Macroeconomics. Unexpected changes in the money supply Essay

Macroeconomics. Unexpected changes in the money supply - Essay Example In that case, however, a monetary disturbance has large effects on relative prices and induces different responses of output in different sectors of the economy. Monetary shocks, in this way, may contribute to sectoral shifts in the economy. Nominal price sluggishness also affects the short-run response of the economy to real disturbances (e.g., to changes in technology), even in sectors of the economy with flexible prices. We begin with a simple flexible-price equilibrium model that we have also examined in Ohanian and Stockman (1994) and (in a two-country framework) in Stockman and Ohanian (1993). The model has two consumption goods, X and Y, and labour. We introduce money through a cash-in-advance constraint, intended to stand in for a more general transactions model of money. We assume, for simplicity, that there are complete asset markets. The representative household maximizes utility: each period. Equation (2) is a budget constraint for period t asset markets and is the cash-in-advance constraint which applies to period t product markets (which immediately follow period t asset markets as in Lucas [1982]). ... The terms x and y refer to consumption of goods X and Y, LX and Ly refer to labour hours producing goods X and Y, 0 is less than or equal to delta First, alpha is a parameter describing tastes. Because Alpha helps determine the equilibrium share of good X in total output, we will vary it in "The Size of the Sticky-Price Sector" subsection of Section 2 to discuss changes in the relative sizes of the X and Y industries. Next, p is the inverse of the intertemporal elasticity of substitution; an increase in p means households are less willing to trade current consumption for future consumption (that is, they are willing to pay more for a more constant consumption stream). The subsection "The Size of Intertemporal Substitution" explains how the size of p affects our results. Third, Sigma is the elasticity of substitution between goods X and Y; a larger sigma means the goods are better substitutes. The impact of the size of sigma on our results is the subject of the subsection "The Size of Intratemporal Substitution." Finally, delta determines the curvature of the production function, with

Functional Perspective on group Making Theory and Cultural approach to Research Paper

Functional Perspective on group Making Theory and Cultural approach to organization - Research Paper Example They have to begin by analyzing the problem they are facing and identifying its causes. There could be various problems and they have to be identified. The next step is to set specific goals that can be measured using various metrics. The board also has to identify some viable alternatives to enable the company achieve the goals they have set. Throughout the process, feedback has to be given on each of the steps and included in the next step to come up with an optimal solution. The theory is quite simplistic failing to take into account various environmental factors that affect the decisions made by the group. These factors could be internal or external to the group responsible for making the decision. Communication between the group members and with other entities outside of the group has a big role to play. The environment and circumstances surrounding the decision being made also have a great impact that the parties involved will feel. The GM board could face challenges from external environment such as legislations passed by congress on various matters affecting the motor vehicle industry. The company’s internal organization is an internal factor that affects the decisions made. The cultural approach to organizations was a theory put across by Clifford James Geertz. The theory is based on the main idea of organizations having their own unique cultures. This culture influences the meaning that the individuals pin on various things in their lives. Image, climate and character are the main factors that contribute towards the formation of a company’s corporate culture. The culture takes on an almost human perspective (Griffin 273). The theory mainly advocates for switching from systems approach to corporate culture to a more human approach. An example of application of the theory is in a bank. The employees of a specific bank have to keep the reputation that the bank is known for. One of the most important things in the industry is the quality of