Macroeconomics

Worker-misperception model:

The model 

of aggregate supply emphasizing that workers 

sometimes perceive incorrectly the overall level of

prices.

World interest rate:

The interest rate prevailing in

world financial markets.

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585

index

Note: Page numbers followed by f indi-

cate figures; those followed by n indi-

cate notes; those followed by t indicate

tables.

Abel, Andrew B., 231n

Account, money as unit of, 80–81

Accounting profit, 55

Accounting scandals, 320

Acemoglu, Daron, 235

AD. See Aggregate demand (AD)

Adaptive expectations, 390–391

AD-AS model and, 413

AD-AS model, 409–440

adaptive expectations and, 413

dynamic aggregate demand curve

and, 420–421, 421f

dynamic aggregate supply curve and,

418–419, 419f

long-run equilibrium and, 418

long-run growth and, 423f, 423–424

monetary policy and, 429–432, 430f,

431f, 432–438

monetary-policy rule and, 414–415

numerical simulations of, 425

output in, 410–411

Phillips curve and, 412–413

real interest rate in, 411–412

shift in monetary policy and,

429–432, 430f, 431f

shocks to aggregate demand and,

427–428, 428f, 429f

shocks to aggregate supply and, 424f,

424–427, 426f

short-run equilibrium and, 422f,

422–423

solving, 417t, 417–423

Taylor principle and, 436–437, 437f

Taylor rule and, 415–416, 416f

tradeoff between output variability

and inflation variability and,

432–435, 433f

Adverse selection, 174

Africa. See also specific countries

settlement of, 235

Aggregate demand (AD), 269–271

amount of goods and services pro-

duced and, 568

downward sloping curve, 270

IS–LM model and. See IS–LM model

model of aggregate supply and aggre-

gate demand and, 268–269

quantity equation as, 269, 270f

shifts in, 270–271, 271f, 288, 288f

shocks to, 278, 279f, 279–280,

427–428, 428f, 429f

Aggregate supply (AS), 271–277,

380–387

dynamic curve, 418–419, 419f

imperfect-information model and,

383–384

implications of model, 386f,

386–387, 387f

international differences in curve,

385–386

long-run, vertical curve, 272f,

272–273, 273f

model of aggregate supply and aggre-

gate demand and, 268–269

shocks to, 278, 280–281, 281f, 424f,

424–427, 426f

short-run, horizontal curve, 272,

273–275, 274f

sticky-price model and, 381–383

Aghion, Philippe, 243

Akerlof, George A., 14, 106n

Alesina, Alberto, 185, 186n, 459n

American Revolution, seigniorage and,

93–94

Ando, Albert, 509, 513n

Angeletos, George-Marios, 520n

Angell, Norman, 83n

Animal spirits, 318

Annuities, 513

Appreciation (of currency), 136

Argentina

Big Mac price and exchange rate in,

148t

inflation and money growth in, 92f

investment rate in, 202f