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So what causes a gap?
In the Classical model, whenever the economy is in a “gap”, either contractionary or expansionary, a one-time adjustment in the price level will always quickly bring the economy back to a
full employment, stable price equilibrium.
So the question arises: If the economy is so stable on it’s own, how did it ever get into a contractionary or expansionary gap to begin with?
The answer involves “supply shocks”.