Macroeconomics. Unexpected changes in the money supply Essay

Macroeconomics. Unexpected changes in the money supply - Essay Example In that case, however, a monetary disturbance has large effects on relative prices and induces different responses of output in different sectors of the economy. Monetary shocks, in this way, may contribute to sectoral shifts in the economy. Nominal price sluggishness also affects the short-run response of the economy to real disturbances (e.g., to changes in technology), even in sectors of the economy with flexible prices. We begin with a simple flexible-price equilibrium model that we have also examined in Ohanian and Stockman (1994) and (in a two-country framework) in Stockman and Ohanian (1993). The model has two consumption goods, X and Y, and labour. We introduce money through a cash-in-advance constraint, intended to stand in for a more general transactions model of money. We assume, for simplicity, that there are complete asset markets. The representative household maximizes utility: each period. Equation (2) is a budget constraint for period t asset markets and is the cash-in-advance constraint which applies to period t product markets (which immediately follow period t asset markets as in Lucas [1982]). ... The terms x and y refer to consumption of goods X and Y, LX and Ly refer to labour hours producing goods X and Y, 0 is less than or equal to delta First, alpha is a parameter describing tastes. Because Alpha helps determine the equilibrium share of good X in total output, we will vary it in "The Size of the Sticky-Price Sector" subsection of Section 2 to discuss changes in the relative sizes of the X and Y industries. Next, p is the inverse of the intertemporal elasticity of substitution; an increase in p means households are less willing to trade current consumption for future consumption (that is, they are willing to pay more for a more constant consumption stream). The subsection "The Size of Intertemporal Substitution" explains how the size of p affects our results. Third, Sigma is the elasticity of substitution between goods X and Y; a larger sigma means the goods are better substitutes. The impact of the size of sigma on our results is the subject of the subsection "The Size of Intratemporal Substitution." Finally, delta determines the curvature of the production function, with

Article Summary Assignment Example | Topics and Well Written Essays - 500 words

Summary Assignment - Article Example The problem however is – how can the performance rating of employees be made accurate? It is hard to unanimously vouch for the accuracy of any one rating system. Rather than the actual accuracy of the rating system, as DeNisi (2011) argues, the perception of the employee as to the accuracy of the rating system is more important. The aim of performance management should be to motivate employees to change their behavior. Simply put, improved performance calls for behavioral changes on the part of the employees. If this is to occur, the employees need to see the need for the change, for this they need feedback and ratings. For this, the rating system needs to be transparent so that the employees perceive the accuracy of the performance ratings. This can be done by not only elaborating the rating mechanism to employees but also by giving them a chance to appeal or question the ratings. If employees trust the feedback and see that to achieve a certain goal, they need to change a be havior, they will do so. DeNisi (2011) argues that if employees can see how their behavior improves their performance at a higher level and how it will improve the performance of the firm itself, it will make it easier for them to change their behavior to improve individual as well as organizational performance. This article is of high relevance to organizational development. It scrutinizes every aspect of performance management and how it can be implemented to encourage performance improvement through employee engagement and behavioral changes. The article stresses on the importance of introducing a transparent rating and feedback system so employees know what behavioral changes are required and how these changes will affect their as well as their organization’s performance. Organizational leaders need to introduce a robust mechanism of performance management that goes beyond just training and coaching employees and