Notes On Keynes' Aggregate Supply Curve
In: Journal of post-Keynesian economics, Band 15, Heft 2, S. 255-260
ISSN: 1557-7821
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In: Journal of post-Keynesian economics, Band 15, Heft 2, S. 255-260
ISSN: 1557-7821
In: The American economist: journal of the International Honor Society in Economics, Omicron Delta Epsilon, Band 31, Heft 2, S. 76-77
ISSN: 2328-1235
In: Oxford Agrarian Studies, Band 1, Heft 2, S. 97-107
In: Optimum: economic studies, Heft 3(113), S. 81-97
Purpose – The article reviews the literature on the interactions between aggregate demand and aggregate supply. It discusses the relevance of the presented mechanisms for the current economic situation, especially due to the ongoing monetary tightening in major economies. Research method – The article is based on a review of the literature on the linkages between aggregate demand and aggregate supply shocks. Results – According to the presented models, heightened corporate debt makes firms more vulnerable to financial shocks, including an unexpected increase in interest rates. As a result, tight credit conditions (due to monetary tightening) may reduce aggregate demand and aggregate supply, with ambiguous effects on general price level and inflation rate. Originality /value /implications /recommendations – The review summarises the broad but overlooked literature on the links between aggregate demand disturbances and shocks to aggregate supply. The paper's originality lies in its attempt to present the literature in relation to ongoing increases in the policy of interest rates around the world.
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In: The American economist: journal of the International Honor Society in Economics, Omicron Delta Epsilon, Band 45, Heft 1, S. 71-79
ISSN: 2328-1235
A presumed "long run" aggregate supply curve has become an accepted and widely incorporated construct in contemporary macroeconomics. Unfortunately, that theoretical model, with its vertical supply curve, has been subjected to hardly any empirical testing. The major thrust of the present analysis is to determine whether such testing will show if continued use of the concept is warranted as a virtual representation of the actual economy. The critique herein stresses the necessity for a clock-time format to examine the empirical adequacy of the LRAS construct. Using an arbitrarily chosen four year, minimal, "long run" model period, divided into two appropriate biennia of stipulated change, the analysis finds the LRAS curve empirically unsupported over the crucial second biennia.
In: Scottish journal of political economy: the journal of the Scottish Economic Society, Band 45, Heft 3, S. 273-293
ISSN: 1467-9485
Using annual and quarterly data for the OECD countries this paper tests four theories of aggregate supply, namely the sticky wage, the sticky price, the worker misperception and the producer misinformation models. The empirical estimates suggest that the short run aggregate supply curve is positively sloped as a result of price and wage stickiness. Furthermore, the slope of the aggregate supply curve is found to be a positive function of the rate of inflation which is consistent with the sticky price model.
In: Hong Kong Institute for Monetary and Financial Research (HKIMR) Research Paper WP No. 14/2004
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In: CEPR Discussion Paper No. DP14209
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In: Essential Economics, S. 154-164
In: Zeitschrift für Nationalökonomie
In: Journal of Economics Zeitschrift für Nationalökonomie Supplementum
In: Zeitschrift für Nationalökonomie: Journal of economics, Band 3, Heft 1, S. 23-46
ISSN: 2304-8360
In: American economic review, Band 112, Heft 12, S. 3941-3969
ISSN: 1944-7981
We provide evidence that industries' supply curves are convex. To guide our empirical analysis, we develop a model in which capacity constraints at the firm level generate supply curves that are convex in logs at the industry level. The industry's capacity utilization rate is a sufficient statistic for the supply elasticity. Using data on capacity utilization and three different instruments, we estimate the supply curve and find robust evidence for an economically sizable degree of convexity. The nonlinearity we identify has several macroeconomic implications, including that responses to shocks are state dependent and that the Phillips curve is convex. (JEL D21, E22, E23, E32, E62, L60)