清大經濟系朱筱蕾老師課程講義 2505

AD-AS Model and Government Policy

請閱讀 Mankiw Ch34 and 35, 10e.

I. Aggregate Demand and Aggregate Supply (AD-AS) model

(1) The long-run equilibrium, PE and YN.

在“⻓期”⾥，产出的决定因素是经济的真实要素——“劳动⼒数量
与质量、资本存量、⾃然资源、技术⽔平”等，⽽与物价⽔平⽆
关。⽆论物价怎么变，⻓期⾥经济的潜在产出不受影响。

YN is determined by the economy’s stocks of labor, capital, and natural resources, and
on the level of technology. Changing P does not affect YN (Classical dichotomy and
Monetary neutrality hold). YN is also the potential output, an estimate of what an
economy could feasibly produce when it fully employs its available economic resources.
The unemployment rate at YN is the natural unemployment rate UN. YN and UN need to
be estimated using econometric methods. Please read the textbook about LRAS
shifting.

(2) The short-run equilibrium, P1 and Y1.

AD represents YD, YD = C + I + G + NX.

AS represents YS, YS = YN + a (P – PE), a > 0.

(3) Business cycle (景氣循環).

At the long-run equilibrium, long-run equilibrium = short-run equilibrium. However, at

any given time, there might be a difference between actual output (Y) and potential
output (YN, the trend of output). 1 The short-run fluctuations of actual output around
potential output display the business cycle (景氣循環).

Stages of the Business Cycle

Recessions: Periods of falling real incomes and rising unemployment

Depressions: Severe recessions (very rare)
Economic fluctuations are irregular and unpredictable. Most macroeconomic quantities
fluctuate together, for example, unemployment rises as output falls.

1
The difference is the “output gap”.
(4) The aggregate-demand (AD) curve is downward-sloping. (P↑and Y↓)

Suppose P declines. Three effects result in a higher quantity demanded for Y.

(a) The Wealth Effect (emphasizes P and C). People have higher purchasing power;
therefore, spend more on consumption (C).
(b) The Interest-Rate Effect (emphasizes P and I). People can save more; therefore,
purchase more bonds and other assets, resulting in a decrease in the interest rate. A
lower interest rate stimulates more investment (I).
(c) The Exchange-Rate Effect (emphasizes P and NX). A lower interest rate makes
domestic currency depreciate. Thus, stimulate NX to rise.

Any event that changes C, I, G, or NX (except a change in P) will shift the AD curve.
Please read the textbook about AD shifting.

(5) The aggregate-supply (AS) curve is upward-sloping.

Three theories explain.

(a) The Sticky-Wage Theory. Nominal wages (W) have been set in advance based on
PE, and are sticky (僵固) in the short run, they adjust sluggishly. Once P > PE leads
to W/P < W/ PE, hiring more workers to raise production becomes profitable. So,
firms increase output and employment.

(b) The Sticky-Price Theory. Firms set sell prices (Ps) in advance based on PE, and these
prices are sticky (changing price fully or partially is costly). Once P > PE, products
with sticky prices become cheaper, i.e., Ps /P < Ps / PE, and stimulate a higher
quantity demanded. 2

(c) The Misperceptions Theory. When P rises above PE, firms see their sell prices rise
before realizing all prices are rising and assume the relative price of their products
also rise. These firms thus increase output and employment.

2
Firms will produce more to meet demand since it’s the profit-maximization strategy.
 According to the three theories, Y deviates from YN when P deviates from PE, and

Y = YN + a (P – PE), a > 0. Please read the textbook about AS shifting.

(6) Shifting AD using monetary policy

As interest rate (r) rises, the opportunity cost of holding money also rises. Thus, people
choose to keep less money at hand. Thus, money demand (MD) is downward sloping.

Fed decreases the money supply, MS1 shifts to MS2. Thus, the interest rate rises to r2
from r1. Households and firms respond to the higher interest rate: reduce spending and
investment. Thus, AD1 shifts to AD2.

An increase in money supply can shift AD right. However, AD might not shift if a
liquidity trap occurs. That is, when interest rates are very low (for example, reach the
zero lower bound), yet consumers prefer to hoard cash rather than spend or invest their
money in higher-yielding bonds or other investments.

