Inflation lecture notes pdf

Lectures on inflation 1 given at summer school on cosmology, ictp, july 2012. Classical business cycle and price and wage rigidity. The unemployment rate at the output equilibrium no output gap. The movie inflation rate in 1998 is the percentage change in the price index between 1997 and 1998, or. Saving, investment, and the real interest rate in the long run 1. Figure 85, taken from bob lucass nobel prize lecture shows, for something like 100 countries, data on the inflation rate and growth of the money supply.

The united states has low inflation now, but during the 1970s the price level doubled. Inflation in an economy may arise from the overall increase in the cost of production. Lecture notes 10 the new inflationary universe mit. One of the important causes of inflation is the decline in production, when the production of agricultural and industrial output falls short of the desired level, then the price level increases as a result of increasing demand.

Introduction to economics flow in an economy, law of supply and demand, concept of engineering economics engineering efficiency. It assumes a background in neither general relativity nor statistical mechanics. Inflation can be caused by either demandpull inflation or cost push inflation inflation inflation is a sustained increase in the price level. Mar 12, 2020 lecture were not included in the course capture. Although recently, actually, in the past few years, people have written a number of papers proposing that maybe the higgs field of the. Cosmology the early epoch international winter school on gravity and light 2015 duration. Inflation is caused by increasing aggregate demand levels, cost push inflation, inflationary expectations, imported inflation increase in the price of imported goods for each of the following scenarios, use supply demand analysis to predict the resulting changes in the real interest rate, national savings and investment. Reducing unemployment and inflation are two of the key macroeconomic objectives of any government. The subtopics for each lecture are related to the chapters in the textbook. According to crowther, inflation is state in which the value of. Creeping inflation is inflation the rate of inflation exceeds the rate of production growth, galloping inflation is from 10% to 100%. This is a course on cosmology, aimed at final year undergraduate students. Suppressed inflation if state authorities damp or even stop the rise of price level by administrative means. This provides our basis for a more detailed look at inflation.

Pdf mg6863 engineering economics ee books, lecture. The weheraeus international winter school on gravity and light 10,141 views 1. Economics lecture notes chapter international economics will be covered in economics tuition in the first, second, third and fourth weeks of term 3. Cyclical unemployment refers to the additional unemployment that occurs during. Introduction to macroeconomics lecture notes robert m. In such cases the provision of basic necessities such as agricultural products is. The longrun phillips curve is vertical, suggesting that there is no tradeoff between unemployment and inflation. However, in some economies such as singapore, the central bank chooses to control exchange rates to manage the economy. Although the field that drives inflation, which is by definition, called the inflation, is probably not the higgs field of the standard model. When the general price level rises, each unit of currency buys fewer goods and services. Lecture notes 10 the new inflationary universe introduction. The new in ationary universe is a scenario in which the mass density of at least a small patch of the early universe becomes dominated by the potential energy of a scalar eld, in a state which is sometimes called a. Inflation is a very old problem and some countries even in recent times have experienced rates as high as 40 percent per month. This section provides lecture notes from the course.

Inflation is a rise in the general level of prices of goods and services in an economy over a period of time. As you can see, there is a clear correlation between the inflation rate and money supply. Money loose purchase power, people hold as little money as possible. Economics lecture notes chapter 10 interest rate and exhange rate will be covered in the sixth and seventh weeks of term 1 in economics tuition. As it is known in economics, inflation is an indirect tax by the government due to an increase in the amount of money in circulation that erodes the purchasing power of the initial currency in the. Chapter9 poverty concept and trends analysis part1 click me. Inflation rate note that the real interest rate can even be negative. These lecture notes were prepared by xingze wang, yinghsuan lin, and frederick jao specifically for mit opencourseware. But then again, in 1931, an ice cream cone cost a nickel and a movie. The observed galaxies, quasars and supernovae, as well as observations of in tergalactic absorption lines, tell us about the state of.

The natural rate theory natural rate of unemployment m. Syllabus, question banks, books, lecture notes, important part a 2 marks questions and important part b 16 mark questions, previous years question papers collections. This economic video lectures series basic to advance course in process specially designed for beginner or freshers for 2020 or 2021 for civil services exam has been completed. Money growth and inflation introduction remember our previous example from chapter 23, measuring the cost of living. The new in ationary universe is a scenario in which the mass density of at least a small patch of the early universe becomes dominated by the potential energy of a scalar eld, in a state which is sometimes called a false vacuum. But more recent experience in the united states indicates that. Romer did in the lecture are now included at the end of the outline and slides file for lecture 14 on the course website.

