巴罗宏观经济学现代观点第16章课件

Money and Business Cycles II:Sticky Prices and Nominal Wage RatesC h a p t e r 1 61Macroeconomics Chapter 16 The New Keynesian Model2 Extensions:lImperfect competition:the typical producer actively sets its price.lSticky prices:nominal goods prices that do not react rapidly to changed circumstances.menu costJournal price2Macroeconomics Chapter 16 The New Keynesian ModelPrice Setting Under Imperfect CompetitionlLet P(j)be the price charged for a good by firm j.lthe quantity demanded of firm j s goods is q(j)3Macroeconomics Chapter 16 The New Keynesian ModelPrice Setting Under Imperfect CompetitionlTypically,q(j)depends on relative price P(j)/P andlthe income of consumers4Macroeconomics Chapter 16 Extra:Price Setting Under Imperfect CompetitionPure MonopolylA single seller,who chooses price and quantity to maximize profits.lEntry into the market is completely blocked by technological or legal barriers.lThe monopolists profit-maximization problem:5Macroeconomics Chapter 16 Extra:Price Setting Under Imperfect CompetitionFOC:l is the elasticity of market demand at output.6Macroeconomics Chapter 16 Extra:Price Setting Under Imperfect CompetitionCournot Oligopoly:The choice variable is the quantity.All firms choose simultaneously.J identical firms produce a homogeneous good.Their cost function is same:The inverse market demand is:7Macroeconomics Chapter 16 Extra:Price Setting Under Imperfect CompetitionThe profit function of firm j is:FOC:8Macroeconomics Chapter 16 Extra:Price Setting Under Imperfect Competition9Macroeconomics Chapter 16 Extra:Price Setting Under Imperfect CompetitionUnder imperfect competition,each firm can set P(j)above its nominal marginal cost.The ratio of P(j)to the nominal marginal cost is called the markup ratiofirm j s markup ratio =P(j)/MC(j)10Macroeconomics Chapter 16 Extra:Price Setting Under Imperfect CompetitionP(j)=(markup ratio)MC(j)The production function for firm j looks like the function we have used before:Y(j)=F(j)K(j),L(j)MPL(j)=Y(j)/L(j)11Macroeconomics Chapter 16 MC(j)=w/MPL(j)P(j)=(markup ratio)w/MPL(j)Extra:Price Setting Under Imperfect Competition12Macroeconomics Chapter 16 The New Keynesian ModelShort-Run Responses to a Monetary ShocklImagine M doubles.In this setting,each nominal price,P(j),doubles when M doubles.The average price,P,doublesThe economy-wide nominal wage rate,w,also doubles as before.These changes leave unchanged the real variables in the economy.The real variables now include not only the economy-wide real wage rate,w/P,but also the ratio of each firms price to the average price,P(j)/P.13Macroeconomics Chapter 16 The New Keynesian ModelShort-Run Responses to a Monetary Shock with Sticky PriceslThe average price,P,would then also be fixed.lIf P is constant and M doubles,each household would have twice as much real money,M/P,as before.lHowever,nothing has changed to motivate households to hold more money in real terms.Each household would therefore try to spend its excess money,partly by buying the goods produced by the various firms.lEach firm j would then experience an increase in the quantity demanded of its goods,Yd(j).14Macroeconomics Chapter 16 The New Keynesian ModellTo raise its production,Y(j),firm j has to increase its quantity of labor input,L(j).lTherefore,the quantity of labor demanded,Ld(j),rises by the amount:Ld(j)=Y(j)/MPL(j)lWith a fixed price P(j),an increase in the nominal quantity of money,M,leads to an expansion of labor demand by each firm j.15Macroeconomics Chapter 16 The New Keynesian Model16Macroeconomics Chapter 16 The New Keynesian ModellAn increase in the nominal quantity of money from M to M raises the market-clearing labor input from L to(L)on the horizontal axis.lWith the increase in labor input,each firm produces more goods.Thus,real GDP increases.lWe therefore have that a monetary expansion is non-neutral.An increase in the nominal quantity of money raises real GDP.Moreover,labor input,L,moves in a procyclical mannerit rises along with Y.17Macroeconomics Chapter 16 The New Keynesian ModelNew Keynesian PredictionslThe predictions from the new Keynesian model are similar to those from the price-misperceptions model.lThat model also gave the result that a monetary expansion raised real GDP,Y,and labor input,L.18Macroeconomics Chapter 16 The New Keynesian ModelDifference between the two models:w/Plthe price-misperceptions model,an expansion of L had to be accompanied by a fall in w/P in order to induce employers to use more labor input.that model predictedcounterfactuallythat w/P would be countercyclical.lthat a monetary expansion increases the market-clearing real wage rate from(w/P)to(w/P)on the vertical axis.Therefore,the model generates a procyclical pattern for w/P.19Macroeconomics Chapter 16 