DAD–SAS model

The DAD–SAS model is a macroeconomic model based on the AD-AS model but that looks at the different incomes at different inflation levels.

DAD curve

The DAD (Dynamic aggregate demand) curve is in the long run a horizontal line called the EAD (Equilibrium aggregate Demand) curve. The short run DAD curve at flexible exchange rates is given by the equation:

The short run DAD curve at fixed exchange rates is given by the equation:

SAS curve

The SAS (Surprise aggregate supply) curve is in the long run a vertical line called the EAS (Equilibrium aggregate Supply) curve. The short run SAS curve is given by the equation:


This article is issued from Wikipedia - version of the 6/16/2016. The text is available under the Creative Commons Attribution/Share Alike but additional terms may apply for the media files.