NBER WORKING PAPER SERIES MONETARY POLICY IN AN UNCERTAIN ECONOMY Martin Feldstein
... the level of aggregate demand at any point in time can usefully be regarded as the sum of the demand that would exist with no active policy plus the effect of current and past policy changes. The variance of aggregate demand is therefore the sum of the “no policy” variance and the “policy induced v ...
... the level of aggregate demand at any point in time can usefully be regarded as the sum of the demand that would exist with no active policy plus the effect of current and past policy changes. The variance of aggregate demand is therefore the sum of the “no policy” variance and the “policy induced v ...
Macroeconomic policy
... investment, the price of assets such as houses, expectations, the exchange rate and net exports. What is the transmissions mechanism? The transmissions mechanism is the process by which a change in interest rates affects the future levels of economic activity and inflation. How do interest rates cha ...
... investment, the price of assets such as houses, expectations, the exchange rate and net exports. What is the transmissions mechanism? The transmissions mechanism is the process by which a change in interest rates affects the future levels of economic activity and inflation. How do interest rates cha ...
money supply
... Prices, Its short-term Operations Focus on the intermediate targets In determining monetary policy, the Fed directly manipulates the instruments or policy variables under its control----open-market operations, the discount rate, and reserve requirements. These help determine bank reserves, the money ...
... Prices, Its short-term Operations Focus on the intermediate targets In determining monetary policy, the Fed directly manipulates the instruments or policy variables under its control----open-market operations, the discount rate, and reserve requirements. These help determine bank reserves, the money ...
Central bank monitoring – December 2015
... The Federal Reserve has yet to start increasing interest rates despite wide expectations that it would do so at its September meeting. Attention is now focused on the December meeting, at which the Fed is expected to start gradually tightening monetary policy (this meeting will be held after the cut ...
... The Federal Reserve has yet to start increasing interest rates despite wide expectations that it would do so at its September meeting. Attention is now focused on the December meeting, at which the Fed is expected to start gradually tightening monetary policy (this meeting will be held after the cut ...
Why Are Long-Term Interest Rates So Low?
... investors worry about inflation risk, they require additional compensation for holding nominal bonds and the term premium is positive. But when low inflation or even deflation is an important concern, bonds can be viewed as an insurance against this risk, resulting in a negative term premium (Campbe ...
... investors worry about inflation risk, they require additional compensation for holding nominal bonds and the term premium is positive. But when low inflation or even deflation is an important concern, bonds can be viewed as an insurance against this risk, resulting in a negative term premium (Campbe ...
here
... Assets as of March 31, 2017. Total AUM may differ from the sum of the underlying business AUM due to rounding. Holdings are subject to change. Asset class breakdown is based on company estimates, and subject to change. 1 Includes all assets managed by PGIM, the principal asset management business of ...
... Assets as of March 31, 2017. Total AUM may differ from the sum of the underlying business AUM due to rounding. Holdings are subject to change. Asset class breakdown is based on company estimates, and subject to change. 1 Includes all assets managed by PGIM, the principal asset management business of ...
Chapter 7: Quantitative vs. Credit Easing
... “The Federal Reserve’s approach to supporting credit markets is conceptually distinct from quantitative easing (QE), the policy approach used by the Bank of Japan from 2001 to 2006. Our approach − which could be described as ‘credit easing’ − resembles quantitative easing in one respect: It involves ...
... “The Federal Reserve’s approach to supporting credit markets is conceptually distinct from quantitative easing (QE), the policy approach used by the Bank of Japan from 2001 to 2006. Our approach − which could be described as ‘credit easing’ − resembles quantitative easing in one respect: It involves ...
Module Types of Inflation, Disinflation, and Deflation
... The Output Gap and the Unemployment Rate There will always be some level of unemployment (frictional and structural) even when the economy is at potential output. This is called the natural rate of unemployment. When actual aggregate output is equal to potential output, the actual unemployment rate ...
... The Output Gap and the Unemployment Rate There will always be some level of unemployment (frictional and structural) even when the economy is at potential output. This is called the natural rate of unemployment. When actual aggregate output is equal to potential output, the actual unemployment rate ...
Central Banks and Monetary Policy Strategy
... increase wealth of the entire society. • Main powers of central bank: • Deciding the quantity of the monetary base • Use this power to set short-term interest rates (?) • In some economies, including HK, will regulate ...
... increase wealth of the entire society. • Main powers of central bank: • Deciding the quantity of the monetary base • Use this power to set short-term interest rates (?) • In some economies, including HK, will regulate ...
Money and Banking System 13.1
... Increase liquidity (how easily you can convert wealth to other forms)—money is most liquid Increase their buying power when prices expected to decline. Disadvantage-inflation eats at value, if interest doesn’t keep up with inflation. Opportunity costs occur when you hold money—you give up in ...
