Brief Outline of Topics Covered in Lecture 10
Chapter 21 The Monetary Policy and Aggregate Demand CurvesChapter 22 Aggregate Demand and Supply AnalysisThe MP Curve
- Shifts in the MP curve
- Slope of the MP curve
The Aggregate Demand Curve
- Shifts in the AD curve
The Aggregate Supply Curve
- LRAS curve
- SRAS curve
- Shifts in the LRAS curve
- Shifts in the SRAS curve
- Equilibrium of AS and AD
- SR and LR response to AD shocks
- SR and LR response to AS shocks
Video
Extra Reading:
This is from the SF Fed:
Credit Access Following a Mortgage Default, by William Hedberg and John Krainer, FRBSF Economic Letter: Borrowers who default on mortgages return to the mortgage market at extremely slow rates. Only about 10% of borrowers with a prior serious delinquency regain access to the mortgage market within 10 years of their default. Borrowers who terminate mortgages for reasons other than default return to the market about two-and-a-half times faster than those who default. Renewed access to credit takes even longer for subprime borrowers with a serious delinquency on their record. [more here]
And, one more, UCSD economist Jim Hamilton on the economic damage from hurricane Sandy:
... One parallel to consider is the devastation from Hurricane Katrina in 2005. In addition to the short-run dislocations, this ended up causing lasting damage to offshore oil-producing infrastructure. An optimist might have thought this would create all kinds of new jobs trying to rebuild. The actual experience was not so cheerful.
Seasonally adjusted nonfarm employment in Louisiana, 2004:M1 - 2007:M12, in thousands of workers. Vertical line marks Hurricane Katrina in August 2005. Data source: BLS.
The Wall Street Journal reports that IHS estimates that Hurricane Sandy could reduce the 2012:Q4 U.S. real GDP growth rate by 0.6 percentage points at an annual rate. I'm not sure how one comes up with that kind of number. But I am persuaded this was not a good thing for the U.S. economy.
