r1111 Posted May 2, 2014 Report Share Posted May 2, 2014 In the monetarist model long run economic growth is represented by a shift the three curves: AD, SRAS and LRAS. A good diagram of this is in the Tragakes Book on page 256. My question is why does AD increase if there is long run growth? Reply Link to post Share on other sites More sharing options...
ctrls Posted May 2, 2014 Report Share Posted May 2, 2014 My guess would be that they want to maintain the LR-equilibrium, so they shift all three.Though IMO it's easier and clearer just to draw the LRAS curve for showing long run growth. AD and SRAS aren't really relevant and it just adds extra complications. Reply Link to post Share on other sites More sharing options...
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