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A short course of lectures
«Essentials of Macroeconomics»





Gross domestic productPrice indexAdjustments to the Keynesian models when wages are no longer constantThe Labor MarketCircular flow - circulation of goodsSAS, LAS, and ADCurrency inside banks is not moneySavingsThe goods market and aggregate demandThe supply of laborModeling expected depreciationMoney market diagramAggregate supplyCapital flowsThe Big Mac IndexThe various Phillips curvesThe AD curve over timeGrowth TheoriesThe LM curveDifferences in inflation under fixed exchange ratesDetermination of L in the cross modelAggregate demandThe IS curve with inflationCentral banks Labor marketThe AS-AD model and inflationThe IS-curve in the AS-AD modelAS-AD in the Keynesian and the classical modelMarket interest ratesThe Phillips curveThe Labor MarketPrices and price levelDefinitionNominal wagesInterest rate determinationThe IS-LM model with inflationCalculating interest rates on a yearly basisAggregate supply and the AS curveInterest rateDifferences in inflation under flexible exchange ratesThe marginal product of labor and capitalThe circular flow - a more detailed versionDemand for moneyAggregate supplySeparation of growth and fluctuationDetermination of other variablesThe complete Keynesian modelExchange rateDefinitionExpected depreciationNominal wage levelLabor MarketAggregate supplyDetermination of GDP in the cross model Overnight target rates and inflationFrom short to long runThe LM curve with inflationSay’s LawThe money market with inflationWhat is money and what is not moneyReal wageThe AS curveComponents of GDP in numbers 200xThe problem with the Keynesian modelModeling a firm and the concept value addedMoney, wealth and incomeEquilibrium in the labor marketThe market for overnight loansNominal and real interest ratesTrade and tourismThere is just one interest rateThe real interest ratePrice level and timeThe macroeconomic variablesInflation in SwedenTrade and exchange rateInflationThe classical model and the long-term Phillips curveHow not to justify Say’s LawInterest rates between currency areasThe consumption functionMundell-Fleming modelFour different measures of GDPDetermination of all the endogenous variables in the AS-AD modelWage inflationFactors affecting E*Household savingsThe Phillips curveProduction function and GrowthExchange rate determination and the Mundell-Fleming modelExchange rate systemsThe Government, Rest of the World and the financial marketsConsumer Price Index, CPIDevelopments around 1960Price InflationNominal wagesAggregate demand in the cross modelOvernight interest rates targets and money supplyThe circular flow - simple versionThe AS-AD model with inflationThe consumption functionResultsThe basic assumptionKeynesian cross modelPrices and inflationThe money marketThe neo-classical growth modelConsumptionThe aggregate production functionDetermination of all the variables in the classical modelPurchasing powerIS-curveThe central bank has complete control over money supplyMoneyRelation between nominal interest rate, real interest rate and inflationThe Labor MarketCentral bank and monetary policyInflation in GermanyThe rest of the world as one countryReal interest rates, nominal interest rate and expected inflationEffective exchange rateCommercial banksThe dynamics from the short to the long runDemand for money and the interest rateDefinitionThe government in the cross modelAggregate demand with inflationAggregate demandOther interest ratesThe AS-AD model with inflationConsumption and GDPThe yield curveThe AS-AD-modelRelationship between the interest rate and the bond priceAggregate demandThe IS-LM model with flexible exchange ratesThe classical growth theoryIS-LM-modelNAIRUProblems with CPIDemand for money and GDPThe price levelDetermination of other variablesCircular flow - circulation of moneyThe dynamics from the short to the long runEquilibrium in both the goods and in the money marketDemand for laborMacroeconomic modelsThe labor in the cross modelHow much money can banks create?InflationDetermination of P and YPPPEconomic functions of moneyMonetary policyOvernight rates and interest rates with longer maturityGDP is a flow!About the various modelsInterest rate, consumption and investmentPrice levelThe Labor MarketMonetary policy = change in money supplyGDP, and Say’s Law The LM-curve in the AS-AD modelThe Keynesian modelHow the AS-AD model solves the problemComponents of GDPThe quantity theory of moneyThe augmented Phillips curveThe neo-classical synthesisSimultaneous determination of Y and R in the IS-LM modelGrowthThe money marketThe AD curve is the aggregate demandSupply and demandThe classical model of exchange rate determinationInvestment demandHow commercial banks "create money"Unemployment and hours worked are directly relatedExpected inflationThe euro against the US dollarReversed Say’s LawExchange rate systemsSupply of moneyInvestmentThe problem with the IS-LM modelLabor supply and labor demand in the Keynesian modelThe components of GDPAggregate demand and Say’s LawFull employmentMonetary base and the supply of moneyThe goods and the money market in the AS-AD modelSupply and demand for the foreign currencyThe rest of the world in the cross modelThe exchange rateSAS-LAS-AD model of the neo-classical synthesisGrowth theoryMain resultDetermination of all endogenous variablesCommon assumptionsThe price level and the quantity theory of moneyCapital FlowsAggregate demandEquilibrium analysisThe AD curveInterest rate parityThe money market and price changesMoney, definitionTwo types of moneyThe law of one priceInterest rates and inflationMonetary baseThe IS-LM model under fixed exchange ratesWages and incomeReal GDPChanges in the exchange rateOvernight interest ratesGovernment revenue, government spending and net exportsThe assumptions of the AS-AD modelEquilibrium in the money marketEndogenous growth theoryIS-LM diagramThe long-run Phillips curveThe consumption function in the IS-LM modelMoney and banksThe multiplier effectExchange rateDefinitionPrivate sector in the circular flowCentral bank overnight interest rateThe equations of the AS-AD modelThe AD-curve at a given point in timeJustificationThe classical modelInterest rates within in the same currency areaThe investment function in the IS-LM modelExchange rate determinationFirms in the circular flowMoney illusionInvestment and the exchange rateCapitalUnemployment classificationWagesTotal savingsThe open economy
 
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