revision
I have exams in a few weeks, and I’ve been doing more work than I ever have in my life before (mainly because last term I spent the whole time getting drunk, and got quite behind). Economics gets worse and worse. Macroeconomics started with the Keynesian multiplier (if consumption, government spending, or investment is increased, or taxes decrease, production will increase by a larger amount owing to the multiplier effect), and we have ended by learning about how if inflation is too high, you have to increase unemployment (by increasing the interest rate, and therefore decreasing money growth - i think this is right anyway, it is quite late now).
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is the multiplier still 10? that takes me back to the good old days … when so-called “natural unemployment” wasn’t patently offensive…
Comment by geo @ 5/23/2005 5:02 pm
i think the multiplier is 2.5 in the US - the multiplier is 1/(1-C1) - c1 is the marginal propensity to consume, and is thought to be equal to .6 at the moment (at least according to my textbook. )
Comment by rachel @ 5/25/2005 4:01 am
If it’s any comfort I flunked economics back in the day because I couldn’t get my head round some of the things we were supposed to assume. I’ve since met several professional academic economists who have assured me after the third pint that their discipline is in fact subjective guesswork/voodoo/random crap, but it’s a living anyway.
So good luck.
Comment by chris @ 5/27/2005 1:57 pm