Macroeconomic Theory and Policy: Analyzing Income and Unemployment Trends
Explore the dynamics of real income, unemployment rates, long-run trends, and cyclical components in macroeconomic theory and policy. Discuss the relationship between income, output, and unemployment in both short-run and long-run perspectives.
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Presentation Transcript
ECON 602 MACROECONOMIC THEORY AND POLICY SHORT-RUN AND LONG-RUN FLUCTUATIONS September 20-22, 2022
Real Income Cycle (after removing Long-Run trend)
Unemployment Rate Cycle (after removing Long-Run trend)
Cyclical Components of Output (Income) and Unemployment
Income (Output) and Unemployment: Long-Run and Short-Run Relationships Economists argue that long-run income (output) is primarily determined by aggregate supply. Growth Accounting Deeper View of Growth For class discussion: 1) Is long-run unemployment related to long-run income (output)? 2) Would it be good if the long-run unemployment rate were zero? 3) Is short-run unemployment related to short-run income (output)?
