1<!DOCTYPE html> 2<html> 3<head> <title>Dynamic economics 4An online textbook with dynamic graphics for the introduction to economics</title> 5<meta charset='utf-8' /> 6<meta content='TeX4ht (http://www.tug.org/tex4ht/)' name='generator' /> 7<meta content='width=device-width,initial-scale=1' name='viewport' /> 8<link href='dynvwleng.css' type='text/css' rel='stylesheet' /> 9<meta content='dynvwleng.tex' name='src' /> 10
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13 14<link type='text/css' href='../protex/style.css' rel='stylesheet' /> 15</head><body> 16<p><img width='1' alt='' src='https://vg08.met.vgwort.de/na/ac8bfb254cff4060b2808f78a90a5da5' height='1' /></p> 17<div class='mainnavigation'><a href='https://dynamische-vwl.de/'><img src='../protex/images/logo.png' /></a> <a href='../../german/micro/'><img src='../protex/images/FlagDeu.png' /></a> <a href='../micro/'><img src='../protex/images/Micro.png' /></a> <a href='../macro/'><img src='../protex/images/Macro.png' /></a> <div class='tableofcontents'><div class='partToc'><a href='#Q1-1-1'>Start</a></div><div class='partToc'>IÂ Â <a id='QQ2-2-3' href='dynvwlengpa1.html#x2-2000I'>ISLM Modell</a></div><div class='partToc'>IIÂ Â <a id='QQ2-24-37' href='dynvwlengpa2.html#x24-36000II'>ASAD Modell</a></div><div class='partToc'>IIIÂ Â <a id='QQ2-29-57' href='dynvwlengpa3.html#x29-56000III'>Real Exchange Rates</a></div><div class='partToc'>IVÂ Â <a id='QQ2-37-65' href='dynvwlengpa4.html#x37-64000IV'>Monetary Modell</a></div><div class='partToc'>VÂ Â <a id='QQ2-49-77' href='dynvwlengpa5.html#x49-76000V'>Mundell-Fleming Modell</a></div></div></div><div class='textkoerper'> 18<a id='Q1-1-1'></a> 19 <div class='maketitle'> 20 21 22 23 24 25 26 27<h2 class='titleHead'>Dynamic economics<br /> 28An online textbook with dynamic graphics for 29the introduction to economics</h2> 30 <div class='author'><span class='ecrm-1440'>Prof. Dr. Christian Bauer</span></div><br /> 31<div class='date'><span class='ecrm-1440'>September 10, 2021</span></div> 32 </div>Chair of monetary economics (FB IV), Trier University, 54296 Trier 33<br class='newline' />Tel. 0651-2012744, [email protected] 34<p> Despite the ongoing development of the project, errors cannot be completely 35avoided. For legal reasons I have to point out that no guarantee or warranty 36whatsoever is given for the content and use. 37</p> 38<p> The following internet pages are the beginning of a long-term project. In this 39sense, they represent a publication. The use in teaching and instruction is 40explicitly permitted. I only ask for the adherence to the usual methods of 41citation. 42</p> 43<p> The graphics are constructed as follows: All points marked by a cross can be 44moved with the mouse. Not filled circles on a line can be controlled via 45sliders. The graphic adapts automatically to the change of a point. Points 46represented by filled circles cannot be moved directly, but adapt to the changing 47graphic. 48</p> 49<p> The names of variables and designations are not always consistent in the 50typically used literature. We therefore adapted common nomenclature from the 51standard literature. 