Advanced Macroeconomics (Minford).pdf

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+4<9;, lqghshqghqwo|= sulfh vhwwhuv zhuh dlplqj wr dgmxvw uhodwlyh sulfhv

htxdwlrqv duh gholehudwho| vlpsolhg wr wkh pd{lpxp  hvshfldoo|/ rxw0

Iljxuh 4144= Wkh h{shfwdwlrqv0dxjphqwhg Skloolsv fxuyh zlwk dgdswlyh h{shf0

Vrph qrwhv rq wkh htxloleulxp

Iljxuh 4145= Wkh dffhohudwlrqlvw sursrvlwlrq

|w @ g uw +LV, +d,

Iljxuh 4146= Lq dwlrq dqg lqwhuhvw udwh htxloleulxp

Uw @ uw . sbhw.4 uhdo lqwhuhvw udwh +UU, +h,

DH jlyhv 3 @ sbh @ +sb sbh , @, sb @ sbh

Ilqdoo| vroyh iru s iurp OP dv

Qrwhv rq wkh g|qdplf surshuwlhv

Wr xqghuvwdqg wkh qdwxuh ri wkh g|qdplf sdwk zh fdq frqgxfw d srolf|

Iljxuh 4147= Sulfh ryhuvkrrwlqj

fxuyh vkliwv xs zlwk kljkhu h{shfwhg lq dwlrq> e| qrz wkh OP fxuyh lv

Iljxuh 4148= Rqh0r ulvh lq p

wkh prgho*v chtxdwlrq ri prwlrq* ru cfkdudfwhulvwlf htxdwlrq*/ zh iroorz

Frpphqwv rq wkh prgho dqg lwv srolf| lpsolfdwlrqv

pxfk pruh frpsolfdwhg/ hvshfldoo| zlwk wkh lqwurgxfwlrq ri odjv lq wkh

G\QDPLF SURSHUWLHV RI WKH QHR0

51 Prgho lq ghyldwlrq irup ehfrphv +doo yduldeohv lq ghyldwlrqv

61 Ghulyh Djjuhjdwh Ghpdqg ixqfwlrq iurp +d,/ +e,/ +h,1 Iurp

41 Uxohv yhuvxv glvfuhwlrq lq prqhwdu| srolf|1

Prqhwdulvwv dujxhg wkdw wkh prqh| vxsso| vkrxog eh nhsw wr d vwhdg|

Udwlrqdo h{shfwdwlrqv= Lqwurgxfwru| Lghdv

H{shfwdwlrqv duh ixqgdphqwdo lq hfrqrplfv1 Hyhu| hfrqrplf ghflvlrq lv

hdfk lqglylgxdo frqvwuxfwv lq klv lpdjlqdwlrq glhuhqw vfhqdulrv ru srv0

qhr0Nh|qhvldq v|qwkhvlv, w|sh zhuh exlow lq juhdw surixvlrq lq wkh 4<93v

Zh kdyh dvvxphg xs wr qrz wkdw lqwhuhvw udwhv kdyh d qhjoljleoh hhfw

Wkh pxowlsolhu lv qrz 4@^4 e+4 ,`/ vpdoohu wkdq ehiruh1

ghwhuplqh rxwsxw +dovr dhfwhg e| lqwhuhvw udwhv wkurxjk wkhlu hhfw rq

exw kh dovr hpskdvlvhg wkh dowhuqdwlyhv wr kroglqj prqh| +ghqhg dv

Iljxuh 4143= Wkh u fxuyh

htxdwlrqv duh gholehudwho| vlpsolhg wr wkh pd{lpxp hvshfldoo|/ rxw0

|w @ g uw +LV, +d,

DH jlyhv 3 @ sbh @ +sb sbh , @, sb @ sbh

Ilqdoo| vroyh iru s iurp OP dv

Iljxuh 4148= Rqh0r ulvh lq p

wkh prghov chtxdwlrq ri prwlrq ru cfkdudfwhulvwlf htxdwlrq*/ zh iroorz

hdfk lqglylgxdo frqvwuxfwv lq klv lpdjlqdwlrq glhuhqw vfhqdulrv ru srv0

wr prgho wkh hhfw ri wkh fkdqjhv rq h{shfwdwlrqv dqg rq wkhlu lqwhudf0

Wkh hduo| lqwhoohfwxdo Klvwru| ri wkh K|srwkhvlv dq Ryhuylhz

irupdqfh, zrxog eh lqhhfwlyh lq wkhlu rxwsxw vwdelol}dwlrq remhfwlyh1

cxqsuhglfwdeoh*,1 Vxssrvh zh dgg dq| h{suhvvlrq zkdwvrhyhu/ vd| }w /

sw @ Hw4 sw . +|w | , +;,

Hw4 sw @ Hw4 sw . +Hw4 |w | , +;h ,

P − β>\ −\ @ S\

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sw @ Hw4 sw . +|w | , +;,

Wklv lv dfwxdoo| d glhuhqfh htxdwlrq lq d yduldeoh shw.4 / ghqhg wr eh

Pα>(WSW−(WSW@ (WSW(W\ W

' P (WSW (W\W

Iljxuh 516= Wkh vroxwlrq h{shfwhg dw | 3 ri d vlpsoh UHIY prgho/ looxvwudwhg

jurfhulhv> wkh| zrxog wkhuhiruh qg dq dowhuqdwlyh phdqv ri fduu|lqj

Lq idfw zh fdq vkrz wklv irupdoo| e| lpsrvlqj rq wkh glhuhqfh htxd0

+rq %wl > l A 4, +4 . , l . l.4 @ 3 +87,

+whupv lq sw4 , 3 @ 5 + 5 4,5 @ 5 +4 . , 5 +94,

+whupv lq |w4 , 3 @ 6 +5 4, 6 / lpso|lqj 6 @ 3 +86,

\ W λ>\ W \ @\

' P SW\ W

+p | ,+4 , . Hw4 %w %w4 @ Hw4 sw.4

+p | ,+4 , . Hw4 %w.l Hw4 %w.l4 @ Hw4 sw.l.4 .

Hw4 sw.4 @ Hw4 sw . +p | ,+4 , . 4@+4 . ,

Iljxuh 519= Wkh hhfw ri dq xqdqwlflsdwhg vkrfn

+%w4 ,= @ 5 . +4 . . ,4 + . ,3 +;:,

+%wl > l A 5,= 3 @ l.4 . +4 . . ,l + . , l4 +;;,

|w @ | . +sw Hw4 sw , . +|w4 | , +<7,

qrwh wkdw wkh h{shfwdwlrqv ri ixwxuh lqqrydwlrqv duh e| ghqlwlrq }hur1

Wkh urrwv duh wkhq 4 dqg 4.

E 4 . +4 . . , +4 . ,E @ n3 +4 n4 E 4 ,+4 n5 E, @