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Moving Parts

Moving Parts. We’ve dealt with one initiating change at a time M s up, G up, μ up, z up We know that ceteris isn’t ever paribus Other things change as well, often in response to the initiating change that we’re studying The “natural rate” shifts

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Moving Parts

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  1. Moving Parts We’ve dealt with one initiating change at a time Ms up, G up, μ up, z up We know that ceteris isn’t ever paribus Other things change as well, often in response to the initiating change that we’re studying The “natural rate” shifts A hysteresis response to the change in output we’re studying Productivity increases and labor force increases trends affected by the change we’re studying Energy and other costs that jump around Monetary policy responds to the initiating change Leaning against the wind Such simultaneous shocks and responses can be handled by a computerized model We’ll stick to ceteris paribus

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