Williamson Macroeconomics

Front 1

Average Labor Productivity

Back 1

Aggregate output produced per worker

Front 2

Business Cycles

Back 2

Short-run variations about the trend in Real GDP.

Front 3

Competitive Equilibrium

Back 3

Equilibrium in which firms and consumers are price takers and market prices are such that the quantity demanded equals quantity supplied

Front 4

Crowding out

Back 4

the process by which government expenditure decreases private consumption or investment

Front 5

Current Account Deficit

Back 5

Situation in which the balance of the current account surplus is negative

Front 6

Current Account Surplus

Back 6

Exports minus imports plus NFP from abroad

Front 7

Efficiency Wage theory

Back 7

theory posing that workers are unemployed because there exists an excess in the labor supply because firms pay their workers higher wages not to shirk.

Front 8

Government Deficit

Back 8

The when the government's surplus is negative

Front 9

Government Surplus

Back 9

Tax Revenue-G

Front 10

Government Saving

Back 10

GS=Government Surplus

Front 11

GDP

Back 11

The quantity of goods and services produced within a country's borders during a specific period of time

Front 12

Inflation

Back 12

the rate of change of the general price level over time

Front 13

Keynesian Economists

Back 13

Believe that government can and should play an active role in smoothing out business cycles.

Front 14

Lucas Critique

Back 14

Macroeconomic theory can be undertaken in a serious way iff we take microeconomic foundations seriously

Front 15

Net Exports

Back 15

Exports-Imports

Front 16

NFP

Back 16

Payments received from foreign factors of production from abroad minus payments sent from domestic factors of production.

Front 17

Nominal Interest Rate

Back 17

The interest rate in nominal or money terms

Front 18

Phillips Curve

Back 18

the positive correlation relationship between positive deviations in output trend and inflation.

Front 19

Real business cycle theory

Back 19

Technology shocks cause business cycles and gov't should play a passive role

Front 20

Real interest rate

Back 20

=nominal interest rate-expected rate of inflation

Front 21

Ricardian Equivalence thm

Back 21

changes in taxation by gov't have no effect

Front 22

Capital stock

Back 22

quantity of plant, equipment, housing and inventories in existence in an economy at a specific point in time

Front 23

CPI

Back 23

Expenditures on base year quantities at current year prices/expenditures on base year quantities at base year prices *100

Front 24

Consumption

Back 24

goods and services produces and consumed in the economy

Front 25

Current account surplus

Back 25

Net Factor Payments + Net Exports

Front 26

Discouraged Workers

Back 26

Those who are not counted in the labor force and have stopped looking for work, but they actually wish to be employed

Front 27

Employed

Back 27

those who worked part time or full time within the last week

Front 28

Fixed investment

Back 28

Investment in housing, plant and equipment

Front 29

Flow

Back 29

a rate variable per unit of time

Front 30

Government deficit

Back 30

= -1*(Government Surplus)

Front 31

Government Saving

Back 31

=T-G-INTEREST-TRANSFER

Front 32

Government Surplus

Back 32

=Government Saving= -1*(Government Deficit)

Front 33

GNP

Back 33

=GDP+NFP from abroad

Front 34

Implicit GDP Deflator=

Back 34

Nominal GDP/Real GDP *100

Front 35

Income Expenditure Identity

Back 35

Y=C+I+G+NX

Front 36

Inflation Rate

Back 36

The rate of change of the price level from one period to another

Front 37

Intermediate good

Back 37

A good that is produced and then used to produce a final product

Front 38

Inventory Investment

Back 38

goods that are produces during current period and are put aside for use later (counts as investment)

Front 39

Labor market Tightness

Back 39

The degree of difficulty in firms hiring workers

Front 40

National Savings=

Back 40

=Private Savings+Government Savings
=Private Savings+Government Surplus
=Investment+NX+NFP
=Investment+CAsurplus
=Investment+(-1)(CAdeficit)

Front 41

Not in labor force

Back 41

those who are neither employed nor unemployed

Front 42

Participation rate

Back 42

Those in labor force/Total eligible population

Front 43

Price Level

Back 43

The average level of prices of all goods and services across economy

Front 44

Private disposable income=

Back 44

=Y+INT+TR-T

Front 45

Private sector savings=

Back 45

Yd-C

Front 46

Stock Variable

Back 46

quantity in existence at some point in time

Front 47

Transfers

Back 47

Government expenditures that take purchasing power from one group to give to another

Front 48

Unemployed

Back 48

Not worked in the last week, but have searched for work within the last month

Front 49

Unemployment rate=

Back 49

=#unemployed/#in labor force

Front 50

Acyclical

Back 50

describes an economic variable that is neither pro cyclical nor counter cyclical

Front 51

Amplitude

Back 51

Maximum deviation from trend in an economic time series

Front 52

Average labor productvity

Back 52

y/n

Front 53

Boom

Back 53

A period when GPD is deviating positively from trend, culminating in a peak

Front 54

Business Cycles

Back 54

Fluctuations about trend in Real GDP

Front 55

Coincident variable

Back 55

an economic variable that neither leads nor lags real GDP

Front 56

Co-movement

Back 56

how economic variables move with respect to real GDP

Front 57

Correlation coefficient

Back 57

r, a measure of the degree of correlation between two variables

Front 58

Countercyclical

Back 58

An economic variable that is below trend when real GDP is above trend.

Front 59

Frequency

Back 59

the number of peaks in an economic time series that occur in one year

Front 60

Lagging Variable

Back 60

An economic variable that past real GDP helps to predict

Front 61

Leading Variable

Back 61

an economic variable that helps to predict real GDP

Front 62

Peak

Back 62

A large deviation from trend in Real GDP

Front 63

Persistence

Back 63

describes the phenomenon of RGDP tending to stay below trend if it was below trend the period before.

Front 64

Procyclical

Back 64

describes an economic variable that tends to be below trend when realGDP is below trend

Front 65

real wage

Back 65

the purchasing power of a wage one earns by working for one hour

Front 66

recession

Back 66

a series of negative deviations from trend in real GDP

Front 67

Standard deviation of a trend

Back 67

the cyclical variability can be measured by the standard deviation of the percentage deviations from trend

Front 68

trough

Back 68

a relatively large negative deviation from trend (as opposed to a peak)

Front 69

Budget constraint

Back 69

conumption=wage income+nonwage income-taxes
c=w(h-l)+pi-t

Front 70

Constant returns to scale

Back 70

property of production technology that if firm increases inputs by x, then outputs increase by the same proportion, x