low inflation)

ratchet affect (эффект хроповика)

- is the commonly observed phenomenon that some processes cannot go backwards once certain things have happened

- The producers observe that shifting - down AD leads to changes in equilibrium, but not in the price level. Prices are stable.

The Keyn’s equilibrium model

- The condition of equilibrium is the equal quantity of aggregate expenditures (AE) and aggregate output (AV)

- AE: C + I +G + Xn

- AV: GDP

Simplifications

1. A «closed economy» - there are no internetional transactions.

2. A «private» economy - we ignoregoverment’s

3. All savings are personal.

4. GDP, NI, DI a re equal to each other

The Keyn’s equilibrium model

- Assume, the private ecconomy is closed

- The equilibrium GDP will change in response to changes in the investment or consumption schedules.

- Suppose, the expected rate of return on I rises, shifting the investment demand curve to the right.

Consumption Savings

- DI is the basic determinant of consumption and personal savings.

- Households can consume more than their incomes by liquidating (selling for cash) accu mulated wealth or by borrowing - C0.

Consumption Savings

- The 45 degree line represents DI=C, if households were to consumer 100% of their DI at every level of DI.

Average propensities

- The fraction, or percentage, of any total income which is consumed is called the average propensity to consume.

APC = C/DI

(средняя склонность к потреблению - APC)

-The fraction, or percentage, of any total income which is saved is the average propensity to save.

APC = S/DI

The fraction of DI which is consumed declines as DI rises

Marginal Prorensities

- The proportion of any change in income consumed is called the marginal propensity to consume.

- The fraction of any change in income saved is the marginal propensity to save.

C and S

C = C0 + MPC (DI)

S = -C0 + MPS (DI)

Nonincome determinants of C and S:

- Wealth (real and financial assets) - the greater the wealth households have accumulated, the larger th e amount of C and the smaller the amount of S of any level of current account.

- Expectations about future prices, income, goods avalible

- Household Debt. When consumers increase their debt, they can increase their current C. But whebn levels of debt get abnor

- Taxation.

The multiplier effect

- The change in investment leads to a larger change in output and income. This result is called - the multiplier effect.

- It determines how much larger is the ratio of a change in equilibriu GDP to the initial change in investment.

Mi = (tr) GDP / (tr) I

or

Mi = 1 / (1 - MPC) = 1 / MPS

I = 100 MPC=0,8

Доход C S

100р 80 20

80р 64 16

64р 51,2 12,8 геометрическая прогрессия

в итоге сумма дохода в экономике - 500

потребления - 400

сбережения - 100

MI = 1/MPS = 1/ 1-0,8 = 1/0,2 = 5

Дата добавления: 2015-11-04