52</p> 53<p> Should you notice any mistakes (e.g. dead or incorrect links, spelling mistakes 54or inaccuracies in content), I would be very grateful for a remark. I also welcome 55constructive criticism regarding the presentation and practicability of the pages 56and the comprehensibility of the explanations. Finally, I am also grateful for 57 58 59 60suggestions to expand the project. 61</p> 62<p> I would like to thank Horst Froeber and the company Macher Solutions for the 63creation of the web presence. The dynamic graphics are based on the free 64geometry software jsxgraph, which was developed at the Department of 65Mathematics and its Didactics by Prof. Baptist at the University of Bayreuth. I 66would like to thank especially the developers Apl. Prof. Dr. Alfred Wassermann, 67Dr. Matthias Ehmann and Dr. Carsten Miller for their support. I would also like 68to thank Michal Hoftich for help with the technical implementation with Latex 69and Mr. Janes Sass for numerous helpful comments and found mistakes. Special 70thanks go to Lexi Walter (LIRSWrite Publishing Services; editing and 71translation;
71 Contact: <a href='mailto:[email protected]'>[email protected]</a>) for translating all the contents into 72English. 73</p> 74<p> There are still some chapters and elements not translated, but we are working 75on it. 76 77 78 79 80 81 82 </p> 83 84 <h2 class='likechapterHead'><a id='x1-1000'></a>Contents</h2> 85 <div class='tableofcontents'> 86 <span class='partToc'><a href='#Q1-1-1'>Start</a></span> 87<br /> <span class='partToc'>IÂ Â <a href='dynvwlengpa1.html#x2-2000I'>ISLM Modell</a></span> 88<br /> <span class='chapterToc'>1 <a href='dynvwlengch1.html#x3-30001'>Money supply</a></span> 89<br /> <span class='chapterToc'>2 <a href='dynvwlengch2.html#x4-80002'>The goods market: The IS equation</a></span> 90<br /> Â <span class='sectionToc'>2.1 <a href='dynvwlengse1.html#x5-90002.1'>Derivation of the IS curve</a></span> 91<br /> Â <span class='sectionToc'>2.2 <a href='dynvwlengse2.html#x6-100002.2'>The shift of the IS curve in a closed economy</a></span> 92<br /> <span class='chapterToc'>3 <a href='dynvwlengch3.html#x7-110003'>The financial market: the LM curve</a></span> 93<br /> Â <span class='sectionToc'>3.1 <a href='dynvwlengse3.html#x8-120003.1'>Derivation of the LM curve</a></span> 94<br /> Â <span class='sectionToc'>3.2 <a href='dynvwlengse4.html#x9-130003.2'>The shift of the LM curve in a closed economy</a></span> 95<br /> <span class='chapterToc'>4 <a href='dynvwlengch4.html#x10-140004'>The effect of political decisions in equilibrium</a></span> 96<br /> Â <span class='sectionToc'>4.1 <a href='dynvwlengse5.html#x11-150004.1'>Fiscal policy</a></span> 97<br /> Â <span class='sectionToc'>4.2 <a href='dynvwlengse6.html#x12-160004.2'>Monetary policy</a></span> 98<br /> Â <span class='sectionToc'>4.3 <a href='dynvwlengse7.html#x13-170004.3'>The combined use of monetary and fiscal policy</a></span> 99<br /> <span class='chapterToc'>5 <a href='dynvwlengch5.html#x14-180005'>The ISLM model with expectations</a></span> 100<br /> Â <span class='sectionToc'>5.1 <a href='dynvwlengse8.html#x15-190005.1'>The IS curve with expectations</a></span> 101<br /> Â <span class='sectionToc'>5.2 <a href='dynvwlengse9.html#x16-200005.2'>Fiscal policy, monetary policy and the role of expectations 102and backloading</a></span> 103<br /> <span class='chapterToc'>6 <a href='dynvwlengch6.html#x17-240006'>The ISLM model in the open economy</a></span> 104<br /> Â <span