教程經(jīng)濟(jì)學(xué)mankiw宏觀7e-yym chap13as

1、Aggregate Supply and the Short-run Tradeoff Between Inflation and Unemployment13In this chapter, you will learn:two models of aggregate supply in which output depends positively on the price level in the short runabout the short-run tradeoff between inflation and unemployment known as the Phillips c

2、urveIntroductionIn previous chapters, we assumed the price level P was “stuck” in the short run. This implies a horizontal SRAS curve. Now, we consider two prominent models of aggregate supply in the short run:Sticky-price modelImperfect-information modelIntroductionBoth models imply:natural rate of

3、 outputa positive parameterexpected price levelactual price levelagg. outputOther things equal, Y and P are positively related, so the SRAS curve is upward-sloping.The sticky-price modelReasons for sticky prices:long-term contracts between firms and customersmenu costsfirms not wishing to annoy cust

4、omers with frequent price changesAssumption:Firms set their own prices (e.g., as in monopolistic competition).The sticky-price modelAn individual firms desired price is:where a 0. Suppose two types of firms:firms with flexible prices, set prices as abovefirms with sticky prices, must set their price

5、 before they know how P and Y will turn out:The sticky-price modelAssume sticky price firms expect that output will equal its natural rate. Then,To derive the aggregate supply curve, first find an expression for the overall price level. s = fraction of firms with sticky prices. Then, we can write th

6、e overall price level as The sticky-price modelSubtract (1s)P from both sides:price set by flexible price firmsprice set by sticky price firmsDivide both sides by s :The sticky-price modelHigh EP High PIf firms expect high prices, then firms that must set prices in advance will set them high.Other f

7、irms respond by setting high prices.High Y High P When e is high, the demand for goods is high. Firms with flexible prices set high prices. The greater the fraction of flexible price firms, the smaller is s and the bigger is the effect of Y on P. The sticky-price modelFinally, derive AS equation by

8、solving for Y :The imperfect-information modelAssumptions:All wages and prices are perfectly flexible, all markets are clear.Each supplier produces one good, consumes many goods.Each supplier knows the nominal price of the good she produces, but does not know the overall price level.The imperfect-in

9、formation modelSupply of each good depends on its relative price: the nominal price of the good divided by the overall price level.Supplier does not know price level at the time she makes her production decision, so uses EP. Suppose P rises but EP does not. Supplier thinks her relative price has ris

10、en, so she produces more. With many producers thinking this way, Y will rise whenever P rises above EP. Summary & implicationsBoth models of agg. supply imply the relationship summarized by the SRAS curve & equation.Y PLRASSRASSummary & implicationsSuppose a positive AD shock moves output above its

11、natural rate and P above the level people had expected. Y PLRASSRAS1SRAS equation:AD1AD2Over time, EP rises, SRAS shifts up,and output returns to its natural rate.SRAS2Inflation, Unemployment, and the Phillips CurveThe Phillips curve states that depends onexpected inflation, E.cyclical unemployment:

12、 the deviation of the actual rate of unemployment from the natural ratesupply shocks, (Greek letter “nu”).where 0 is an exogenous constant.Deriving the Phillips Curve from SRASComparing SRAS and the Phillips CurveSRAS curve: Output is related to unexpected movements in the price level.Phillips curve

13、: Unemployment is related to unexpected movements in the inflation rate. Adaptive expectationsAdaptive expectations(適應(yīng)性預(yù)期): an approach that assumes people form their expectations of future inflation based on recently observed inflation. A simple version: Expected inflation = last years actual infla

14、tionThen, P.C. esInflation inertiaIn this form, the Phillips curve implies that inflation has inertia: In the absence of supply shocks or cyclical unemployment, inflation will continue indefinitely at its current rate.Past inflation influences expectations of current inflation, which in turn influen

15、ces the wages & prices that people set. Two causes of rising & falling inflationcost-push inflation: inflation resulting from supply shocksAdverse supply shocks typically raise production costs and induce firms to raise prices, “pushing” inflation up.demand-pull inflation: inflation resulting from d

16、emand shocksPositive shocks to aggregate demand cause unemployment to fall below its natural rate, which “pulls” the inflation rate up. Graphing the Phillips curveIn the short run, policymakers face a tradeoff between and u. u The short-run Phillips curveShifting the Phillips curvePeople adjust thei

17、r expectations over time, so the tradeoff only holds in the short run. u E.g., an increase in E shifts the short-run P.C. upward.The sacrifice ratioTo reduce inflation, policymakers can contract agg. demand, causing unemployment to rise above the natural rate.The sacrifice ratio measures the percent

18、age of a years real GDP that must be foregone to reduce inflation by 1 percentage point. A typical estimate of the ratio is 5.The sacrifice ratioExample: To reduce inflation from 6 to 2 percent, must sacrifice 20 percent of one years GDP:GDP loss = (inflation reduction) x (sacrifice ratio) = 4 x 5Th

19、is loss could be incurred in one year or spread over several, e.g., 5% loss for each of four years.The cost of disinflation is lost GDP. One could use Okuns law to translate this cost into unemployment.Okuns Law: the negative relationship between GDP and unemploymentRational expectations（理性預(yù)期） Ways

20、of modeling the formation of expectations: adaptive expectations: People base their expectations of future inflation on recently observed inflation.rational expectations:People base their expectations on all available information, including information about current and prospective future policies.

21、Painless disinflation?Proponents of rational expectations believe that the sacrifice ratio may be very small:Suppose u = un and = E = 6%,and suppose the Fed announces that it will do whatever is necessary to reduce inflation from 6 to 2 percent as soon as possible.If the announcement is credible, th

22、en E will fall, perhaps by the full 4 points. Then, can fall without an increase in u. Calculating the sacrifice ratio for the Volcker disinflation1981: = 9.7%1985: = 3.0%yearuu nuu n19829.5%6.0%3.5%19839.56.03.519847.46.01.419857.16.01.1Total 9.5%Total disinflation = 6.7% Calculating the sacrifice

23、ratio for the Volcker disinflationFrom previous slide: Inflation fell by 6.7%, total cyclical unemployment was 9.5%.Okuns law: 1% of unemployment = 2% of lost output.So, 9.5% cyclical unemployment = 19.0% of a years real GDP.Sacrifice ratio = (lost GDP)/(total disinflation)= 19/6.7 = 2.8 percentage

24、points of GDP were lost for each 1 percentage point reduction in inflation.The natural rate hypothesisOur analysis of the costs of disinflation, and of economic fluctuations in the preceding chapters, is based on the natural rate hypothesis:Changes in aggregate demand affect output and employment on

25、ly in the short run. In the long run, the economy returns to the levels of output, employment, and unemployment described by the classical model (Chaps. 3-8).An alternative hypothesis: HysteresisHysteresis（滯脹）: the long-lasting influence of history on variables such as the natural rate of unemployme

26、nt.Negative shocks may increase un, so economy may not fully recover.Hysteresis: Why negative shocks may increase the natural rateThe skills of cyclically unemployed workers may deteriorate while unemployed, and they may not find a job when the recession ends.Cyclically unemployed workers may lose their influence on wage-setting; then, insiders (employed workers) may bargain for higher wages for themselves.Result: The cyclically unemployed “outsiders” may e structurally unemployed when the recession ends.Chapter Summary1.Two models of aggregate supply in the sho