Keynesian theory/Tutorials: Difference between revisions

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Let:-<br>
Let:-<br>
&nbsp;&nbsp;&nbsp;&nbsp;y&nbsp;=&nbsp;the thenational income<br>
&nbsp;&nbsp;&nbsp;&nbsp;y&nbsp;=&nbsp;the national income<br>
&nbsp;&nbsp;&nbsp;&nbsp;N&nbsp;=&nbsp;numbers employed<br>
&nbsp;&nbsp;&nbsp;&nbsp;N&nbsp;=&nbsp;the numbers employed<br>
&nbsp;&nbsp;&nbsp;&nbsp;W&nbsp;=&nbsp;the money wage<br>
&nbsp;&nbsp;&nbsp;&nbsp;W&nbsp;=&nbsp;the money wage<br>
&nbsp;&nbsp;&nbsp;&nbsp;P&nbsp;=&nbsp;the price level<br>
&nbsp;&nbsp;&nbsp;&nbsp;P&nbsp;=&nbsp;the price level<br>
&nbsp;&nbsp;&nbsp;&nbsp;M&nbsp;=&nbsp;the money supply<br>
&nbsp;&nbsp;&nbsp;&nbsp;M&nbsp;=&nbsp;the money supply<br>
&nbsp;&nbsp;&nbsp;&nbsp;l&nbsp;=&nbsp;the income elasticity of demand for money<br>
&nbsp;&nbsp;&nbsp;&nbsp; l&nbsp;=&nbsp;the income elasticity of demand for money<br>
&nbsp;&nbsp;&nbsp;&nbsp;L&nbsp;=&nbsp;the interest elasticity of demand for money<br>
&nbsp;&nbsp;&nbsp;&nbsp; L&nbsp;=&nbsp;the interest elasticity of demand for money<br>


then:-<br>
then:-<br>

Revision as of 05:11, 21 November 2009

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https://en.citizendium.org/wiki/index.php?title=Keynesian_theory/Tutorials&printable=yes
Tutorials relating to the topic of Keynesian theory.

The Keynesian model

Let:-
    y = the national income
    N = the numbers employed
    W = the money wage
    P = the price level
    M = the money supply
     l = the income elasticity of demand for money
     L = the interest elasticity of demand for money

then:-

The demand for money

M = lPy + L(r)   ------------------------ (1)


The consumption function

s = s(y)   -------------------------------- (2)


The production function

y = y(n)  ------------------------------------ (3)


The labour market

dy/dn = W/P  ------------------------------- (4)


Investment

i = i(r)  --------------------------------------- (5)


Savings

s = i  ------------------------------------------ (6)


Sticky wages

W =Wo,  --------------------------------------------------- (7)
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