Advanced Principles of Economics

Econ 2: Spring 2014: UC Berkeley: Problem Set 4 Answers DRAFT

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Week 10: GDP and Its Fluctuations

Read Essentials, chapter 14 "Aggregate Demand and Aggregate Supply", 15 "Fiscal Policy"

M Mar 31: Aggregate Supply and Aggregate Demand

• Administrivia
• Summing-Up the Income-Expenditure Framework

W Apr 2: Getting to Where We Are:

• Administrivia
• Summing-Up the Income-Expenditure Framework II
• Origins of the Lesser Depression
• Problem Set 4 due: National Income Accounting and the Circular Flow
• Problem Set 5 out: Macroeconomics

Section 10:

• Problem Set 4 Answers
• Midterm and Answers

Further Reading:

• Alan Blinder, After the Music Stopped
• Paul Krugman (1998): Baby-Sitting the Economy
• Joan Sweeney and Richard James Sweeney (1977): Monetary Theory and the Great Capitol Hill Baby Sitting Co-op Crisis

Further Further Reading:

• DeLong, Summers, and Ball: Fiscal Policy and Full Employment http://delong.typepad.com/sdj/2014/04/brad-delong-larry-summers-and-laurence-ball-wednesday-focus-april-2-2014-over-at-cbpp-full-employment-project-and-the.html
• Janet Yellen: What the Federal Reserve Is Doing to Promote a Stronger Job Market http://www.federalreserve.gov/newsevents/speech/yellen20140331a.htm

Paper Assignment

Econ 2: Spring 2014: UC Berkeley: Paper Assignment/Administrivia

20140331 Econ 2Paper Assignment.ppt | 20140331 Econ 2 Paper Assignment.pdf | 20140331 Econ 2 Paper Assignment.key

Principles of Economics * Macroeconomics * Summing-Up the Income-Expenditure Framework

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Econ 2: Spring 2014: Problem Set 5

20140402 Econ 2 Problem Set 5.pdf

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A.Suppose that it is December 2020, current forecasts are for a year-2022 level of real GDP of $19.5 trillion without policy changes. Suppose further that you have just moved to Washington to work for the newly-chosen President-Elect as Special Assistant to the Chief Economist of the Office of Management and Budget. Suppose still further that the short-term safe interest rates the Federal Reserve controls are still very close to zero and that the Federal Reserve has promised to keep them very close to zero until at least 2023. Suppose still further that risk spreads on interest rates of different assets are at normal levels.

Monday March 17, 2014 Office Hours POSTPONED

• I will be entertaining the seminar speaker around lunchtime...

• So office hours on MONDAY March 17, 2014 are postponed to: 6 PM @ Yali's Cafe 1920 Oxford St., Berkeley

Principles of Economics * Macroeconomics * The Obama Stagnation in More Detail

Principles of Economics * Macroeconomics * The Income-Expenditure Framework: Examples

Principles of Economics * Macroeconomics * Money, Interest Rates, and Spending

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Econ 2: Spring 2014: Midterm Answers DRAFT