The Experts below are selected from a list of 285 Experts worldwide ranked by ideXlab platform
Malcolm Sawyer - One of the best experts on this subject based on the ideXlab platform.
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Aggregate Demand, conflict and capacity in the inflationary process
Cambridge Journal of Economics, 2005Co-Authors: Philip Arestis, Malcolm SawyerAbstract:This paper focuses on an alternative perspective on inflation to that of the non-accelerating inflation rate of unemployment (NAIRU). It indicates that there are no automatic forces leading to a level of Aggregate Demand consistent with constant inflation. Inflationary pressures arise from conflict over income shares, and from cost elements, with the price of raw materials, especially oil, being the most important. There are supply-side factors impinging on the inflationary process, which arise from the level of productive capacity (relative to Aggregate Demand). The supply-side constraints are viewed as arising from capacity constraints, rather than from the operation of the labour market. Copyright 2005, Oxford University Press.
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The NAIRU, Aggregate Demand and Investment
Metroeconomica, 2002Co-Authors: Malcolm SawyerAbstract:The nature of the non-accelerating inflation rate of unemployment (NAIRU) is analysed. The focus of our analysis is the role of Aggregate Demand and capacity in the context of the NAIRU. Two aspects of the relationship between the level of Aggregate Demand and the NAIRU are of particular significance. First, it is argued that the real wage–employment relationship based on enterprise decisions cannot be fully articulated without reference to the level of Aggregate Demand. Second, a model which allows for variable returns to labour and the notion of full capacity is used to explore the effects of shifts in the capital stock on the real wage–employment relationship. The model is specifically used to explore whether a sufficiently expansionary environment can generate sufficient investment to shift that relationship until the NAIRU is compatible with full employment. A number of limitations on the conclusions reached are considered, and the policy implications are briefly considered.
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Aggregate Demand, Investment and the NAIRU
Social Science Research Network, 1997Co-Authors: Malcolm SawyerAbstract:The NAIRU (non accelerating inflation rate of unemployment) is generally viewed as a supply-side determined short run equilibrium rate of unemployment. Aggregate Demand plays no essential part in the determination of the equilibrium rate of unemployment. In those models from which a NAIRU is derived where Aggregate Demand makes an appearance, the nature of the model is such that the level of Demand adjusts to the level of employment set by the supply-side factors, and those supply-side factors are invariant to the level of Demand. The adjustment of Aggregate Demand can take place through a variety of routes, such as the real balance effect and fiscal stance used to avoid accelerating inflation, but the precise mechanism is not of central significance here (for further discussion see Sawyer, 1997). The focus of this paper is on the role of Aggregate Demand on the determination of the level of employment within the general context of some of NAIRU (by which we mean an equilibrium level of unemployment consistent where the forces determining that equilibrium arise from price and wage determination). Two aspects of the relationship between the level of Aggregate Demand and the NAIRU are particular significance. First, it is argued that the real wage - employment relationship based on enterprise decisions (which many mistakenly refer to as the Demand for labor schedule) cannot be fully articulated without reference to the level of Aggregate Demand. Second, and more significantly for this paper, a model is derived in which investment through additions to the capital stock shifts that real wage - employment relationship, and with a sufficiently expansionary environment investment can shift that relationship until the NAIRU is compatible with full employment. A number of limitations on this conclusion are discussed.
Yi Wen - One of the best experts on this subject based on the ideXlab platform.
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sentiments and Aggregate Demand fluctuations
Econometrica, 2015Co-Authors: Jess Benhabib, Pengfei Wang, Yi WenAbstract:We formalize the Keynesian insight that Aggregate Demand driven by sentiments can generate output fluctuations under rational expectations. When production decisions must be made under imperfect information about Demand, optimal decisions based on sentiments can generate stochastic self-fulfilling rational expectations equilibria in standard economies without persistent informational frictions, externalities, nonconvexities, or strategic complementarities in production. The models we consider are deliberately simple, but could serve as benchmarks for more complicated equilibrium models with additional features.
