Expectations, Employment and Prices

Contents......Page 12
PART I: The Theory of Unemployment......Page 18
1 What This Book Is About......Page 20
1.1 The Nature of the Enquiry......Page 22
1.2 The Theory Summarized......Page 24
1.3 The Theory of Aggregate Supply......Page 25
1.4 The Theory of Aggregate Demand......Page 27
1.5 A Road Map to the Book......Page 28
2 The Basic Model......Page 32
2.1 Components of the Theory......Page 33
2.2 Equilibrium and the Social Planner......Page 39
2.3 A Formal Definition of Equilibrium......Page 46
2.4 Concluding Comments......Page 47
3 An Extension to Multiple Goods......Page 50
3.1 The Structure of the Model......Page 51
3.2 Equilibrium and the Social Planner......Page 55
3.3 Equilibrium and the Planning Optimum Compared......Page 61
3.4 Concluding Comments......Page 64
4 A Model with Investment and Saving......Page 66
4.1 The Model Structure and the Planning Solution......Page 67
4.2 Investment and the Keynesian Equilibrium......Page 72
4.3 Analyzing Equilibria......Page 75
4.4 Concluding Comments......Page 79
4.5 Appendix......Page 80
PART II: Using the Theory to Understand Data......Page 84
5 A New Way to Understand Business Cycle Facts......Page 86
5.1 What’s Wrong with the HP Filter?......Page 87
5.2 Measuring Data in Wage Units......Page 90
5.3 Interpreting Wage Units......Page 92
5.4 The Components of GDP......Page 93
5.5 Concluding Comments......Page 97
6 The Great Depression: Telling the Keynesian Story in a New Way......Page 98
6.1 Developing the Model......Page 100
6.2 Aggregate Supply......Page 104
6.3 Equilibrium and the Planner’s Problem......Page 107
6.4 Using the Model to Understand Data......Page 112
6.5 The Recovery from the Depression......Page 115
6.6 Equilibrium with Government......Page 117
6.7 Concluding Comments......Page 122
6.8 Appendix......Page 123
7 The Wartime Recovery: A Dynamic Model Where Fiscal Policy Matters......Page 126
7.1 The Structure of the Model......Page 127
7.2 The Aggregate Economy......Page 131
7.3 Using the Model to Understand Data......Page 133
7.4 Concluding Comments......Page 139
7.5 Appendix......Page 140
8.1 Introduction......Page 144
8.2 The Impact of the Fed–Treasury Accord......Page 145
8.3 A Preview......Page 146
8.4 Unemployment and GDP......Page 149
8.5 Investment Is Not a Cause of Medium-Term Movements......Page 150
8.6 Other Possible Causes of Medium-Term Fluctuations......Page 152
8.7 Concluding Comments......Page 155
PART III: The Theory of Prices......Page 158
9.1 The Structure of the Model......Page 160
9.2 The Complete Model......Page 166
9.3 Concluding Comments......Page 167
10 Money and Inflation Since 1951......Page 168
10.1 A Complete Monetary Model......Page 169
10.2 Aggregate Supply and the Money Wage......Page 170
10.3 Theory and Data......Page 171
10.4 Modeling Monetary Policy......Page 176
10.5 How Beliefs Influence the Unemployment Rate......Page 178
10.6 Concluding Comments 164......Page 181
11 How to Fix the Economy......Page 184
11.1 Monetary Policy Cannot Hit Two Targets......Page 185
11.2 Fiscal Policy Is Not the Most Effective Solution......Page 186
11.3 What We Should Do Instead......Page 188
11.4 A New Role for the Fed......Page 189
11.5 Concluding Comments......Page 191
Notes......Page 194
Bibliography......Page 198
C......Page 202
H......Page 203
N......Page 204
S......Page 205
Y......Page 206