scholarly journals Oligopolistic Pricing and the Effects of Aggregate Demand on Economic Activity

10.3386/w3206 ◽  
1989 ◽  
Author(s):  
Julio Rotemberg ◽  
Michael Woodford
Keyword(s):  
Economic Activity ◽  
Aggregate Demand ◽  
Oligopolistic Pricing

scholarly journals Oligopolistic Pricing and the Effects of Aggregate Demand on Economic Activity

1992 ◽  
Vol 100 (6) ◽  
pp. 1153-1207 ◽  
Author(s):  
Julio J. Rotemberg ◽  
Michael Woodford
Keyword(s):  
Economic Activity ◽  
Aggregate Demand ◽  
Oligopolistic Pricing

Economic effects of monetary policy in Russia: What do large datasets tell us?

2020 ◽  
pp. 31-53 ◽  
Author(s):  
Anna A. Pestova ◽  
Natalia A. Rostova
Keyword(s):  
Monetary Policy ◽  
Interest Rate ◽  
Interest Rates ◽  
Economic Activity ◽  
Global Financial Crisis ◽  
Exchange Rate Regime ◽  
Aggregate Demand ◽  
Economic Effects ◽  
Theoretical Concepts ◽  
Empirical Estimates

Is the Bank of Russia able to control inflation and, at the same time, manage aggregate demand using its interest rate instruments? In other words, are empirical estimates of the effects of monetary policy in Russia consistent with the theoretical concepts and experience of advanced economies? This paper is aimed at addressing these issues. Unlike previous research, we employ “big data” — a large dataset of macroeconomic and financial data — to estimate the effects of monetary policy in Russia. We focus exclusively on the period after the 2008—2009 global financial crisis when the Bank of Russia announced the abandoning of its fixed ruble exchange rate regime and started to gradually transit to an interest rate management. Our estimation results do not confirm standard responses of key economic activity and price variables to tightening of monetary policy. Specifically, our estimates do not reveal a statistically significant restraining effect of the Bank of Russia’s policy of high interest rates on inflation in recent years. At the same time, we find a significant deteriorating effect of the monetary tightening on economic activity indicators: according to our conservative estimates, each of the key rate increases occurred in March and December 2014 had led to a decrease in the industrial production index by about 0.2 percentage points within a year.

scholarly journals Macroeconomics Activity and Role of Zaka in Achieving Economic Stability (Aggregate Demand/ Mathematical Analysis Study): الزكاة والنشاط الاقتصادي الكلي ودورهما في تحقيق الاستقرار الاقتصادي (الطلب الكلي/ دراسة تحليلية اقتصادية رياضية)

2021 ◽  
Vol 5 (23) ◽  
pp. 23-1
Author(s):  
Ahmad Mohammad Alsaad, Shatha Musa Al-Rawabdeh Ahmad Mohammad Alsaad, Shatha Musa Al-Rawabdeh
Keyword(s):  
Economic Growth ◽  
Mathematical Analysis ◽  
Economic Activity ◽  
Aggregate Demand ◽  
Graphical Analysis ◽  
Economic Stability ◽  
Analysis Study ◽  
Fund Development ◽  
Fund Investment

This research aimed to clarify and show the economic impact of Zaka fund development through theoretical, mathematical, and graphical analysis on macroeconomics variables which is related to aggregate demand, Researchers used theoretical, mathematical, graphical approaches for explanation economic variables. and used deductive approach through shows the effect of zakat on the aggregate Demand. The researcher concludes that the duty of Zaka induces economic growth and protects the economy from risk fluctuations whether it is recession or inflation. The researcher recommends to work on promoting the revival of Zaka, and the Zakat should be compulsory not voluntary through laws and regulations, ࢫbecause it raises the level of economic activity through its direct effect to stimulate fund investment, raise consumer’s demand and expand the market.

On the Microfoundations of Macroeconomics

2013 ◽  
pp. 44-61 ◽  
Author(s):  
Abu Rizvi
Keyword(s):  
General Equilibrium ◽  
Economic Activity ◽  
Aggregate Demand ◽  
Classical Approach ◽  
Asset Accumulation ◽  
John Maynard Keynes ◽  
Ontological Reduction ◽  
Hyman Minsky

In a review of Asset Accumulation and Economic Activity by James Tobin, Hyman Minsky outlined three types of macroeconomic approaches after John Maynard Keynes: the neoclassical synthesis, the New Classical approach, and fundamentalist Keynesian scholarship. Each of the three streams of thought identified by Minsky had trouble finding acceptance. Regarding the fundamentalist Keynesians, Minsky’s third group, this chapter suggests why mainstream economists tended to ignore them, attributing this neglect to a form of dogmatism. The bulk of this chapter, though, focuses on criticism leveled against the two other approaches quite directly, namely, that they had inadequate microfoundations. Unless otherwise stated, the microfoundations referred to in this chapter concern the aggregate manifestations of the general equilibrium (of the Arrow-Debreu type) of maximizing individual agents. Also discussed are the arbitrariness of aggregate demand and its implications, the Sonnenschein-Mantel-Debreu theory, and ontological reduction and explanatory reduction.

scholarly journals The Stock Market and the Economy in Pakistan

2001 ◽  
Vol 40 (2) ◽  
pp. 107-114 ◽  
Author(s):  
Fazal Husain ◽  
Tariq Mahmood
Keyword(s):  
Stock Market ◽  
Error Correction ◽  
Stock Prices ◽  
Economic Activity ◽  
Aggregate Demand ◽  
Annual Data ◽  
Consumption Expenditure ◽  
Long Run ◽  
Investment Spending ◽  
Macro Variables

This paper re-examines the causal relationship between stock prices and macro variables like consumption expenditure, investment spending, and economic activity (measured by GDP) in Pakistan. Using annual data from 1959-60 to 1998-99 and applying cointegration and error correction analysis, the paper indicates the presence of long-run relationship between stock prices and macro variables. Regarding the cause and effect relationship, the analysis indicates a one-way causation from macro variables to stock prices, implying that in Pakistan fluctuations in macro variables cause changes in stock prices. The findings suggest that the stock market in Pakistan is not that developed to play its due role in influencing aggregate demand. A disturbing feature of the stock market in Pakistan is that it cannot be characterised as the leading indicator of economic activity. In the absence of other strong indicators, shooting up of stock prices may indicate a speculative bubble.

scholarly journals Breaking Say’s law in a simple market economy model

2020 ◽  
Vol 39 (81) ◽  
pp. 897-918
Author(s):  
Carlos Humberto Ortiz Quevedo ◽  
Rodrigo Castillo Rentería
Keyword(s):  
Market Economy ◽  
Economic Activity ◽  
Capital Accumulation ◽  
Aggregate Demand ◽  
Returns To Scale ◽  
Increasing Returns ◽  
Market Size ◽  
Increasing Returns To Scale ◽  
Production Factors ◽  
Constant Returns To Scale

This paper analyses a multi-sector market economy where preferences are non-homothetic and satiable. Capital and labour are the production factors. Food and manufactured goods are produced with a constant-returns-to-scale technology and an increasing-returns-to-scale technology, respectively. Results include: an original capital accumulation process is required for manufacturing industrialization to take place, a minimum market size is needed for the economy to operate, and capital property concentration diminishes aggregate demand. Full general equilibrium is possible for intermediate degrees of capital concentration, but the price system collapses under high degrees as an economy regulator, labour unemployment is unavoidable, and a minimum wage is justified to enhance economic activity.

Confidence and the Propagation of Demand Shocks

2021 ◽  
Author(s):  
George-Marios Angeletos ◽  
Chen Lian
Keyword(s):  
Business Cycles ◽  
Economic Activity ◽  
Feedback Loop ◽  
Aggregate Demand ◽  
Demand Shocks ◽  
Business Cycle Fluctuations ◽  
Nominal Rigidity ◽  
Supply Shocks ◽  
Private Spending ◽  
The Business Cycle

Abstract We revisit the question of why shifts in aggregate demand drive business cycles. Our theory combines intertemporal substitution in production with rational confusion, or bounded rationality, in consumption and investment. The first element allows aggregate supply to respond to shifts in aggregate demand without nominal rigidity. The second introduces a “confidence multiplier,” that is, a positive feedback loop between real economic activity, consumer expectations of permanent income, and investor expectations of returns. This mechanism amplifies the business-cycle fluctuations triggered by demand shocks (but not necessarily those triggered by supply shocks); it helps investment to comove with consumption; and it allows front-loaded fiscal stimuli to crowd in private spending.

scholarly journals Disentangling the Effects of a Banking Crisis: Evidence from German Firms and Counties

2018 ◽  
Vol 108 (3) ◽  
pp. 868-898 ◽  
Author(s):  
Kilian Huber
Keyword(s):  
Economic Activity ◽  
Aggregate Demand ◽  
Banking Crisis ◽  
Bank Lending ◽  
Firm Level ◽  
Present Evidence ◽  
German Bank ◽  
Banking Relationships

Lending cuts by banks directly affect the firms borrowing from them, but also indirectly depress economic activity in the regions in which they operate. This paper moves beyond firm-level studies by estimating the effects of an exogenous lending cut by a large German bank on firms and counties. I construct an instrument for regional exposure to the lending cut based on a historic, postwar breakup of the bank. I present evidence that the lending cut affected firms independently of their banking relationships, through lower aggregate demand and agglomeration spillovers in counties exposed to the lending cut. Output and employment remained persistently low even after bank lending had normalized. Innovation and productivity fell, consistent with the persistent effects. (JEL E32, E44, G01, G21, G32, R11, R23)

The effects of fiscal policy in a small open transition economy: The case of Croatia

2014 ◽  
Vol 64 (Supplement-1) ◽  
pp. 133-152 ◽  
Author(s):  
Milan Deskar-Škrbić ◽  
Hrvoje Šimović ◽  
Tomislav Ćorić
Keyword(s):  
Government Spending ◽  
Economic Activity ◽  
Private Consumption ◽  
Transition Economy ◽  
Aggregate Demand ◽  
Private Investment ◽  
Structural Var ◽  
Var Model ◽  
Dynamic Effects ◽  
Indirect Taxes

In this paper, we use the structural VAR model to analyse the dynamic effects of (discretionary) fiscal shocks on the economic activity of the private sector in Croatia between 2000 and 2012. Due to the fact that Croatia is a small open transition economy, we assume that shocks of foreign origin can have notable effects on its performance. Therefore, the original Blanchard-Perotti identification method is extended by introducing variables that represent external (foreign) demand shocks. The results show that government spending has a positive and statistically significant effect on private aggregate demand and private consumption, and that net indirect taxes have a negative and statistically significant effect on private consumption and private investment.

scholarly journals Dynamics of the impact of COVID-19 on the economic activity of Peru

PLoS ONE ◽  
2021 ◽  
Vol 16 (1) ◽  
pp. e0244920
Author(s):  
Luis Varona ◽  
Jorge R. Gonzales
Keyword(s):  
Economic Activity ◽  
Structural Characteristics ◽  
Human Life ◽  
Aggregate Demand ◽  
Economic Recession ◽  
Basic Number ◽  
Monetary Policies ◽  
The Impact ◽  
Cointegration Relationship

Background The COVID-19 virus impacts human health and the world economy, causing in Peru, more than 800 thousand infected and a strong recession expressed in a drop of -12% in its economic growth rate for 2020. In this context, the objective of the study is to analyze the dynamics of the short-term behavior of economic activity, as well as to explain the causal relationships in a Pandemic context based on the basic number of spread (Re) of COVID-19 per day. Methods An Autoregressive Distributed Lags (ARDL) model was used. Results A negative and statistically significant impact of the COVID-19 shock was found on the level of economic activity and a long-term Cointegration relationship with an error correction model (CEM), with the expected sign and statistically significant at 1%. Conclusion The Pandemic has behaved as a systemic shock of supply and aggregate demand at the macroeconomic level, which together have an impact on the recession or level of economic activity. The authors propose changing public health policy from an indiscriminate suppression strategy to a targeted, effective and intelligent mitigation strategy that minimizes the risk of human life costs and socioeconomic costs, in a context of uncertainty about the end of the Pandemic and complemented by economic, fiscal and monetary policies that mitigate the economic recession, considering the underlying structural characteristics of the Peruvian economy.

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