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Sentiments and Aggregate Demand fluctuations
Research Papers in Economics, 2012Co-Authors: Jess Benhabib, Pengfei Wang, Yi WenAbstract:We formalize the Keynesian insight that Aggregate Demand driven by sentiments can generate output fluctuations under rational expectations. When production decisions must be made un- der imperfect information about Aggregate Demand, optimal decisions based on sentiments can generate stochastic self-fulfilling rational expectations equilibria in standard economies without Aggregate shocks, externalities, persistent informational frictions, or even any strategic comple- mentarity. Our general equilibrium model is deliberately simple, but could serve as a benchmark for more complicated equilibrium models with additional features.
Maria Shaikh - One of the best experts on this subject based on the ideXlab platform.
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Econometric Analysis Aggregate Demand and Supply Shocks on Output in Pakistan
Social Science Research Network, 2017Co-Authors: Aisha Bashir Shah, Maria Shaikh, Gulzar Khoso, Faiza Shaikh, Qurban SharAbstract:The current research investigates the Econometric Analysis Aggregate Demand and Supply Shocks on Output in Pakistan. Data were collected from various secondary sources. It was revealed that The supply shocks and inflation response is in the right direction. The Demand shocks appear to have a permanent negative effect on the output level, with positive Aggregate Demand shock should increase the Aggregate output but here the reverse situation occurs in case of Pakistan. With positive Aggregate Demand shocks output decrease. The possible explanation for this opposite to conventional wisdom result may be the phenomenon of “Expansionary Fiscal Contraction”. The response of output to the Aggregate Demand shocks might be due to the continuous fiscal deficit. In Pakistan it shows that government investment decisions rather that the government consumption decisions are more critical for the growth of economy. The situation shows the behavior in the long run existence of the fiscal deficit reduces the national savings, which affects significantly on the economic growth and economic performance.
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Effect of Aggregate Demand and Supply Shocks on Output and Inflation Rate in Pakistan
Social Science Research Network, 2017Co-Authors: Maria Shaikh, Aisha Bashir Shah, Faiz Muhammad ShaikhAbstract:This study investigates the Effect of Aggregate Demand and Supply Shocks on Output and Inflation Rate in Pakistan. Data were collected from various secondary sources, i.e. Annual reports, magazines and newspapers. Quah approach The place aggravator interest also aggravator supply shocks would not associated. Those impacts of identified shocks is then estimated on GDP and inflation rate. Data of GDP and general price level for Pakistan economy over the period 1974 to 2012 have been used for the purpose. Results show that positive supply shock has positive effect on GDP while negative on prices. On the other hand Aggregate Demand shocks positively affect prices but the effect on Aggregate Demand is negative. The negative response of economic activity to Aggregate Demand shock may be due to the “Expansionary Fiscal Contraction”.
Aisha Bashir Shah - One of the best experts on this subject based on the ideXlab platform.
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Econometric Analysis Aggregate Demand and Supply Shocks on Output in Pakistan
Social Science Research Network, 2017Co-Authors: Aisha Bashir Shah, Maria Shaikh, Gulzar Khoso, Faiza Shaikh, Qurban SharAbstract:The current research investigates the Econometric Analysis Aggregate Demand and Supply Shocks on Output in Pakistan. Data were collected from various secondary sources. It was revealed that The supply shocks and inflation response is in the right direction. The Demand shocks appear to have a permanent negative effect on the output level, with positive Aggregate Demand shock should increase the Aggregate output but here the reverse situation occurs in case of Pakistan. With positive Aggregate Demand shocks output decrease. The possible explanation for this opposite to conventional wisdom result may be the phenomenon of “Expansionary Fiscal Contraction”. The response of output to the Aggregate Demand shocks might be due to the continuous fiscal deficit. In Pakistan it shows that government investment decisions rather that the government consumption decisions are more critical for the growth of economy. The situation shows the behavior in the long run existence of the fiscal deficit reduces the national savings, which affects significantly on the economic growth and economic performance.
