In the model SIM of chapter 3 of the book of Godley, Wynne, and Marc Lavoie. 2012. Monetary Economics: An Integrated Approach to Credit, Money, Income, Production and Wealth. 2nd ed. 2012 edition., starting from a stationary state simulate the effect of an increase in government expenditure under four variations of the model: a model where expected disposable income is always constant and equal to 20: Y De = 20 Discuss the trajectory of output from the original stationary state to the new one.
In the model SIM of chapter 3 of the book of Godley, Wynne, and Marc Lavoie. 2012. Monetary Economics: An Integrated Approach to Credit, Money, Income, Production and Wealth. 2nd ed. 2012 edition., starting from a stationary state simulate the effect of an increase in government expenditure under four variations of the model: a model where expected disposable income is always constant and equal to 20: Y De = 20 Discuss the trajectory of output from the original stationary state to the new one.
Principles of Economics 2e
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ISBN:9781947172364
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Publisher:Steven A. Greenlaw; David Shapiro
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In the model SIM of chapter 3 of the book of Godley, Wynne, and Marc Lavoie. 2012. Monetary Economics: An Integrated Approach to Credit, Money, Income, Production and Wealth. 2nd ed. 2012 edition., starting from a stationary state simulate the effect of an increase in government expenditure under four variations of the model:
- a model where expected disposable income is always constant and equal to 20: Y De = 20
Discuss the trajectory of output from the original stationary state to the new one.
![Figure 3.6: Impact on Y and Y* of an increase in G when YDe remains fixed
130
120
110
100
90
80
60
65
70
75
80
85
90
Steady state solution for Income Y
Income Y
95
00](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F295fd57e-125d-4c83-8c30-33e119b97b32%2Fafaa4d56-fe51-4e1b-b12e-5fd3fd7ad9c3%2Fp69ose_processed.png&w=3840&q=75)
Transcribed Image Text:Figure 3.6: Impact on Y and Y* of an increase in G when YDe remains fixed
130
120
110
100
90
80
60
65
70
75
80
85
90
Steady state solution for Income Y
Income Y
95
00
![Figure 3.6: Impact on Y and Y* of an increase in G when YDe remains fixed
240
200
160
120
80
40
0
60
65
70
75
80
85
90
Wealth H
Disposable Income YD
Consumption C
Expected disposable Income YDe
95
00](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F295fd57e-125d-4c83-8c30-33e119b97b32%2Fafaa4d56-fe51-4e1b-b12e-5fd3fd7ad9c3%2Fotcy9vl_processed.png&w=3840&q=75)
Transcribed Image Text:Figure 3.6: Impact on Y and Y* of an increase in G when YDe remains fixed
240
200
160
120
80
40
0
60
65
70
75
80
85
90
Wealth H
Disposable Income YD
Consumption C
Expected disposable Income YDe
95
00
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