Explain the difference between Gali(1999) and new classical monetary economics in explaining relationship between labor productivity and employmen
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Explain the difference between Gali(1999) and new classical monetary economics in explaining relationship between labor productivity and employment
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- Monetary policy as one of the macroeconomic policies is generally implemented in line with the cycle of economic activity (business cycle). Based on this, answer the following questions: a) Explain what monetary policy is appropriate to apply when there is a decline in GDP, economic growth slows and there is a decline in the prices of goods? b) Explain what monetary policy is appropriate to apply when there is an increase in the amount of real output or economic growth and an increase in the price of goods? Explain!Discuss the unintended consequences of the various monetary interventions implemented.Which of the following individuals is NOT associated with the school of Modern Monetary Theory? Group of answer choices Bernie Sanders, U.S. Senator from Vermont, Presidential Candidate Bill Mitchell, Australian professor of economics and theorist Randall Wray. The Levy Institute at Bard College Lawrence Summers, former Treasury Secretary and President of Harvard US Representative Alexandria Ocasio-Cortez
- discuss the scope of monetary economics and its importance to the feild of economicsdiscuss the scope and importance of monetary economics to the feild of economicsThe use of monetary policy is highly debated among classical and Keynesian economists. Where do they agree and where do they disagree with respect to monetary policy?
- Why is it important to be aware of the different monetary theories?In the model SIM of chapter 3 of the book of Godley, Wynne, and Marc Lavoie. 2012. Monetary Economics: An Integrated Approach to Credit, Money, Income, Production and Wealth. 2nd ed. 2012 edition., starting from a stationary state simulate the effect of an increase in government expenditure under four variations of the model: the simple deterministic model of the book. Discuss the trajectory of output from the original stationary state to the new one.What role, if any, does monetary policy play in the Real Business Cycle Model?
- On what basis would you reach the conclusion that classical economics is fundamentally incompatible with Keynesian economics regarding the impact of aggregate demand policies on employment, output and interest rate? Explain with the aid of appropriate diagrams.Use the Keynesian transmission mechanism to explain fully each of the steps whereby an Easy money policy is used to reduce cyclical unemployment.Using the book of Godley, Wynne, and Marc Lavoie. 2012. Monetary Economics: An Integrated Approach to Credit, Money, Income, Production and Wealth. 2nd ed. 2012 edition., Simulate a scenario of the deterministic version of the model where the interest rate increases by one percentage point. What is the effect of the increase in the interest rate? Discuss using the below plots.
