can you answer part b only, provide the graphs and explain please a) Assume an economy that starts with Y=Yn .Illustrate graphically and explain the impact of a contractionary monetary policy shock (e.g. a fall in the money supply or a rise in the interest rate) on output, inflation, and the distribution between profits and real wages in each of the following three models: Blanchard IS-LM-PC model with exogenous money; the Blanchard IS-LM-PC model with endogenous money; and the Anti-Blanchard IS-LM-PC model with endogenous money where firms have the power to adjust the economy after a shock. b) In all cases above assume inflation expectations are anchored, include a graph of inflation over time, and assume no deflationary spiral is created by the monetary policy shock.Briefly explain why it is difficult to empirically estimate he impact of monetary policy on output due to the problem of endogeneity caused by simultaneity. Discuss the extent to which there is empirical evidence to support any of the models’ predictions regarding the impact of monetary policy changes.
can you answer part b only, provide the graphs and explain please
a) Assume an economy that starts with Y=Yn .Illustrate graphically and explain the impact of a contractionary
b) In all cases above assume inflation expectations are anchored, include a graph of inflation over time, and assume no deflationary spiral is created by the monetary policy shock.Briefly explain why it is difficult to empirically estimate he impact of monetary policy on output due to the problem of endogeneity caused by simultaneity. Discuss the extent to which there is empirical evidence to support any of the models’ predictions regarding the impact of monetary policy changes.
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