price setting and wage setting

[AJ]

but u only said.. "if u r assuming that there is a positive markup then u r giving up the assumption of a competitive setup" ....

[AJ]

Waise leave it, U study, I vl go through blachard again! I badly need to brush up things! :(

[anon_econ]

i am assuming a positive markup, and i am assuming away the competitive setup! temme something, hv u done this stuff frm blanchard?

[anon_econ]

yea see pgs 128 n 129. n u r right; unless v revise stuff right now things wont work out

[aditi5000]

Oh god i'm sorry for creating such a ruckus with this question.. don't worry AJ and Vasudha your concepts are solid :)  at least you know what wage setting and price setting is - i learned it today because of the question :P relax... :)

[AJ]

Ya, I did it from blanchard only.. :p that's why m more concerned about our different opinions..!! :( bunk it, I always mix up everything from this Aggregate Supply part! I vl just see the book again and if still confusion continues, I vl bother you! :)

[AJ]

Well, we learn every day.. :p
Ya, our concepts are solid and yet give different results! :(

Chalo then, study hard! Good luck! :)

[AJ]

@aditi

I thought you are from economics background!

[aditi5000]

good luck to you too :) yep i'm from an economics background but not DU so we didn't cover all this in college! i had to study it on my own so a bit fuzzy on some details! :P

[AJ]

Ohhh...ohkay! Still better condition than mine though.. :p

[aditi5000]

I would never have guessed that you're from a non-economics background AJ :)

[AJ]

haha.. :D I am absolutely flattered! :p  :)
Good luck for preps aditi. :)

[aditi5000]

good luck to you too!! :)

[tim]

suppose the following eqn holds for an ecoy, at every time t :
Pt=(1+a)WtNt/Yt
that is the pricce of  output  is  a fixed markup over the unit labor cost. let pe be the inflation rate  and, lamda be the rate of growth in laboor productivity. (labor  productivity = Yt/Nt). which of the following is true ?
1. w=pi - lamda
2. pi=w + lamda
3. pi=w - lamda
4. w= lamda - pi

[anon_econ]

Hi tim. Take Y=AN. Then A grows at the rate of lamda. Now P=(1+a)W/A. Rate of growth of P= rate of growth of W-lamda. So it should be option 3.

[tim]

hey i dint get one thing where is pi ? and what is small a in this ?

[tim]

oh i think i got it...i did by taking log afta this ... hope i m thinkin on d ryt track...??? !!

[anon_econ]

yes. u hv to take log to arrive at the rates of growth.

[tim]

thnx a lot vasudha :)