Module 4

The exercise was created 2020-01-15 by douglasrudin. Question count: 21.




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  • Fertility of research How R&D translate to new profitable goods and services
  • Approbability of research To what extent can firms profit from a research (R&D)
  • Institations Solid legal-system that solve patent disagreements, intellectual property etc
  • Baumol´s disease The rise in salary in jobs that hav experienced no/low increase in productivity, compared to the rise in salary in jobs that have experienced an increase in productivity
  • How to stimulate R&D Low corruption, Institations, Solid financial systems
  • Sources of growth Capital accumulation and/or technological progress under balanced growth
  • I/Y Required investment rate of GDP in percentage
  • Churning New techniques of production require new skills, making some old skills less useful
  • sheepskin effect Even if you end up learning most at work, getting a degree shows comitment
  • Factor of equilization theorem (Wage inequality) Low skill jobs move to low income countries
  • Baumol´s disease 2 Productivity increases are harder to make in service/cultural sectors, so wages in those will tend to stagnate
  • AN in ekvation effective labour
  • Current exchange rate depends on.. Domestic interest rates now and in the future, foreign interest rates now and in the future, and future exchange rates
  • How does real exchange rate change Through a change in wether E or P/P*
  • Deficit formula r * Bt-1 + Gt - Tt
  • DC: 1 stage. Large devaluation The nominal exchange rate is fixed at a new and lower level than previously -> real depreciation, real exchange rate decreases
  • DC: 2 stage. Recovery Competitive in increasing, Exports are growing, Increasing profits, Increase in industrial production, Increase in domestic real income
  • DC: 3 stage. Over heating Growth is maintained by the domestic part of economy because of high wages, growing domestic demand and improved budget balance
  • DC: 4 stage, cost crisis Decline in the industry, falling profits, decreasing employment, falling investment
  • DC Devaluation cycle
  • IS - relation Y= Y(ep/p*, G, T, i* - expected domestic inflation, Y*

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