lecture 1 macroeconomic modeling. simple model y=c+i c=αy ad=c+i defination c=αy behavior function...
DESCRIPTION
Assumptions: Individual sector Sectors business sector Institual Assumption Market: Goods market Individual: Get all income, Behavior consumption, saving Assumption Business: production, services, InvestmentTRANSCRIPT
Lecture 1Macroeconomic Modeling
Simple Model
Y=C+I C=αY
AD=C+I DefinationC=αY Behavior Function
Y=AD Equilbrium Assumption (Keyesian Assumption)
Assumptions: Individual sector Sectors business sector InstitualAssumption Market: Goods market Individual: Get all income , Behavior consumption , saving Assumption Business: production, services , Investment
Equilibrium Assumptions: Keyesian Assumption: Y=AD
Output-Adjustment (or Quantity-Adjustment)
Price-Adjustment Adaptive
1 2
AD=C+IC= Y- PY= (AD-Y)
1 1( )t t t ty AD y y
Flow-Chat Individual
Business
Saving
AS
ADGoods market
Causuality :
① I AD Y C① ③ ②
Multiplier( 对应上图假设 I 增加一个单位 )
period 1 1 1 1 period 2 0 period 3 0 …………………………………… Period n 0
Total change: When
2 2
3
2
2 ny=1+ + + + 1,0 1 Total y=
1-n
1n nn
Simple & Beauty :
y=C+I ① C=αy ② substitute ② into , we get:① y=I*1/(1-α) then △ y= I*1/(1-α)△
Extension: Government
Assumption:
G (spending)Government T (taxing) TR (transfer)
Taxation: T=t0 + ty
Case1:t0 <0 , 0<t<1 t
t1 t2
0 y1 y2 y
Taxation: T=t0 + ty
Case2:t0 >0 , 0<t<1 t
t1 t2
0 y1 y2 y
Taxation: T=t0 + ty
Case3:t0 =0 , 0<t<1,T=ty Proportional Tax
Case4:t0 =0,T= t0 Lump-sum Tax
Consumption Function
C=α =y-T+TR
dydy
Model
ADyttyTTRTyy
yC
GICAD
d
d
假定為比例稅率)(10,
Flow-Chart
Individual
Business
y
yd
Saving
AD
AS
Government
Good market
Policy Analysis
財政政策 T(t),TR,G
y=1 [ ]
1 (1 )I G TR
t
1 1, ,1 (1 ) 1 (1 ) 1 (1 )
y G y I y TRt t t
Policy Design
① Maths: ② Targets :Case I:
Case II:
yxyxyxyxyx ),(,)(
12
cy
20( ( ) 0)
yBudget G T G T
Policy Design
③ Environment Analysis:Uncontrable Exogenous Variable:
④ Policy Design :I
,0 1
,0 1
d
d
AD C I G
C y
y y T TRT t y t y ty AD
Policy Design
Case I: Assumption: =0
2 1 0
1
22
d
d
G
y
y T TRT t y t
11 (2 2 )G
t y t TR
I
Policy Design
(1)
(2)
tTR
Gt
2211
0
y
tt
G
TR )]1(21[
1
0
Policy Design
(3)
10
1 (2 2 )G
TRt y t TR
,0t
IS-LM Model: Financial sector, assets market
Financial sector Assumption: earning assets : Assets market stock ,bond non-earning assets:money
interest rate 按 Walras’law, 只要两个市场均衡,则第三个市场会自动达到均衡,所以 IS-LM Model 只研究 goods mar
ket &non-earning assets market.
Goods market
IS curse
00
01 1 ( ) ( )
AD C I GC Y
Y Y I r GI I rY AD
r I G Y
Money Market
LM curve
dm
1 ( )( )
s ss
s d
s
kY lr
M Mm kY lrp p
m m
M kr Yl p l
Equilibrium : IS-LM
Macroeconomic database :
Industrial output--------y CPI----------Price G T TR
m0 m1 m2 loan
The end