INTRODUCTION

The critique of demand management policies
Adding aggregate supply to the macroeconomic model
A look at supply and demand factors in the stagflationary era
Related studies
Plan of the book

ELEMENTS OF A THEORY

Factor prices and production response
Savings, investment, and international capital flows
Supply shocks and demand management
Real wage gaps and the characterization of unemployment trade-offs
Policy coordination among countries

PRODUCTION, TECHNOLOGY, AND THE FACTOR PRICE FRONTIER

The production function
The factor price frontier
Material inputs and the analogy of productivity change
The FPF in the three-factor case
Change in terms of trade and demand rationing
Appendix 2A: Empirical factor-price profiles in manufacturing
Appendix 2B: Product measurement

FACTOR ADJUSTMENT TO SUPPLY PRICE SHOCKS

Analysis in terms of the factor price frontier
Changes in labor demand and output supply
Analysis in terms of the two-level CES function
Some simple dynamics
Appendix 3A: General derivation of input demand and output supply functions

SAVINGS, INVESTMENT, AND CAPITAL FLOWS

Production, investment, and the balance of payments
Firm behavior
Household consumption and savings behavior
Temporary and permanent input price shocks
Welfare analysis
Wages, prices, and monetary policy
Determination of the real interest rate in a multicountry world
The differential response of ICs and MICs

STAGFLATION AND SHORT-RUN ADJUSTMENT

The commodity market
The labor market
General equilibrium
Appendix 5A: The detailed model

MACROECONOMIC ADJUSTMENT AND POLICY COORDINATION IN A GLOBAL SETTING

A "world" model with one N-importing region
A world model with two oil-importing economies
The role for policy coordination after a supply shock
Conclusions
Appendix 6A: The detailed models

SIMULATION MODELS

The semitradable model in an infinite horizon
The one-country disequilibrium model
Appendix 7A: Notation used in this chapter

EMPIRICAL OVERVIEW OF STAGFLATION IN THE OECD

Supply and demand factors in the stagflation
Sorting out the roles of supply and demand variables
Summary and conclusions

REAL WAGES AND UNEMPLOYMENT

Measurement of the wage gap
The wage gap and unemployment
The dynamics of the wage gap
Some theoretical explanations of slow wage adjustment

PRICE AND OUTPUT DYNAMICS IN EIGHT ECONOMIES

Inflation equations for the 1970s
Unemployment equations for the 1970s
Conclusions

LABOR MARKETS AND COMPARATIVE MACROECONOMIC PERFORMANCE

Measuring macroeconomic performance
An international comparison of wage-setting institutions
Conclusions
Appendix 11A: Wage-setting institutions for twelve countries

SUPPLY SHOCKS, DEMAND RESPONSE, AND THE PRODUCTIVITY PUZZLE

Input substitution, demand, and the productivity slowdown
Value-added measures of productivity growth and resource utilization
Explaining the links of unemployment and trend productivity growth
Comparing OECD and the MICs

LESSONS FOR THEORY AND POLICY

NOTES
BIBLIOGRAPHY
INDEX