Brief Outline of Topics Covered in Lecture 16
Chapter 25 Rational Expectations and Implications for Policy [cont.]
- New Classical Macroeconomics Model
- Effects of unanticipated and anticipated policy
- Can an expansionary policy lead to a decline in aggregate output?
- Policy ineffectiveness and implications for policymakers
- New Keynesian Model
- Effects of unanticipated and anticipated policy
- Implications for policymakers
- Comparisons of New Classical, New Keynesian, and Traditional Keynesian Models
- Short-Run Output and Price Responses
Materials from class:
Additional Reading:
Application:
The CBO says the stimulus package worked. See " Estimated Impact of the American Recovery and Reinvestment Act on Employment and Economic Output as of September 2009, CBO."
Here's the key table from the report: