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Teaching Aggregate Demand and Supply Models

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  • Wells, Graeme

    (School of Economics and Finance, University of Tasmania)

Abstract

This note analyses the inflation-targeting model that underlies recent textbook expositions of the Aggregate Demand-Aggregate Supply approach used in introductory courses in macroeconomics. The paper shows how numerical simulations of a model with inflation inertia can be used as a tool to help students understand adjustments in response to demand and supply shocks of various kinds.

Suggested Citation

  • Wells, Graeme, 2007. "Teaching Aggregate Demand and Supply Models," Working Papers 2173, University of Tasmania, Tasmanian School of Business and Economics, revised Sep 2007.
    • Handle: RePEc:tas:wpaper:2173
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    File URL: http://eprints.utas.edu.au/2173/
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    References listed on IDEAS

    as
    1. GORDON De BROUWER & JAMES GILBERT, 2005. "Monetary Policy Reaction Functions in Australia," The Economic Record, The Economic Society of Australia, vol. 81(253), pages 124-134, June.
    2. David H. Romer, 2000. "Keynesian Macroeconomics without the LM Curve," Journal of Economic Perspectives, American Economic Association, vol. 14(2), pages 149-169, Spring.
    3. Taylor, John B., 1993. "Discretion versus policy rules in practice," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 39(1), pages 195-214, December.
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    Keywords

    economic modeling; econometrics; teaching methods; instructional materials;
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