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The AD-AS and the DAD-SAS model
 Aggregate demand and aggregate supply
The aggregate demand-aggregate supply model is the economists' powerful work horse for the analysis of business cycles. It builds on the IS-LM and the Mundell-Fleming models, and shares their short-run properties. It is more general and more refined, however, because
  it gives a more serious treatment of the supply side by including the labour market, and
  it links the short run with the long run because of its dynamic nature.

This section offers elearning resources ranging from animated looks at the foundations and mechanics of the AD-AS and DAD-SAS models to interactive applets equipped with carefully designed guided exercises.
A brief summary of the economic reasoning behind the AD curve, supported by a series of animations that show how the AD curve is related to the goods market, the money market and the foreign exchange market.

This educational viewlet show how to move the aggregate-demand curve from the price-income diagram to the inflation-income diagram.

A concise description of how the AS curve can be derived from the labour market - also supported by some quite elaborate animations.
This applet features the AD-AS model which traces the price level and income. Make your first hands-on experience with the model's dynamics and the role of inflation expectations formation.
Another animation. It focuses on how the DAD curve and the SAS curve interact in the DAD-SAS model, using monetary policy as an example.
This applet displays the DAD-SAS model. It has the same structure as the AD-AS model, but focuses on inflation rather than the price level. Guided exercises let you experiment with shocks and policy.
This applet features a more realistic (though more complex) version of the aggregate demand-aggregate supply model - the DAD-SAS model with income persistence.

Copyright 1997-2013, Manfred Gärtner. All rights reserved.