advanced macroeconomics book

Sanjay Rode
Advanced Macroeconomics
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2

Sanjay Rode
Advanced Macroeconomics
Download free eBooks at bookboon.com
3

Advanced Macroeconomics
© 2012 Sanjay Rode &
bookboon.com
ISBN 978-87-403-0278-3
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Advanced Macroeconomics
4
Contents
Contents
Preface 9
Acknowledgement 11
List of Figures 12
List of Tables 18
List of Graphs 19
1 Introduction to Macroeconomics 20
1.1 From a closed to an open economy 20
1.2 e IS-LM Framework 33
1.3 Aggregate demand and supply 43
2 e Consumption Function 52

2.1 Introduction 52
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Advanced Macroeconomics
5
Contents
2.2 e Ando-Modigliani Approach: e life cycle hypothesis 55
2.3 e Friedman approach: Permanent income 60
2.4 Friedman’s consumption function: Cyclical movement 64
2.5 e Duesenberry Approach: Relative income 65
2.6 Money: Denition and function 68
3 Aggregate supply, wages, prices and employment 83
3.1 e Philips Curve 83
3.2 e dynamic aggregate supply curve 87
3.3 e production function 87

3.4 e properties of the aggregate supply curve 91
3.5 Ination expectations and the aggregate supply curve 94
3.6 e aggregate supply curve (ASC) 96
3.7 e modied Philips Curve 99
3.8 e expected augmented Philips Curve 99
3.9 Criticism 101
4 e open economy: Macroeconomy 103
4.1 Introduction 103
4.2 e open economy and the goods market 105
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