Macroeconomic Models in a Spreadsheet: Multipliers, AD–AS, IS–LM & the Output Gap

What you'll build

What you will be able to do

Each lab ends with a concrete result that you build yourself and the checker confirms, cell by cell.

• Add up Veltria's GDP from the spending side, leave out what does not belong, rebuild it from the income side and measure the statistical discrepancy and the investment share.
• Solve the Keynesian cross for equilibrium output, compute the spending and tax multipliers and show why a balanced-budget increase in spending still raises output.
• Follow an injection of extra spending through 15 rounds, watch the cumulative effect approach 1/(1 − MPC), add tax and import leakages and find how many rounds it takes to reach 90% of the total.
• Solve a linear AD–AS model for the price level and output, run a demand boom and an adverse supply shock and compare both with potential output.
• Solve a linear IS–LM model by algebra in cells for output and the interest rate, compare a fiscal and a monetary expansion of the same output effect and measure the crowding out of investment.
• Measure Veltria's output gap over eight quarters, predict unemployment with an Okun-type rule, add up the output lost in the downturn and estimate the Okun coefficient from the data with SLOPE.
• Simulate inflation over 12 periods with adaptive and with anchored expectations, push unemployment below its natural rate, add a one-off supply shock and chart how far the two paths drift apart.
• Chain IS–LM, the output gap, Okun and the Phillips curve into one dashboard, run a baseline and three policy scenarios side by side and chart the inflation each scenario brings.