An Economical Business-Cycle Model: AD-AS Diagrams

This repository contains the AD-AS diagrams from the paper "An Economical Business-Cycle Model", written by Pascal Michaillat and Emmanuel Saez, and published in Oxford Economic Papers in April 2022.

Paper webpage

The paper is available at https://pascalmichaillat.org/7/. The AD-AS diagrams appear in figures 2–8.

Diagrams

The AD-AS diagrams are drawn by hand using Keynote and exported to PDF:

• figure2.key, figure2.pdf - Figure 2: Solution of the model
• figure3.key, figure3.pdf - Figure 3: Response to a negative AD shock
• figure4.key, figure4.pdf - Figure 4: Response to a negative AS shock
• figure5.key, figure5.pdf - Figure 5: Response to a decrease in nominal interest rate
• figure6.key, figure6.pdf - Figure 6: Response to an increase in wealth tax rate
• figure7.key, figure7.pdf - Figure 7: Optimal monetary policy restores efficient unemployment when the unemployment gap is small
• figure8.key, figure8.pdf - Figure 8: Optimal monetary policy reaches the zero lower bound when the unemployment gap is large

License

This repository is licensed under the Creative Commons Attribution 4.0 International License.