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Effect of Aggregate Demand and Supply Shocks on Output and Inflation Rate in Pakistan
Social Science Research Network, 2017Co-Authors: Maria Shaikh, Aisha Bashir Shah, Faiz Muhammad ShaikhAbstract:This study investigates the Effect of Aggregate Demand and Supply Shocks on Output and Inflation Rate in Pakistan. Data were collected from various secondary sources, i.e. Annual reports, magazines and newspapers. Quah approach The place aggravator interest also aggravator supply shocks would not associated. Those impacts of identified shocks is then estimated on GDP and inflation rate. Data of GDP and general price level for Pakistan economy over the period 1974 to 2012 have been used for the purpose. Results show that positive supply shock has positive effect on GDP while negative on prices. On the other hand Aggregate Demand shocks positively affect prices but the effect on Aggregate Demand is negative. The negative response of economic activity to Aggregate Demand shock may be due to the “Expansionary Fiscal Contraction”.
Edward Greenberg - One of the best experts on this subject based on the ideXlab platform.
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Aggregate Demand, Harrod's Instability and Fluctuations
Computational Economics, 2011Co-Authors: Piero Ferri, Steven M. Fazzari, Edward Greenberg, Anna Maria Grazia VariatoAbstract:Long-run analyses usually stress the leading role of Aggregate supply. As a result, Aggregate Demand is supposed to adjust in order to accommodate supply changes. In a medium-run perspective, however, both Aggregate Demand and supply forces must be taken into account. In this case, the stability of the model cannot be taken for granted. The objective of the present paper is to study the dynamics generated by both forces within a Harrodian framework. Two main results are obtained. On one hand, the instability property of the model is illustrated. On the other, the introduction of some nonlinearities can constrain instability. The role of the rate of interest and the nature of the expectations in obtaining these results is stressed.
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Aggregate Demand and Firm Behavior: A New Perspective on Keynesian Microfoundations
Journal of Post Keynesian Economics, 1998Co-Authors: Steven M. Fazzari, Piero Ferri, Edward GreenbergAbstract:(1998). Aggregate Demand and Firm Behavior: A New Perspective on Keynesian Microfoundations. Journal of Post Keynesian Economics: Vol. 20, No. 4, pp. 527-558.
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Aggregate Demand and Micro Behavior: A New Perspective on Keynesian Macroeconomics
SSRN Electronic Journal, 1998Co-Authors: Steven M. Fazzari, Piero Ferri, Edward GreenbergAbstract:We analyze the microfoundations for Keynesian Aggregate Demand effects by considering the link between Aggregate Demand and firm production decisions under monopolistic competition. Macroeconomic equilibrium is characterized in a simple graphical framework that facilitates comparison of several major approaches to modeling Keynesian microfoundations, including equilibrium theories, "new Keynesian" sticky price models, and more traditional sticky wage approaches. We use this framework to develop an original perspective on Aggregate Demand effects according to which Aggregate Demand shocks directly affect the Demand conditions and production choices of individual firms. The results require neither nominal rigidity nor expectation errors. Nominal disinflation is ineffective in offsetting the real effects of Demand shocks if Aggregate Demand is insensitive to nominal prices.
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Aggregate Demand and Micro Behavior: Perspective on Keynesian Macroeconomics
Research Papers in Economics, 1995Co-Authors: Steven M. Fazzari, Piero Ferri, Edward GreenbergAbstract:We analyze the microfoundations for Keynesian Aggregate Demand effects by considering the link between Aggregate Demand and firm production decisions under monopolistic competition. Macroeconomic equilibrium is characterized in a simple graphical framework that facilitates comparison of several major approaches to modeling Keynesian microfoundations, including equilibrium theories, "new Keynesian" sticky price models, and more traditional sticky wage approaches. We use this framework to develop an original perspective on Aggregate Demand effects according to which Aggregate Demand shocks directly affect the Demand conditions and production choices of individual firms. The results require neither nominal rigidity nor expectation errors. Nominal disinflation is ineffective in offsetting the real effects of Demand shocks if Aggregate Demand is insensitive to nominal prices.