class='sectionToc'>6.1 <a href='dynvwlengse10.html#x18-250006.1'>Demand for domestic goods vs. domestic demand: DD and ZZ curve</a></span> 105<br /> Â <span class='sectionToc'>6.2 <a href='dynvwlengse11.html#x19-260006.2'>Trade balance: net exports</a></span> 106<br /> Â <span class='sectionToc'>6.3 <a href='dynvwlengse12.html#x20-270006.3'>The IS curve in the open economy: real depreciation and trade balance</a></span> 107<br /> <span class='chapterToc'>7 <a href='dynvwlengch7.html#x21-280007'>Atypical monetary policy: liquidity trap and quantitative easing</a></span> 108<br /> Â <span class='sectionToc'>7.1 <a href='dynvwlengse13.html#x22-290007.1'>Liquidity trap</a></span> 109<br /> Â <span class='sectionToc'>7.2 <a href='dynvwlengse14.html#x23-320007.2'>Monetary policy in the crisis</a></span> 110<br /> <span class='partToc'>IIÂ Â <a href='dynvwlengpa2.html#x24-36000II'>ASAD Modell</a></span> 111<br /> <span class='chapterToc'>8 <a href='dynvwlengch8.html#x25-370008'>GA-GN-Model (AS-AD-Model): Introduction</a></span> 112<br /> <span class='chapterToc'>9 <a href='dynvwlengch9.html#x26-380009'>Gesamtwirtschaftliches Angebot GA (Aggregate Supply: AS)</a></span> 113<br /> <span class='chapterToc'>10 <a href='dynvwlengch10.html#x27-4400010'>Gesamtwirtschaftliche Nachfrage GN: (Aggregate Demand: AD)</a></span> 114<br /> <span class='chapterToc'>11 <a href='dynvwlengch11.html#x28-4900011'>The AS-AD model: shocks and economic policy reactions</a></span> 115<br /> <span class='partToc'>IIIÂ Â <a href='dynvwlengpa3.html#x29-56000III'>Real Exchange Rates</a></span> 116 117 118 119<br /> <span class='chapterToc'>12 <a href='dynvwlengch12.html#x30-5700012'>Theory of Purchasing Power Parity</a></span> 120<br /> Â <span class='sectionToc'>12.1 <a href='dynvwlengse15.html#x31-5800012.1'>Basic principles and preliminary remarks</a></span> 121<br /> Â Â <span class='subsectionToc'>12.1.1 <a href='dynvwlengsu1.html#x32-5900012.1.1'>Foreign exchange market and nominal exchange rate</a></span> 122<br /> Â Â <span class='subsectionToc'>12.1.2 <a href='dynvwlengsu2.html#x33-6000012.1.2'>Exchange rate policy</a></span> 123<br /> Â Â <span class='subsectionToc'>12.1.3 <a href='dynvwlengsu3.html#x34-6100012.1.3'>Real exchange rate</a></span> 124<br /> Â <span class='sectionToc'>12.2 <a href='dynvwlengse16.html#x35-6200012.2'>Purchasing Power Parity</a></span> 125<br /> Â <span class='sectionToc'>12.3 <a href='dynvwlengse17.html#x36-6300012.3'>The Harrod-Balassa-Samuelson model</a></span> 126<br /> <span class='partToc'>IVÂ Â <a href='dynvwlengpa4.html#x37-64000IV'>Monetary Modell</a></span> 127<br /> <span class='chapterToc'>13 <a href='dynvwlengch13.html#x38-6500013'>Basic Principles and Assumptions</a></span> 128<br /> <span class='chapterToc'>14 <a href='dynvwlengch14.html#x39-6600014'>Equilibrium</a></span> 129<br /> <span class='chapterToc'>15 <a href='dynvwlengch15.html#x40-6700015'>Graphical presentation of the equilibrium</a></span> 130<br /> <span class='chapterToc'>16 <a href='dynvwlengch16.html#x41-6800016'>Relation of two countries</a></span> 131<br /> <span class='chapterToc'>17 <a href='dynvwlengch17.html#x42-6900017'>Monetary policy measures within the Monetary Model</a></span> 132<br /> <span class='chapterToc'>18 <a href='dynvwlengch18.html#x43-7000018'>Inflation abroad</a></span> 133<br /> <span class='chapterToc'>19 <a href='dynvwlengch19.html#x44-7100019'>Exogenous economic growth shock</a></span> 134<br /> <span class='chapterToc'>20 <a href='dynvwlengch20.html#x45-7200020'>Fixed exchange rates in the Monetary Model</a></span> 135<br /> Â <span class='sectionToc'>20.1 <a href='dynvwlengse18.html#x46-7300020.1'>Monetary policy with fixed exchange rates</a></span> 136<br /> Â <span class='sectionToc'>20.2 <a href='dynvwlengse19.html#x47-7400020.2'>Recession with fixed exchange rates</a></span> 137<br /> Â <span class='sectionToc'>20.3 <a href='dynvwlengse20.html#x48-7500020.3'>
137Monetary policy of the anchor country: Imported inflation 138and "harmful" monetary policy</a></span> 139<br /> <span class='partToc'>VÂ Â <a href='dynvwlengpa5.html#x49-76000V'>Mundell-Fleming Modell</a></span> 140<br /> <span class='chapterToc'>21 <a href='dynvwlengch21.html#x50-7700021'>The Mundell-Fleming model</a></span> 141<br /> Â <span class='sectionToc'>21.1 <a href='dynvwlengse21.html#x51-7800021.1'>Basic principles and assumptions</a></span> 142<br /> Â Â <span class='subsectionToc'>21.1.1 <a href='dynvwlengsu4.html#x52-8100021.1.1'>The Mundell-Fleming model</a></span> 143<br /> Â <span class='sectionToc'>21.2 <a href='dynvwlengse22.html#x53-8200021.2'>The equilibrium and its graphical presentation</a></span> 144<br /> Â Â <span class='subsectionToc'>21.2.1 <a href='dynvwlengsu5.html#x54-8300021.2.1'>The four-field-graphic</a></span> 145<br /> Â <span class='sectionToc'>21.3 <a href='dynvwlengse23.html#x55-8400021.3'>Flexible exchange rates in the Mundell-Fleming model</a></span> 146<br /> Â Â <span class='subsectionToc'>21.3.1 <a href='dynvwlengsu6.html#x56-8500021.3.1'>Monetary policy measures in the Mundell-Fleming model</a></span> 147<br /> Â Â <span class='subsectionToc'>21.3.2 <a href='dynvwlengsu7.html#x57-8600021.3.2'>Fiscal policy</a></span> 148<br /> Â <span class='sectionToc'>21.4 <a href='dynvwlengse24.html#x58-8700021.4'>Fixed exchange rates in the Mundell-Fleming model</a></span> 149<br /> Â Â <span class='subsectionToc'>21.4.1 <a href='dynvwlengsu8.html#x59-8800021.4.1'>Monetary policy at fixed exchange rates</a></span> 150<br /> Â Â <span class='subsectionToc'>21.4.2 <a href='dynvwlengsu9.html#x60-8900021.4.2'>Fiscal policy with fixed exchange rates</a></span> 151 </div> 152 153 154 155<p> 156 157 158 159</p> 160<p> 161 162 163 164 </p> 165 166 167 168 169 170 171 172<p> 173 174 175 176</p> 177<p> 178 179 180 181 </p> 182 183 184 185 186 187 188 189<p> 190 191 192 193</p> 194<p> 195 196 197 198 </p> 199 200 201 202 203 204 205 206<p> 207 208 209 210</p> 211<p> 212 213 214 215 </p> 216 217 218 219 220 221 222 223<p> 224 225 226 227 </p> 228 229<p><span class='next'>[<a id='taildynvwleng' href='dynvwlengpa1.html'>next</a>]</span></p> 230<div id='fusszeile'><hr />(c) by Christian Bauer<br class='newline' />Prof. Dr. Christian Bauer<br class='newline' />Chair of monetary economics<br class='newline' />Trier University<br class='newline' />D-54296 Trier<br class='newline' />Tel.: +49 (0)651/201-2743<br class='newline' />E-mail: [email protected]<br class='newline' />URL: <a href='https://www.cbauer.de' class='url'><span class='ectt-1200'>https://www.cbauer.de</span></a></div></div> 231</body> 232</html>
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