Measuring a nations income 1 structure of the course. The sveriges riksbank prize in economic sciences in memory of alfred nobel 1976 was awarded to milton friedman for his achievements in the fields of consumption analysis, monetary history and theory and for his demonstration of the complexity of stabilization policy. Hyperinflation is inflation that is out of control, a condition in which prices increase. Leonardo senatore submitted on 2 sep 2016 abstract.

Therefore, inflation also reflects an erosion of purchasing power of money. Types of inflation open inflation if economic imbalance is accompanied with rising price level. Inflation can distort economic variables like gdp, so we have two versions of gdp. Governments rarely want high unemployment as it is a waste of resources. Often trade unions are blamed for wage rise since wage rate is not completely market. Real gdp values output using the prices of a base year. Most economists now agree that in the long run there is no tradeoff between inflation and unemployment. Notes on inflation doubledigit inflation in consumer prices on a yeartoyear basis i. Economics 14 class notes spring 2005 introduction scarcity and choice. Gross domestic product measuring a nations income 0 august 28, 2014 prof. The inflation rate in 1997 is the percentage change in the price index numbers in 1996 and 1997, or. I begin with a description of the initial conditions problems of the friedmannrobertsonwalker frw cosmology and then explain how inflation, an early period of accelerated expansion, solves these problems. Such situation is followed by existence of scarce commodities, shadow economy etc. Pdf mg6863 engineering economics ee books, lecture notes.

But the real interest rate, corrected for the effects of inflation, is 7%. The lecture notes are from one of the discussion sections for the course. An aggregate is a multitude of economic subjects that share some common features. For convenience, we will repeat figure 45 here as figure 81. The consumer price index cpi tracks changes in the prices paid by consumers for a representative or market basket of goods and services. This type of inflation is known as costpush inflation henceforth cpi. The importance of the longrun saving and investment diagram 2. Lecture notes principles of macroeconomics economics. The lecture notes combine the approaches of and adapt materials in both books. Since in the long run the economy produces at potential output y pthe point at which the unemployment rate is at the natural ratethe longrun. In some economies such as the united states, the central bank chooses to control interest rates to manage the economy.

With few exceptions, the articles are also summarized in romer or blanchard and fischer. This procedure involves estimating expected inflation as a function of past interest rates, inflation, and time trends and then subtracting the expected inflation measure from the nominal interest rate. The goals of macroeconomic policy macroeconomic policy o monetary policy. Macroeconomics 1880 1900 1920 1940 1960 1980 2000 matthiasdoepke universityofchicago andreaslehnert boardofgovernorsofthe federalreservesystem andreww. Inflation rates in the united states have been relatively low since 1983. And indeed, inflation is very much modeled on the higgs field. Please do email me if you find any typos or mistakes. Mg6863 engineering economics ee syllabus unit i introduction to economics. References in the notes refer to articles given on the reading list. Lecture notes principles of microeconomics economics. What are the causes of inflation study lecture notes. Pdf on jan 1, 2004, sumru altug and others published lecture notes on macroeconomics find, read and cite all the research you need on researchgate. The end of the inflation after world war ii was also reasonably favorable, accompanied as it was by only a relatively mild recession. These lecture notes provide an introduction to cosmic inflation.

The natural rate of unemployment is the rate of unemployment that the economy experiences even during normal times, that is, even when the economy is not in a recession. A lightweight introductory guide to the theory of inflation. The price level is the weighted average of all prices in the economy. Money and captial market lecture 10 c10 click me lecture notes lecture 1 to 10 pdf click me. Cost of production may rise due to an increase in the prices of raw materials, wages, etc. Dont post outcomes results to learning mastery gradebook. Download link is provided and students can download the anna university mg6863 engineering economics ee syllabus question bank lecture notes syllabus part a 2 marks with answers part b 16 marks question bank with answer, all the materials are listed below for the students to make use of it and score good maximum marks with our study materials. Students can refer to economics a singapore perspective for the diagrams. Lecture 20 cosmology, inflation, dark matter university of rochester. Then i will address in detail the three fundamental observations that have shaped our present knowledge. Lecture notes for this material which go into more detail than prof.