top of page

The algebra behind computing core macro variables in a short-run equilibrium.

Part I calculating the equilibrium output gap.


This video reviews shows how to calcualte the output gap -- including how each of the macroeconomic shocks contributes to the output gap.

Part II calculating interest rates and the inflation rate.


This video extends the algebra to calculate the interest rate (real and nominal) and the inflation rate.

Part III calculating core variables -- an example.


This video presents an example of the calculations detailed in the previous two videos.

Spreadsheet-based models -- below.

bottom of page