Category Teaching
Keynes’ GT Chapter 3
Keynes' "aggregate supply function" in chapter 3 of the General Theory is just the "classical" labour demand function plus the "classical" production function. Except for the weird presentation, there is nothing new there. It is old and boring. It is Keynes' "aggregate demand function" that is new and exciting. [Update: See Roger Farmer's response.]
The 45 degree line means Y=min{Yd,Ys}
(I'm disagreeing with Roger Farmer on the interpretation of the 45 degree line. I say the 45 degree line is not a supply curve. This post explains what I think it is.) Here's the Keynesian Cross diagram: How should we interpret the green 45 degree line?
A simple New Keynesian brain-teaser
Update: I sketch my own answer in the comments below. This is a question for all students of New Keynesian macroeconomics. I mean "students" in the sense of "those who study", so that includes the profs too. It is a very basic question. There is no fancy math to fool you. If you cannot answer […]
Two simple NK pictures
I'm staying out of this argument. But I can't resist a challenge to show the New Keynesian model in pictures, with indifference curves, production functions, and budget lines. I can't do it in one picture. I need two.
On intro micro first, and splitting micro and macro
I thought Noah Smith's post on why we should teach intro micro before intro macro was very good. I agree with Noah: even though macro is much more glamorous, micro is just as useful and important, and we are more confident that micro works. (Read his post for the full story.) I want to add […]
A suggestion for simplifying some macro math
She took a lot of heat for saying it, but I agree with Talking Barbie: math class is hard. It's especially hard in economics. And I find it much harder than most economists. So I have always been on the hunt for devious little tricks to avoid doing hard math. Here's one such trick:
Pictures of adverse selection in an insurance market, with and without death spirals
This is a simple model, with diagrams, of adverse selection in an insurance market. It's mostly for teaching purposes. (Adverse selection is currently very topical in the US, but it's a perennial problem that applies to all forms of insurance markets, and many other markets too.) I don't know if these diagrams are in any […]
Depository vs non-depository financial institutions?
Today's dumb question(s) from teaching monetary and financial institutions: 1. What is the difference between a "depository" and a "non-depository" financial institution? 2. Why is that difference economically important?
Teaching tariffs vs taxes in a small open economy
I taught my first year students the effects of an import tariff in a small open economy. I used the standard diagram (from Mankiw, Kneebone and McKenzie). It looks like this:
If banks bought houses
One more for the Banking School. This is a thought-experiment to help us clarify our thinking about banks. If banks bought houses, instead of lending people the money for people to buy houses, what would be different? Not much. But we students of money and banking would avoid some common mistakes, like confusing the demand […]
Worthwhile Canadian Initiative 
Recent Comments