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A short course of lectures
«Essentials of Macroeconomics»





Money market diagramTrade and tourismGrowth theoryInflation in GermanyMonetary policy = change in money supplyEndogenous growth theoryPrice InflationThe money marketThe goods market and aggregate demandHow the AS-AD model solves the problemReal interest rates, nominal interest rate and expected inflationMoneyThe complete Keynesian modelPrice levelReversed Say’s LawThe Keynesian modelLabor marketThe law of one priceWagesThe problem with the IS-LM modelWage inflationThe AS curveGrowth TheoriesThe euro against the US dollarThe circular flow - simple versionThe multiplier effectThe circular flow - a more detailed versionThe yield curveMoney, wealth and incomeExchange rateThe equations of the AS-AD modelPurchasing powerDetermination of all the variables in the classical modelThe real interest rateCentral bank overnight interest rateUnemployment and hours worked are directly relatedThe quantity theory of moneyThe aggregate production functionComponents of GDPThe IS-LM model with inflationThe long-run Phillips curveDemand for money and GDPNominal wage levelDemand for moneyDemand for money and the interest rateSeparation of growth and fluctuationThere is just one interest rateThe AS-AD-modelThe goods and the money market in the AS-AD modelConsumption and GDPCurrency inside banks is not moneyMain resultMonetary base and the supply of moneyAbout the various modelsUnemployment classificationMarket interest ratesThe dynamics from the short to the long runExpected depreciationThe rest of the world in the cross modelPrices and price levelGrowthAggregate demandDifferences in inflation under flexible exchange ratesThe government in the cross modelDetermination of all endogenous variablesSAS-LAS-AD model of the neo-classical synthesisLabor supply and labor demand in the Keynesian modelSupply of moneyInterest rates between currency areasThe classical model and the long-term Phillips curveThe assumptions of the AS-AD modelKeynesian cross modelSupply and demand for the foreign currencyAggregate demandDetermination of P and YExchange rate systemsThe Phillips curveThe Labor MarketCommercial banksTrade and exchange rateThe consumption functionMoney illusionEquilibrium analysisRelation between nominal interest rate, real interest rate and inflationThe money market and price changesExchange rateThe IS-LM model with flexible exchange ratesThe LM curveThe classical modelTwo types of moneyThe LM curve with inflationConsumer Price Index, CPIIS-LM diagramSavingsFour different measures of GDPRelationship between the interest rate and the bond priceThe labor in the cross modelSay’s LawNominal wagesExpected inflationGDP is a flow!Interest rates within in the same currency areaThe marginal product of labor and capitalInvestment demandAggregate supply and the AS curveHousehold savingsCentral banks Real GDPDifferences in inflation under fixed exchange ratesPPPJustificationThe basic assumptionMoney, definitionDefinitionMundell-Fleming modelComponents of GDP in numbers 200xThe supply of laborExchange rate determination and the Mundell-Fleming modelThe various Phillips curvesThe rest of the world as one countryThe central bank has complete control over money supplyThe money market with inflationCapital FlowsModeling a firm and the concept value addedThe problem with the Keynesian modelDemand for laborIS-LM-modelThe open economyThe Big Mac IndexGross domestic productNominal wagesAdjustments to the Keynesian models when wages are no longer constantWages and incomeCapital flowsThe market for overnight loansAggregate supplyAggregate demandReal wageAggregate demand with inflationAS-AD in the Keynesian and the classical modelGDP, and Say’s Law Interest rates and inflationThe investment function in the IS-LM modelEffective exchange rateFirms in the circular flowChanges in the exchange rateInterest rate parityLabor MarketCentral bank and monetary policyThe AS-AD model with inflationOvernight target rates and inflationOvernight rates and interest rates with longer maturityDefinitionDetermination of other variablesEquilibrium in the money marketInterest rate, consumption and investmentMacroeconomic modelsSimultaneous determination of Y and R in the IS-LM modelMonetary policyThe AD-curve at a given point in timeExchange rate determinationPrice indexNAIRUAggregate supplyInterest rate determinationThe AD curveCapitalThe Labor MarketThe neo-classical growth modelInflationPrivate sector in the circular flowResultsInterest rateCircular flow - circulation of goodsDetermination of other variablesSupply and demandThe price levelThe consumption function in the IS-LM modelInvestmentDetermination of all the endogenous variables in the AS-AD modelInflationThe classical model of exchange rate determinationThe macroeconomic variablesThe Labor MarketOvernight interest rates targets and money supplyThe IS-curve in the AS-AD modelHow commercial banks "create money"Common assumptionsWhat is money and what is not moneyNominal and real interest ratesOvernight interest ratesMonetary baseHow much money can banks create?The neo-classical synthesisOther interest ratesDefinitionGovernment revenue, government spending and net exportsThe Government, Rest of the World and the financial marketsThe classical growth theoryThe IS curve with inflationAggregate supplyPrice level and timeIS-curveThe LM-curve in the AS-AD modelThe price level and the quantity theory of moneyFactors affecting E*The IS-LM model under fixed exchange ratesDetermination of GDP in the cross model Prices and inflationInvestment and the exchange rateHow not to justify Say’s LawThe Phillips curveMoney and banksTotal savingsConsumptionThe augmented Phillips curveDetermination of L in the cross modelThe AD curve over timeDefinitionSAS, LAS, and ADThe components of GDPEquilibrium in both the goods and in the money marketDevelopments around 1960Economic functions of moneyThe dynamics from the short to the long runFull employmentAggregate demand in the cross modelThe money marketEquilibrium in the labor marketAggregate demand and Say’s LawThe Labor MarketThe AS-AD model with inflationAggregate demandThe AD curve is the aggregate demandThe consumption functionFrom short to long runProblems with CPIThe AS-AD model and inflationCircular flow - circulation of moneyInflation in SwedenModeling expected depreciationThe exchange rateProduction function and GrowthCalculating interest rates on a yearly basisExchange rate systems
 
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