"Aggregate demand" refers to the total amount of goods and services that people, businesses, and the government want to buy in a particular economy. It represents the combined demand for everything produced in an economy, including consumer spending, business investment, government spending, and net exports.
Full definition
Thus, increases
in aggregate demand for all housing types are equivalent with increases in the area's number of households.
Identifying locations with potential for increases in housing demand within an urban area, requires an understanding of how
aggregate demand for specific types of property is distributed across competing locations.
But the effect of the higher prices, assuming they are typically paid to suppliers elsewhere in the world, also acts somewhat like a tax on spending, hence
aggregate demand falls.
Since the higher resource prices are paid to suppliers elsewhere in the world, this also acts somewhat like a tax on spending,
hence aggregate demand falls.
This can boost
aggregate demand further, through increased export sales or, more simply, because existing export sales produce more revenue measured in domestic currency.
We also control for the fraction of the population that is of school age, which
captures aggregate demand for educational services.
Collaboration can bring efficiencies and help
communicate aggregated demand for products that can help drive availability of these products in the market.
In turn, developments
in aggregate demand, in conjunction with developments in aggregate supply, influence the level of inflation in the economy.
There are two factors at play here: the sluggish growth rate
of aggregate demand abroad and the continuing impact of earlier dollar appreciation on U.S. export competitiveness.
One way to interpret this figure is that the Treasury market was expecting
weaker aggregate demand growth in the future and consequently lower inflation.
Weak residential construction has also weighed
on aggregate demand over the first half of this year, although building approvals and liaison reports point to some stabilisation in the period ahead (Graph 5).
Answer the phone Mr. Flaherty the Governor would probably like more than a «bare - bones» budget in 2014 to deal with
inadequate aggregate demand, excess supply, high unemployment.
Third, the Fed seems to be in the thrall of notions that might be right but do not to my knowledge have analytic support premised on the idea that the rate of change of interest rates as distinct from their level
influences aggregate demand.
This puzzle generated a flurry of research and several Nobel prizes, and one of the things that came out is that
increasing aggregate demand (expansionary fiscal policy and or expansionary monetary policy) will not offset a negative productivity shock.
And whatever its uses in cases of
insufficient aggregate demand, as the economist Stephen Gordon has lately reminded us, it is wholly inappropriate to invoke it against what is in reality a shock to aggregate supply: the sudden drop in the price of oil has taken a sizable bite out of Canada's productive capacity, just as the equally sudden spike in the price of oil did to the United States» economy in the 1970s.
Unfortunately, Mr. Flaherty is simply not prepared to do what is necessary to
raise aggregate demand in the economy.
Imagine a US default, where
aggregate demand drops across the world because the Treasuries in the banks of other nations are only worth 70 % of face value.
If, in fact, an increase in the minimum wage were to result in a net increase in nominal aggregate spending, then we could eliminate any shortfall in
aggregate demand relative to aggregate supply by merely boosting the minimum wage to whatever level necessary to eliminate the gap.
In a credit - driven economy like ours, measuring the differences between various types of credit creation can give signals as to how the banks are faring, and how
well aggregate demand will do in the intermediate term.
In the short run (months to perhaps several years), drops in consumption remove
aggregate demand from the economy and affect the length and depth of recessions.
These two segments of
aggregate demand reinforce each other because buying a house or an apartment triggers spending on consumer durable goods («big ticket» items) such as furniture, appliances and even automobiles because relocations typically change commuting patterns and lifestyles.
Although I am all in favor of stimulating
aggregate demand if it is demonstrably below potential aggregate supply, it is not entirely clear to me how increasing government transfer payments will accomplish this.
We believe the Fed became so focused on shoring up the financial system and worrying about rising inflation, that it lost sight of
stabilizing aggregate demand.
In addition, we think the Fed has been equally clear that an inflationary fiscal package — particularly one that stimulates
aggregate demand without also enhancing productivity — could prompt more aggressive monetary tightening.
The next most implicated is the macroeconomic regulatory system, governing the management of
aggregate demand through fiscal and monetary policy to control inflation and unemployment.
When aggregate demand in the economy is weak, for example, inflationary pressures are likely to be diminishing and monetary policy can be eased, which will give a short - term stimulus to economic activity.
If we assume that hysteresis is in fact present to some degree after deep recessions, the natural next question is to ask whether it might be possible to reverse these adverse supply - side effects by temporarily running a «high - pressure economy,» with
robust aggregate demand and a tight labor market.
Niskanen sees the primary duty of the Fed as maintaining «a steady increase in
aggregate demand consistent with a low target rate of inflation.»