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Lecture 11: Business Cycles, Inflation and Monetary Policy (Part 1) -…
Lecture 11: Business Cycles, Inflation and Monetary Policy (Part 1)
Business Cycles
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recession may lead to scrapping of inefficient equipment, raising the productivity of capital stock => foster future growth
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Co- movements
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expansions and recessions spill over across countries, however, these links are not perfect and change over time
Frisch- Slutsky Paradigm
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Business cycle: outcome, medium term variation in GDP
Impulse: shock (monetary/ fiscal policy, changes in C or I)
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