ECON 222 Lecture Notes - Lecture 11: Real Wages, Autarky
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ECON 222 Full Course Notes
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Chapter 12: keynesian business cycle analysis of non-market clearing macroeconomics: central idea: wages and prices are sticky or rigid and do not adjust quickly to their market-clearing levels. At w0/p1, firms want to hire more labour, increasing y. (wmpn) If realized p is p1, where p1>pe, real wage is lower than the market-clearing real wage: firms want to hire more labour, y increases. If realized p is p2, where p2
