User:Rf~enwikiversity/Macroeconomics 3 notes

Intro

 * GDP
 * Limitations
 * Expenditure approach. Components
 * Stylized facts about (Canadian) business fluctuations
 * Definitions of pro-cyclical, counter-cyclical and acyclical
 * Cyclical correlation, volatility, lead-lag of consumption, investment, government spending, prices

Microfoundations of macroeconomics

 * Foundations of household choice
 * Initial model assumptions (representative agent, no storage, no trade)
 * Production function - assumed properties (diminishing positive MPL), example
 * Consumer preference - leisure vs. consumption - assume: completeness, transitivity, non-satiation
 * Utility function, indifference curves and map
 * Maximizing utility with constraint of production
 * Exogenous shocks to the production function. Wealth and substitution effects


 * Intertemporal choice
 * Commodity market. Money stock. Assume: perfect competition, no inflation, constant money stock.
 * Credit market. Bonds with contant nominal interest rate
 * Household budget constraint (individual and aggregate) - 2-period model
 * Intertemporal wealth and substitution effects
 * Budget constraint for infinite horizon
 * Temporary vs. permanent shocks. Intratemproral vs. intertemporal substitution
 * Permanent income hypothesis (Friedman 1957)


 * Demand for money
 * Transactions demand, precautionary demand (liquidity), speculative demand
 * Baumol-Tobin model of transactions demand
 * Implications: Economies of scale in holding money. No money illusion.
 * Pigou effect (opposing: Fisher debt-deflation effect)


 * General equilibrium
 * Assumptions (perfect flexibility); Aggregate consistency conditions.
 * Walrasian auctioneer
 * Walras' law. Proof for model


 * Labour market

Money, inflation and interest rate

 * Inflation and interest rate
 * Neutrality of money
 * Dynamics of inflation

Government

 * Government consumption
 * Taxes and transfers
 * Public debt