The New Keynesian ModelNew Keynesian PredictionslKeynesian model predicts,counterfactually,that Y/L would be countercyclical.lKeynesian economists have used the idea of labor hoarding to improve the models predictions about labor productivity.20Macroeconomics Chapter 16 The New Keynesian ModelPrice Adjustment in the Long RunlIn the long run,the prices adjust,and tend to undo the real effects from a change in M.lP(j)=(markup ratio)w/MPL(j)lThe real effect of a monetary shock in the new Keynesian model is a short-run result that applies only as long as prices fail to adjust to their equilibrium levels.21Macroeconomics Chapter 16 The New Keynesian ModellData do reveal stickiness of some prices.lHowever,a tentative conclusion from empirical research with these new data is that price stickiness is insufficient to explain a major part of economic fluctuations.22Macroeconomics Chapter 16 The New Keynesian ModelComparing Predictions for Economic FluctuationslThe new Keynesian model correctly predicts a procyclical pattern for the real wage rate,w/P,and a countercyclical pattern for the price level,P.lThe new Keynesian model errs by predicting a countercyclical pattern for Y/L,although the idea of labor hoarding might fix this problem.23Macroeconomics Chapter 16 The New Keynesian Model24Macroeconomics Chapter 16 The New Keynesian ModelShocks to Aggregate DemandlEach firm j experienced an increase in the demand for its goods,Yd(j),while its price,P(j),was held fixed.The same results apply if Yd(j)rises for each firm j for reasons having nothing to do with money.The essential ingredient is an increase in the aggregate demand for goods.25Macroeconomics Chapter 16 The New Keynesian ModelShocks to Aggregate DemandlOne way for aggregate demand to rise is for households to shift exogenously away from current saving and toward current consumption,C.lAnother possibility is that the government could boost the aggregate demand for goods by increasing its real purchases,G.26Macroeconomics Chapter 16 The New Keynesian ModelShocks to Aggregate DemandlAn increase in the aggregate demand for goods may end up increasing real GDP,Y,by even more than the initial expansion of demand.lThat is,there may be a multiplier in the modelthe rise in Y may be a multiple greater than one of the rise in demand.27Macroeconomics Chapter 16 Money and Nominal Interest RatesIn practice,central bankssuch as the Federal Reservetend to express monetary policy as targets for short-term nominal interest rates,rather than monetary aggregates.In the United States,especially since the early 1980s,the Fed focuses on the Federal Funds ratethe overnight nominal interest rate in the Federal Funds market,which comprises financial institutions,such as commercial banks.28Macroeconomics Chapter 16 Money and Nominal Interest RatesThe Federal Reserves Federal Open Market Committee(FOMC)meets eight or more times a year.At each meeting,the FOMC adopts a target for the Federal Funds rate.29Macroeconomics Chapter 16 Money and Nominal Interest RatesThe central idea is that,in the short run with sticky prices,open-market operations affect nominal interest ratesthe Federal Funds rate in the United States and the nominal interest rate,i,in our model.30Macroeconomics Chapter 16 Money and Nominal Interest RatesM=P L(Y,i)In the new Keynesian model,P is fixed in the short run.Thus,if M increases,equilibrium requires some combination of higher Y or lower i to raise the nominal quantity of money demanded by the same amount.For a given Y,a higher M has to match up with a lower i 31Macroeconomics Chapter 16 Money and Nominal Interest RatesIn our previous analysis,we thought of an expansionary monetary shock as an increase in the nominal quantity of money,M.Now we can think of an expansionary monetary action as a decrease in the nominal interest rate,i.32Macroeconomics Chapter 16 Money and Nominal Interest RatesIt nearly impossible for the Fed to designate in advance the precise time path for the monetary base or some other monetary aggregate needed to achieve a desired part for i.Central banks have rejected proposals,originally put forward by Milton Friedman,to have a constant-growth-rate rule for a designated monetary aggregate.33Macroeconomics Chapter 16 Money and Nominal Interest RatesBecause of the shortcomings in rules based on monetary aggregates,the Fed and other central banks tend to frame their policies in terms of targeted adjustments in nominal interest rates,iAn important point is that the Fed does not have to know the exact specification for L(Y,i).The Fed just keeps raising M until it sees the nominal interest rate that it wants.34Macroeconomics Chapter 16 Money and Nominal Interest Rates35Macroeconomics Chapter 16 The Keynesian ModelSticky Nominal Wage RatesSticky