Karl Seeley. Macroeconomics in. Ecological Springer

Transcription

1 Karl Seeley Macroeconomics in Ecological Springer

2 Contents Part I Building Blocks 1 The Economy in the World The History of Pasta The Economic Perspective Macroeconomics vs. Microeconomics What Is an Economy For? What Economics Actually Measures A Look Ahead Resources and Economic Processes Ecosystems and Resource Use Gradients Renewable vs. Exhaustible Resources Major lypes of Renewable Resources The Rational Use of Exhaustible Resources Technology and Resource Use Key Variables GDP Don't Double-Count GDP, Value Added, and Resources What GDP Isn't Resource Use Aggregate Energy Use Ecological Footprints 43 xi

3 xii Contents 3.3 Inflation Price Indexes J Applying a Price Index Calculating Inflation Unemployment 4^ 3.5 Interest Rates Real vs. Nominal Interest Foreign Affairs Interpreting the Balance of Payments Exchange Rates Exchange Rates and Interest Rates Exchange Rates and the Overall Investment Climate 58 Appendix: Price Indexes 59 Appendix: Real and Nominal Interest Rates 60 Appendix: Real Exchange Rates 61 Appendix: Data Links Part II The Long-Run Model 4 Labor, Resources, and the Production Function Overview The Production Function Diminishing Marginal Product Output, Value, and GDP Graphical Presentation Labor Demand Labor Supply Resource Markets Resource Supply Resource Use The Biosphere's Absorptive Capacity The Cobb-Douglas Function The Per-Worker Production Function 85 Appendix: Summary of Terminology 86 Appendix: Why Kl Why N1 Why A? Why Z? 87 Appendix: Treatment in Calculus and Algebra 87 Diminishing MPK and MPN 87 Constant Retums to Scale

4 Contents xiii 5 The Composition of Output Introduction Components of Aggregate Demand Consumption Investment Government Expenditure Net Exports Real Exchange Rates 98 Appendix: Summary of Terminology 99 Appendix: Unintended Investment 99 Appendix: Alternative Consumption Functions The Long Run Model (The Classical World) Overview Labor-Market Equilibrium Equilibrium Output Markets Work Well The Real Wage Will Adjust What's Made Is Sold What Changes Output Real-Nominal Divide Money and Prices Interest Rates Policy Implications The Problem of Recession Growth, the Long-Run Model, and Potential Output 122 Appendix: What Is "Nominal Output"? 123 Appendix: Taxes and the Effect on Wages Growth with Abundant Resources Introduction Capital and Investment Resources Labor Force Diminishing Returns to Capital Innovation Convergence Mechanics of Growth Institutions Diminishing MPK Revisited 134

5 xiv Contents 7.11 The Value of Growth 1^ Employment Political Stability The Functioning of the Money System Questioning the Value of Growth Conditional Equivalence ^7 Appendix: Growth and the Steady State I 39 Part III Business Cycles 8 A Natural History of Money * Introduction In the Animal Kingdom Coordinating Current Production Building the Future The Human Problem Non-monetary Means of Coordination Enter Money Taking on Credit What Money Is The Money Mystery The Physical Economy The Investment Project Gelting it Built Beyond Promises Money, Debt, Saving, Borrowing, Investment Magic Money Different Responses to Expenditure Physical Saving vs. Financial Savings Money as a Means, Not an End Flexible Saving and Output Computing Money Stories State Money Exchange Value and the Roles and Attributes of Money Exchange Value The Roles of Money The Attributes of Money 174 Appendix: Savings Without Obligation 176 Appendix: Gold and Silver

6 Contents xv 10 Banking Introduction Checking Transactions The Bank Balance Sheet Balancing Your Balance Sheet LoansTwoWays Reserves Illiquidity vs. Insolvency Tools for Credibility Bank Runs and Deposit Insurance Central Banks Lender of Last Resort Capital and Reserve Requirements Monetary Policy Fractional Reserve Banking Expenditure Multipliers Mills and Multipliers Multipliers Crowding Out Logical Limits to the Multiplier The Standard Keynesian Multipliers The Aggregate Expenditure Function Algebraic Treatment The Tax Multiplier Sanity Nominal vs. Real Monetary Policy The Aims of Monetary Policy Who Makes Monetary Policy The Money Supply Definitions of Money The Relationship Between the Money Supply and Economic Activity Tools for Influencing the Money Supply Open-Market Operations The Discount Rate Reserve Requirements Emergency Measures Quantitative Easing 229

