5 Recession, forecasting, and economic policy
Learning objectives
After reading this chapter, you will be able to:
- LO1 Describe the recession interval of the pandemic phase.
- LO2 Use the circular-flow model to explain the relationship between output and income.
- LO3 Discuss business cycles, focusing on the contractionary stage.
- LO4 Establish an aggregate supply-aggregate demand model to explain the recession.
- LO5 Incorporate a Keynesian framework for the analysis of market outcomes.
- LO6 Explain that a pandemic recession is unique because of the precipitating event.
- LO7 Analyze both fiscal and monetary policies as methods to stimulate aggregate demand.
- LO8 Discuss the challenge of macroeconomic forecasting during a pandemic.