nominal wage rates that is,a failure of nominal wage rates to react rapidly to changed circumstances.Perfect competition.In this setting,the single nominal price,P,applies to all goods.36Macroeconomics Chapter 16 The Keynesian ModelSticky Nominal Wage RatesKeynes focused on a case in which w was higher than its market-clearing level.This assumption will imply that the real wage rate,w/P,will be above its market-clearing value.37Macroeconomics Chapter 16 The Keynesian ModelSticky Nominal Wage Rates38Macroeconomics Chapter 16 The Keynesian ModelSticky Nominal Wage RatesThe excess of the quantity of labor supplied(at the given real wage rate,w/P)over L is called involuntary unemployment.39Macroeconomics Chapter 16 The Keynesian ModelSticky Nominal Wage RatesSuppose,now,that a monetary expansion raises the price level,P.If the nominal wage rate,w,does not change,the rise in P lowers the real wage rate,w/P.This fall in w/P raises the quantity of labor demanded,Ld,and,thereby,increases labor input on the horizontal axis from L to L.40Macroeconomics Chapter 16 The Keynesian ModelSticky Nominal Wage Rates41Macroeconomics Chapter 16 The Keynesian ModelSticky Nominal Wage RatesWith sticky nominal wage rates,a monetary expansion raises labor input,L.The increase in L leads through the production function to an expansion of real GDP,Y.42Macroeconomics Chapter 16 The Keynesian ModelSticky Nominal Wage RatesThe Keynesian model is similar to the new Keynesian model in predicting that M and L would be procyclical.However,unlike the new Keynesian model,the Keynesian model predicts that w/P would be countercyclical.We have stressed that w/P typically moves in a procyclical manner.Therefore,the Keynesian model has difficulty explaining the observed cyclical behavior of w/P.43Macroeconomics Chapter 16 Long-Term Contracts and Sticky Nominal Wage RatesFor many workers,nominal wage rates are set for one or more years by the terms of agreements made with employers.These agreements are sometimes formal contracts between firms and labor unions.More commonly,firms and workers have implicit contracts that specify in advance the nominal wage rate over some period,often a fiscal or calendar year.44Macroeconomics Chapter 16 Long-Term Contracts and Sticky Nominal Wage RatesSuppose that an employer and employee agree on a fixed nominal wage rate,w,for the next year.A natural choice is to set w equal to the best estimate of the average market-clearing nominal wage rate,w,that will prevail over the year.Although the chosen w may be a rational expectation of w,unanticipated events lead to mistakes.45Macroeconomics Chapter 16 Long-Term Contracts and Sticky Nominal Wage RatesWhen the contract expires,the employer and employee agree on a new nominal wage rate,w,for the next year.This new w takes account of events during the current year,including the inflation rate,.Thus,if expectations are rational,mistakes in the setting of w for this yeardue perhaps to underestimation of inflationtend not to be repeated the next year.46Macroeconomics Chapter 16 Long-Term Contracts and Sticky Nominal Wage RatesAt any point in time,the economy has an array of existing labor contracts,each of which specifies a nominal wage rate,w,that likely deviates somewhat from the market clearing value,w.Some of these agreements have w greater than w,and others have w less than w.47Macroeconomics Chapter 16 Long-Term Contracts and Sticky Nominal Wage RatesImportant empirical works:lAhmed(1987):index contractslOlivei et al.(2007):shocks in different seasons have different effect.48Macroeconomics Chapter 16 Long-Term Contracts and Sticky Nominal Wage RatesAn important lesson from the contracting approach:lStickiness of the nominal wage rate,w,need not lead to the unemployment and underproduction that appears in the Keynesian model.49Macroeconomics Chapter 16 Extra:IS-LM modelrI,SS(y)I(r)50Macroeconomics Chapter 16 Extra:IS-LM modelrY51Macroeconomics Chapter 16 Extra:IS-LM modeli=rM/PAssume now that P is fixed52Macroeconomics Chapter 16 Extra:IS-LM modelrYMonetary policy:M increases53Macroeconomics Chapter 16 Extra:IS-LM modelrYEquilibrium:Monetary policy:M increases 54Macroeconomics Chapter 16 Extra:AD-AS modelrYAggregate Demand:M fixed and P decreases LM curve moves downR decreases andY increases55Macroeconomics Chapter 16 Extra:AD-AS modelPYAggregate Demand:P decreases andY increases56Macroeconomics Chapter 16 Extra:AD-AS modelPYAggregate Supply:Long run:Y is fixedShort run:P is fixed57Macroeconomics Chapter 16 Extra:AD-AS modelrYAggregate Supply:Long run:Y is fixedShort run:P is fixed58Macroeconomics Chapter 16 写在最后写在最后成功的基成功的基础在于好的学在于好的学习习惯The foundation of success lies in good habits59谢谢大家荣幸这一路，与你同行ItS An Honor To Walk With You All The Way讲师：XXXXXX XX年XX月XX日