Please enable JavaScript.
Coggle requires JavaScript to display documents.
2) Real Estate in the Economy - Coggle Diagram
2) Real Estate in the Economy
Economic Cycles
High growth usually comes with inflation but low unemployment rate
HK before 1997 or China in the last two decades
Economic recessions usually come with low inflation or even deflation and unemployment
Keynesian economics: aggregate demand affects output, employment and prices
Keynesian Multiplier
1$ Delta in investments leads to more than a dollar change in GDP, when there are unemployed resources to employ.
empirics show that its 1.4 only for the first 2 years and then declines
1 more item...
Richard Harrisa,, Godwin Arkub
Cycles are fluctuations in output, income and employment
Signs of recesion
Loss of consumer confidence
Unemployment goes up
Output falls and inflation slows down
Business profits fall and stock prices drop or even collapse
Sources of recession
Exogenous
War
oil prices
inovations
Internal
form within the economy - expansion leading to recession and then again
Demand Induced Cycles
Increase or decrease in aggregate demand resulting in increase or decrease of outputs respectively
Forecasting Cycles
Purchasing Managers’ Index [PMI]
measuring consumers confidence
Econometric modelling based on historical data
looking at output gdp etc
Output determination
Economy at equilibrium when total expenditure [consumption + investment] equals total output [GDP]
disequalibrium - expenditure is larger or smaller than the total output