1. 流动性陷阱背景下，传统“再降息、再投放基础货币”⽆法再压低名义利率，市场利率贴近零后，新增货币只会被囤在“抽屉⾥”或“银⾏准备⾦”中，⽆法进入实体经济。

2. 前瞻指引的核⼼是“改变市场对未来利率和通胀的预期”，使得⼤家相信“低利率要持续很久→通胀要升→实际利率要降→借贷要划算→愿意投资和消费→AD 右移”。

3. 量化宽松的核⼼是“直接购买更⻓期或更多样化的⾦融资产”，压低⻓期债券利率、提⾼市场流动性、制造资产和财富效应，让投资者把钱投向实业或⾼⻛险资产，带动投资与消费 → AD 右移。

4. 这两者往往是互补的：先⽤前瞻指引试图“唤醒预期”，再⽤ QE 真⾦⽩银“打出实际效果”，共同帮助摆脱流动性陷阱、实现经济复苏。
Once liquidity traps occur, central banks may expand the economy (shift AD right) by
other policy tools, for example,

(a) Forward guidance (前瞻性指引): raising inflation expectations by committing

exceptionally low interest rates
(b) Quantitative easing (量化寬鬆): buying a larger variety of financial instruments
(mortgages, corporate debt, and longer-term government bonds)

(7) Fiscal Policy and AD

A tax cut increases households’ take-home pay. Households respond by spending a

portion of this extra income, shifting AD to the right. An increase in G directly raises
AD. Thus, an increase in G (more government spending) and/or decrease in T (tax cut),
shifts AD right; a decrease in G and/or increase in T, shifts AD left.

There exist multiplier effect(乘數效果) and crowding-out effect(排擠效果).

(a) Multiplier effect causes an additional shift in AD that result when expansionary
fiscal policy increases income and thereby increases consumer spending.

A $2b increase in G initially shifts AD to the right by $2b. The increase in Y causes C
to rise, which shifts AD further to the right. For example, if MPC = 0.8 and income
rises $100, C rises $80. From AD2 to AD3 indicates the Multiplier effect, where 1/(1-
MPC) is the multiplier.
(b) Crowding-out effects occur when expansionary fiscal policy raises the interest
rate, thereby reducing investment spending.

A $2b increase in G initially shifts AD right by $2b to AD2. But higher Y increases MD
and r, which reduces AD. At the end, AD moves to AD3. From AD2 to AD3 indicates
the crowding-out effect.

(8) Fiscal policy and AS

A cut in the tax rate gives workers an incentive to work more, so it might increase the
quantity of goods and services supplied and shift AS right. People who believe this
effect is large are called “Supply-siders”.

G might also affect aggregate supply. For example, the government increases spending
on roads. Better roads may increase business productivity, which increases the quantity
of goods and services supplied, shifts AS to the right. This effect might be more relevant
in the long run since it takes time to build the new roads and put them into use.

II. Analyzing Economic Fluctuations and LR growth

(1) The effects of SRAS.

1. SRAS increases production costs, and SRAS shifts from SRAS1 to SRAS2.

2. Short-run equilibrium shifts from A to B. Price rises and output declines, resulting in
a stagflation(停滯性通貨膨脹). Stagflation is an economic condition characterized by
slowing economic growth, high unemployment, and rising prices (inflation)
simultaneously.

3. Suppose policymakers do nothing. Low employment causes wages to fall, SRAS2

shifts right, and SR equilibrium moves from B toward LR equilibrium A.

4. Suppose policymakers use fiscal or monetary policy to increase AD and

accommodate the AS shift.

Policy makes AD1 shift to AD2, and Y2 back to YN. SR equilibrium moves from B
toward LR equilibrium C. Price becomes permanently higher at P3.

(2) Inflation rate and economic growth

Over the long run, technological progress shifts LRAS (and AS) to the right, resulting
in price declining and output rising.
However, given that the central bank successfully keeps inflation rate around 2%,
growth in the money supply shifts AD to the right. Since AD shifts more to the right
than AS, we observe ongoing inflation and growth in output.

(3) Expansionary and Contractionary Policies

Monetary and fiscal policies can affect AD. If the economy is suffering from a recession
with Y < YN, expansionary monetary policy with a higher money supply and a lower
policy (interest) rate can help the economy return to potential GDP. If high inflation rate
and employment prevail along with Y < YN, endangering inflation expectation and labor
market stability, contractionary monetary policy with a smaller money supply and a
higher policy rate can help the economy move toward its potential GDP.

