IAMA, Lecture #9 The Cagan model, hyperinflation, and the role of expectations in macroeconomics
Overview:
• Cagan model as a demonstration of the central role of expectations in macroeconomics
• How does inflation get started? The rise, fall and resurrection of the Phillips curve as an example of inductive economics
• Motivation of the central role of expectations and uncertainty in macroeconomics: The Lucas (1973) island model
• Preview of the rest of the course
by Prof. Burda
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