The Simple Dynamic Macroeconomic Model

The Dynamic Model Without Money

Here we put together all the microeconomic foundations of macroeconomic model to build the Output Demand and Output Supply Curves. In this model, the Output Supply curve is simply the relationship between the amount of output produced by the workforce for a given interest rate. The Output Demand Curve is the sum of Consumption, Investment by firms and Government Spending (which is exogenous).

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