Question
Show the impact of a permanent decrease in the money supply using the AA/DD model diagram (which includes the assumption of short-run price stickiness) and
Show the impact of a permanent decrease in the money supply using the AA/DD model diagram (which includes the assumption of short-run price stickiness) and starting from full employment equilibrium. Is it consistent with the long-run, sticky price model in lecture 4 (briefly explain)?
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International Economics Theory and Policy
Authors: Paul R. Krugman, Maurice Obstfeld, Marc Melitz
11th Edition
134519574, 9780134521046 , 978-0134519579
