User:Nick Gardner /Sandbox: Difference between revisions

Revision as of 05:06, 21 November 2009

The Keynesian equation system

Let:-
    y = the thenational income
    N = numbers employed
    W = the money wage
    P = the price level
    M = the money supply
    l = the income elasticity of demand for money
    L = the interest elasticity of demand for money

then:-

The demand for money

M = lPy + L(r) ------------------------ (1)

The consumption function

s = s(y) -------------------------------- (2)

The production function

y = y(n) ------------------------------------ (3)

The labour market

dy/dn = W/P ------------------------------- (4)

Investment

i = i(r) --------------------------------------- (5)

Savings

s = i ------------------------------------------ (6)

Sticky wages

W =W_{o,_{--------------------------------------------------- (7)}}

@@ Line 8: / Line 8: @@
 &nbsp;&nbsp;&nbsp;&nbsp;P&nbsp;=&nbsp;the price level<br>
 &nbsp;&nbsp;&nbsp;&nbsp;M&nbsp;=&nbsp;the money supply<br>
-&nbsp;&nbsp;&nbsp;&nbsp;l&nbsp;=&nbsp;<br>
+&nbsp;&nbsp;&nbsp;&nbsp;l&nbsp;=&nbsp;the income elasticity of demand for money<br>
-&nbsp;&nbsp;&nbsp;&nbsp;L&nbsp;=&nbsp;<br>
+&nbsp;&nbsp;&nbsp;&nbsp;L&nbsp;=&nbsp;the interest elasticity of demand for money<br>
 then:-<br>
 The demand for money
-:::::: M&nbsp;=&nbsp;lPy&nbsp;+&nbsp;L(y)
+:::::: M&nbsp;=&nbsp;lPy&nbsp;+&nbsp;L(r) &nbsp;&nbsp;------------------------&nbsp;(1)
 The consumption function
-::::::  s&nbsp;=&nbsp;s(y)
+::::::  s&nbsp;=&nbsp;s(y)&nbsp;&nbsp;&nbsp;--------------------------------&nbsp;(2)
 The production function
-::::::y&nbsp;=&nbsp;y(n)
+::::::y&nbsp;=&nbsp;y(n)&nbsp;&nbsp;------------------------------------&nbsp;(3)
 The labour market
-::::::dy/dn&nbsp;=&nbsp;W/P
+::::::dy/dn&nbsp;=&nbsp;W/P&nbsp;&nbsp;-------------------------------&nbsp;(4)
 Investment
-::::::i&nbsp;=&nbsp;i(r)
+::::::i&nbsp;=&nbsp;i(r)&nbsp;&nbsp;---------------------------------------&nbsp;(5)
 Savings
-::::::s&nbsp;=&nbsp;i
+::::::s&nbsp;=&nbsp;i&nbsp;&nbsp;------------------------------------------&nbsp;(6)
 Sticky wages
-::::::W&nbsp;=W<sub>o,<sub>
+::::::W&nbsp;=W<sub>o,<sub>&nbsp;&nbsp;---------------------------------------------------&nbsp;(7)

User:Nick Gardner /Sandbox: Difference between revisions

Revision as of 05:06, 21 November 2009

The Keynesian equation system

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