3 pages essay
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BusinessCycleEconomicsKNOOP.pptxBusiness Cycle Economics
Todd A. Knoop
Chapter 1: Why Study Business Cycles
Introduction
Recessions and depressions best way to understand how the economy works and how markets and macroeconomics works
The best learning opportunity the GD of 1929 turned the whole discipline of economics on its ear helped develop “macroeconomics” as a separate field and Keynesian economics changed the way economists think about the world since 1779 Smith and The Wealth of Nations
The problem: after 200 years of debate no general agreement @ what causes recessions and depressions
Continue to be competing models of business cycles disconnect between the models used by:
Academics
Private sectors economists
There is no single answer business cycles are complex enough
This book present all competing theories and factors in the debate to help us understand the full context in which these debates take place
Chapter 2: Describing the Business Cycle
How to define a recession and depression
Presents 7 basic facts about the business cycles
The behavior of components of the GDP: Labor Market, Capacity and Productivity, and Expectations
Difference between the cyclical component and the TREND
Chapter 3: Early Business Cycle Theories
Before the Great Depression number of theories existed to explain economic fluctuations
1. Early Agricultural Theories
2. Under consumption and Marxists theories
3. Classical Model
The assumptions of the classical model
Output determination and the labor market
What about Aggregate demand in the classical model (pag 43, 2nd paragraph)
Business cycles DO NOT EXIST in the classical model WHY? Pag 44
