The Classical Model - A Closed Economy in the Long Run & Market for Loanable Funds - Macroeconomics

I review the Long Run Model of a Closed Economy. Sometimes called "the aggregate model" or "the classical long run model" including the "market for loanable funds". This is almost always the first model you learn in an intermediate macroeconomics course. We'll start with a production function, (with factors like labor and capital), find wages via the marginal product of labor and find the real interest rate via the marginal product of capital. Also discussing some of the model's assumptions, the market for loanable funds, and equilibrium.
The video is aimed at an intermediate macroeconomics level.
Applications of the Model - Shocks to the Diagram!
• Change In Investment D... - A Change in Investment Demand
• Impact of Fiscal Contr... - A Fiscal Contraction
• Fiscal Expansion + Cla... - A Fiscal Expansion
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Long Run Model of a Closed Economy - aka "The Aggregate Model" or "The Classical Long Run Model"
- 3:57 - Production Function:
-- 4:10 - Factors, L and K and Technology.
-- 7:00 - Diminishing Marginal Returns.
-- 10:45 - Returns to Scale.
-- 13:25 - Assume capital and labor are constant, Y\bar,K\bar,& L\bar
- Supply side:
-- 14:00 Factor markets, for Labor and Capital.
-- Determine the equilibrium price and quantity of K and L.
-Demand side:
-- 19:45 - Determinants of C,I and G
- Equilibrium
-- 19:45 - Market for goods. (Supply and Demand get equilibrium price and quantity)
-- 22:40 - Market for loanable funds. (Savings and Investment equilibrate the real interest rate)
- Shocks:
• Change In Investment D... - A Change in Investment Demand
• Impact of Fiscal Contr... - A Fiscal Contraction
• Fiscal Expansion + Cla... - A Fiscal Expansion
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[@penips]

I'm actually in love with you....The lecturer at my university uses the same images you're using but explains them so poorly compared to you! You're the best!!!

[@economicurtis]

Phoenix "the same images you're using..." What do you mean? Do you think you can take a sceenshot/picture and send it my way? Feel free to email me [e-mail]

[@gogopopole]

@@economicurtis I have them in my current Macro book by Mankiw

[@cartilo2619]

Excellent lecture

[@boburkarimov8916]

thanks a lot it was useful

[@pastristdutou]

Excuse me could you tell me which program you are using to draw these linear graphs? Thanks a lot

[@economicurtis]

Tristan Pierson Any plot I drew was in MS work drawing and equation editor. Some of the plots are with an odd typeface I tend to avoid .... so I'm guessing I took it from a textbook. Actually, they look just too bad to be from a textbook, so they are probably a young me. All MS Word.