Similarly, expansionary fiscal policy with a higher G and/or lower T, contractionary

fiscal policy with a lower G and/or higher T can also restore LR equilibrium.
(4) For and Against Active Stabilization Policy

Economic fluctuations are destabilizing to businesses, workers, consumers. Thus,

governments should use policies to reduce these fluctuations.

Monetary and fiscal policies affect the economy with a long time-lag. Thus, policies
may destabilize the economy rather than help it. Policymakers should focus on long-
run goals like economic growth and low inflation.

(5) Automatic Stabilizers

Automatic stabilizers are the instruments that adjust fiscal policy to stimulate aggregate
demand when the economy goes into recession, without policymakers having to take
any deliberate action. For example,

(a) tax system: in recession, taxes fall automatically, which stimulates aggregate
demand.
(b) government spending: in recession more people apply for public assistance (welfare,
unemployment insurance). As government spending on these programs
automatically rises, aggregate demand also increases.
⼀、什么是“精緻型通膨”？

1. 定义要点

• “精緻” ≠ “整体⾼通胀”：与那种典型的“辣椒、猪⾁、蔬菜、油、电、煤……全都涨得⻜快”的⼴泛涨价不同，
精緻型通胀指的是：

1. 总体（headline）CPI 或 CPI-U（未去掉食品和能源）的年增率看起来并不⾼，有时甚⾄低于 2% 或趋于平稳；

2. 但仔细拆解，会发现少数⼏个关键品类（比如房租、医疗、教育、⾦融服务、某些⾼端商品或特定原料）却在悄
然⼤涨，甚⾄出现两位数涨幅。

• 可以理解成“价格上涨的压⼒⾼度集中在某些“⼩众”““附加值⾼”““必需性强”的商品/服务上，⽽这些关键领域的

涨幅⼜并未完全被传统CPI权重充分反映，导致整体CPI看似温和、但实际⽣活成本或企业⽣产成本在特定环节却涨得很

厉害”。

2. 与“总体通胀”或“核⼼通胀” 的区别

• 总体通胀（Headline CPI）：将各种消费品（食品、能源、住房、交通、娱乐、医疗、教育等）按照既定权重加

权计算，反映“典型都市家庭”所有⽀出项的总平均涨幅。若“精緻型通膨”爆发的领域在权重上偏低，或者其涨幅被⼤宗
商品价格、能源价格下跌抵消，那么“整体CPI”就可能仍然维持在“低通胀”区域。

• 核⼼通胀（Core CPI）：为了剔除食品和能源这种“价格波动剧烈”的项⽬，常常把它们剔除后计算出的通胀率。
如果“精緻型通胀”主要出现在房租、医疗、教育、⾦融服务等“非食品、非能源”的品类⾥，那么它会更多地体现为“核
⼼CPI⼀路走⾼”，⽽“Headline CPI”上看可能并不明显。

• 但即便在“核⼼通胀”⾥，也不⼀定能完整捕捉到所有“精緻型涨价”，因为每个国家/地区在统计时，⽤于衡量“⾦
融服务、医疗、教育、通讯”这些品类的权重和采样可能并没有及时跟上新兴⽹络服务、平台经济带来的价格变化。

3. 典型表现形式
• 住房和房租：房价飙升、租⾦上涨，尤其在⼀线城市和热⻔学区周边非常明显。

• 医疗保健：挂号费、药品费、住院费、⼿术费等也不断上涨。
• 教育培训：课外补习、线上教育服务、语⾔培训等价格不断飙⾼。
• 通讯与数字服务：部分“⾼端宽带”“云服务器”“⾼阶订阅服务”等供给相对有限，价格相对其他品类涨得更快。

• ⾦融服务：尤其是⾦融中介费、理财服务费、信⽤卡分期利息、⼀部分⾦融衍⽣⼯具的管理费/交易费，也在增
⻓。
• 某些必需但供给链受挤压的“进⼝原材料”：虽然整篮⼦⼤宗商品价格可能回落，但某些⼩众⾼附加值材料（如半
导体芯片专⽤化学品）的涨幅很⼤，传导到终端消费时变成“精緻型暴涨”。