7 12.6 Monetär? Targeting, Inflation Targeting, Taylor Rules, Nominal GDP Targeting 12.7 Conclusion Appendix: An Open-Market Operation Fiscal Policy 13.1 The Aims of Fiscal Policy 13.2 Mechanics of Fiscal Policy Automatic Stabilizers Active Fiscal Policy 13.3 Who Makes Fiscal Policy 13.4 Fiscal Policy, the Multiplier(s), and Timing 13.5 Conclusion Reference The IS and LM Curves 14.1 Overview of the IS-LM Model 14.2 Overview of the IS Curve 14.3 The Shape of the IS Curve Why Does it Slope Down What Makes it Steep or Fiat 14.4 What Moves the IS Curve 14.5 Algebraic Derivation of IS Curve 14.6 LM Overview 14.7 The Shape of the LM Curve Why Does it Slope Up What Determines the Steepness 14.8 What Moves the LM Curve 14.9 The Money-Supply Multiplier Appendix: The Meaning of "IS" and "LM" Policy and Shocks in the IS-LM World 15.1 Overview 15.2 Combining the Two Curves 15.3 Effect of Fiscal Policy 15.4 Effect of Monetary Policy 15.5 The Goal of Policy 15.6 When Fiscal Policy Is Ineffective 15.7 When Monetary Policy Is Ineffective 15.8 The Uses of the IS-LM Framework

8 Contents xvii Appendix I: The LM Curve and the Real Interest Rate 270 Appendix II: Algebraic Solution of IS-LM Short-Run Aggregate Supply/Aggregate Demand and Policy Overview Aggregate Demand the Standard Way Interest-Rate Targeting Aggregate Supply the Standard Way StickyWages Flexible Wages Sticky vs. Flexible "Fool Me Twice": Alternatives to the Standard Explanation Aggregate Supply as a Result of Spending Aggregate Demand as a Result of Decentralized Reactions to Inflation Combining AD and AS Demand Shifters Policy Effects The Lucas Critique Extending the Lucas Critique 290 Appendix: The Phillips Curve Policy Assessment Introduction Theory and the Anti-stimulus Charge Empirical Assessments of Stimulus Has Fiscal Policy Worked? Has Monetary Policy Worked? Conclusion Part IV Macroeconomics in a Constrained World 18 The Standard Model and Alternative Perspectives The Standard Model Exogenous Growth Keynesian Policy as Misguided, or Even a Trap Keynesian Policy as an Aid to Long-Run Growth Alternative Perspectives Real Business Cycle Theory Minsky's Unstable World The Prospect of Agent-Based Modeling 319

9 xviii 18.3 Heterodoxy in Perspective 19 Resource Constraints 19.1 What to Do with a Treasure Chest? The Hölching Rule The Hartwick Rule Hubbert Curves Hotelling Behavior with Endogenous Demand 19.2 EROI and Energy Cost 19.3 Limits on Absorptive Capacity 20 Growth Under Resource Constraints 20.1 Growth in the Resources Model Normal Growth Preindustrial Growth The "Discoveries" The "Discovery" 20.2 The Long-Run Impact of Resource Constraints 20.3 Paths Toward a Resource-Constrained Future Business as Usual Weak Foresight Strong Foresight 21 Business Cycles Under Resource Constraints 21.1 Recessions and Resources Conventional Recessions Resource-Driven Recession 21.2 Policy in a Resource-Driven Recession 22 Continuity and New Directions 22.1 Continuity and Difference The Long Run The Short Run Ecological Lucas, Ecological Keynesianism., 22.2 The Very Long View 22.3 New Directions