In our last class, I asked the class to try and find the Gambia Government Multiplier using data from the statistical appendix. For those who could not find the Appendix, the link to two appendices covering the years 1990 to 2004 have been posted below. Instead of finding the government multiplier only, I'd like you to also calculate the tax rate multiplier and MPC multiplier. As I mentioned in class, estimate the models that make up the macro model (Output, Consumption, Investment and Money demand), then fit the parameters into the relevant multiplier equation to be able to get the actual figure. If you run into any problems, raise them in class.
http://www.mediafire.com/file/s9744xuecbs8a4h/gmb%20macro%20indicators%2090-97.pdf
http://www.mediafire.com/file/s8cccelncvhc4op/gmb%20macro%20indicators%2098-04.pdf
Given that we have now covered the basics of the IS-LM model and Aggregate Demand, I thought that you might find this piece interesting. There are some policy effects that Economics students have no trouble understanding. The problem for most students is the transmission mechanism. This piece gives an explanation of the transmission mechanism of how printing more money can lead to inflation.
If you have comments on the piece, post them on the blog.
No comments:
Post a Comment