Show or hide comments about the document.
Search over the document's text.
Share the document through social networks or e-mail.
After selecting an area on the page.
...you can:
copy the text
share the segment
comment
cite the document

Winter 2016

ISSN 0890-913X

Volume 31, Number 4

A Dynamic AD-AS Analysis of the UK Economy, 2002-2010

Anthony J. Evans, ESCP Europe Business School

Download

e-mail

<< Back to editing
Previous version by
<< Older
Newer >>
Revert to this one

Edit
Cancel
Fullscreen

Show comments
Zoom:
Page: / 9

Line spacing:
Word spacing:

Search:FindClose

search results

TheJournalofPrivateEnterprise31(4),2016,97–105ADynamicAD–ASAnalysisoftheUKEconomy,2002–2010AnthonyJ.Evans*ESCPEuropeBusinessSchool__________________________________________________________AbstractThiseducationalnotehelpsinstructorstoutilizetheCowen/TabarrokdynamicAD–ASmodel.IuseittointerpretsomemajorshocksandpolicyresponsesthathittheUKeconomyfrom2002through2010andIdescribehowtoincorporatethemodelintoaclassroomsetting.__________________________________________________________JELCodes:A22,B53,E52,E62,E32Keywords:AD–ASmodel,macroeconomics,monetarypolicy,undergraduateteachingIntroductionIntheirModernPrinciplesofMacroeconomicstextbook,TylerCowenandAlexTabarrokintroduceadynamicversionoftheaggregatedemand–aggregatesupply(AD–AS)model.1Itisasimpleframeworktomakesenseofeconomicshocksandpolicyresponses.ItsmaindifferencefromthetraditionalAD–ASmodelisthatinsteadofshowingthepricelevelandrealGDPonthetwoaxes,thedynamicversionshowsinflation(ontheYaxis)andrealGDPgrowth(ontheXaxis),makingtheanalysismuchmoreaccessibletostudentsfortworeasons.First,inaworldofsustainedinflation,itcanbeconfusingtomodeldeclinesinaggregatedemandasleadingtoafallinthepricelevel.Second,inflationandgrowtharethemaineconomicindicatorsdiscussedinthenews—afterall,inflationtargetstendtobe2percent,andrecessionsaredefinedastwoquartersofnegativeGDPgrowth.Therefore,thedynamicmodelallowsstudentstoinstantlydrawupontheirexistingknowledgeofthemain*IappreciatehelpfulcommentsfromEliDouradoandananonymousrefereeonpreviousversionsofthispaper.Theusualdisclaimerapplies.1ReaderswhoareunfamiliarwiththedynamicAD–ASmodelshouldstartwiththethoroughexpositionprovidedinCowenandTabarrok(2009).ThereisalsoanunaffiliatedvideointroductiononYouTubetitled“AnIntroductiontotheDynamicAD–ASModel.”

GLIFOS-digital_archive

Metadata [hide]

Title	A Dynamic AD-AS Analysis of the UK Economy, 2002-2010
Authors/Creators:	Anthony J. Evans, ESCP Europe Business School
Year:	2016
Volume:	31
Number:	4
Pages:	97 - 105
Publisher:	The Association of Private Enterprise Education
ISSN:	0890-913X
Document Type:	Articles
Keywords:	AD-AS model, macroeconomics, monetary policy, undergraduate teaching

Citation:
Evans, Anthony J. / 2016. "A Dynamic AD-AS Analysis of the UK Economy, 2002-2010." The Journal of Private Enterprise, 31(4): 97-105.