Macroeconomic Ideas, Business Cycles and Economic Policies: One Size Doesn’t Fit All - A Primer
178 Pages Posted: 25 Nov 2014 Last revised: 22 Dec 2016
Date Written: December 21, 2016
Abstract
The lecture notes describe different views in macroeconomics – i.e. how to explain the business cycle and to design economic policy ‐ using a modified workhorse AS AD model, in order to include in the simplest way uncertainty, expectations and the role of banking and finance. The bottom line is to show pedagogically that one size – i.e. a unique economic mainstream – doesn’t fit all – i.e. cannot explain different national and historical business cycles. Therefore it is necessary to know more than one macroeconomic views, and history, politics and empirics matters in disentangling the pros and cons of each of them.
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