... Increase liquidity (how easily you can convert wealth to other forms)—money is most liquid Increase their buying power when prices expected to decline. Disadvantage-inflation eats at value, if interest doesn’t keep up with inflation. Opportunity costs occur when you hold money—you give up in ...
chapter # 6 - how the markets work - supply
... monetary policy ( selling bonds and increasing the federal funds rate ) , the Federal Reserve causes a decrease in the money supply . If the demand for money is constant , this new decrease in the money supply will force interest rates further upward , and investment will be lower . When investment ...
... monetary policy ( selling bonds and increasing the federal funds rate ) , the Federal Reserve causes a decrease in the money supply . If the demand for money is constant , this new decrease in the money supply will force interest rates further upward , and investment will be lower . When investment ...
WHAT ARE OPEN MARKET OPERATIONS (OMO)? As the nation`s
... OMO has three strengths of considerable importance: flexibility, precision and size. It is flexible, as any given OMO action can be easily revised or reversed on the same day or thereafter. The process is precise in that the RBF can buy or sell exactly the amount of RBF Notes it wishes. Lastly, OMO ...
... OMO has three strengths of considerable importance: flexibility, precision and size. It is flexible, as any given OMO action can be easily revised or reversed on the same day or thereafter. The process is precise in that the RBF can buy or sell exactly the amount of RBF Notes it wishes. Lastly, OMO ...
Money and Contracts
... intervention, competition would force the loan rate of interest to equal the deposit rate. However, it is assumed that government imposes a reserve requirement on the private banking system that requires a bank to hold at least a fraction 0 of its assets in the form of non-interest-bearing-loans to ...
... intervention, competition would force the loan rate of interest to equal the deposit rate. However, it is assumed that government imposes a reserve requirement on the private banking system that requires a bank to hold at least a fraction 0 of its assets in the form of non-interest-bearing-loans to ...
Economics, Inflation and Making Money
... • When demand for the dollar falls, people want to get rid of the dollar, so they spend it. This has the effect of increasing the supply • When demand for the dollar rises, people want to hold the dollar, so they keep it. This has the effect of decreasing the money ...
... • When demand for the dollar falls, people want to get rid of the dollar, so they spend it. This has the effect of increasing the supply • When demand for the dollar rises, people want to hold the dollar, so they keep it. This has the effect of decreasing the money ...
Chapter 5 The Financial Environment: Markets, Institutions, and
... future inflation, which would raise long-term rates. The result would be a much steeper yield curve. b. If the policy is maintained, the expanded money supply will result in increased rates of inflation and increased inflationary expectations. This will cause investors to increase the inflation prem ...
... future inflation, which would raise long-term rates. The result would be a much steeper yield curve. b. If the policy is maintained, the expanded money supply will result in increased rates of inflation and increased inflationary expectations. This will cause investors to increase the inflation prem ...
Financial crisis and economic downturn: Where
... of the central bank through an increase in its monetary liabilities (base money), holding constant the composition of its assets • Credit or qualitative easing is a shift in the composition of the assets of the central bank towards less liquid and riskier assets, holding constant the size of the bal ...
... of the central bank through an increase in its monetary liabilities (base money), holding constant the composition of its assets • Credit or qualitative easing is a shift in the composition of the assets of the central bank towards less liquid and riskier assets, holding constant the size of the bal ...
QUIZ 7: Macro – Winter 2011 Name
... the interest rate. Economists refer to the absence of long-run effects of money on output and the interest rate by saying that ‘money is neutral in the long-run’. However, as seen in question 3 part 1, a short-term effect of an increase in money supply is an expansion (the AD shifts out because real ...
... the interest rate. Economists refer to the absence of long-run effects of money on output and the interest rate by saying that ‘money is neutral in the long-run’. However, as seen in question 3 part 1, a short-term effect of an increase in money supply is an expansion (the AD shifts out because real ...
Slide 1
... Please join me in this short trip inside our debt-based financial system • Keynesianism and Monetarism have both failed because neither of them takes account of the mechanics of the debt system itself • This work proposes to replace them with an economic debt model that takes into account the mechan ...
... Please join me in this short trip inside our debt-based financial system • Keynesianism and Monetarism have both failed because neither of them takes account of the mechanics of the debt system itself • This work proposes to replace them with an economic debt model that takes into account the mechan ...
Interest Rate Swap Facility
... Clients that use WATC’s IRS product have the potential to realise considerable savings due to the economies of scale of WATC’s operations and access to wholesale rates. This is possible as WATC regularly transacts interest rate swaps of significant value in managing the State’s interest rate risk ex ...
... Clients that use WATC’s IRS product have the potential to realise considerable savings due to the economies of scale of WATC’s operations and access to wholesale rates. This is possible as WATC regularly transacts interest rate swaps of significant value in managing the State’s interest rate risk ex ...
Capital
... South Objected To The Excise Tax On Alcohol Used To Finance The Bank’s Interest Payments On States’ Debts • Whiskey Was “A Necessity of Southern Life” • Controversy Led To Shay’s Rebellion (“The Whiskey Rebellion”) in 1794 ...
... South Objected To The Excise Tax On Alcohol Used To Finance The Bank’s Interest Payments On States’ Debts • Whiskey Was “A Necessity of Southern Life” • Controversy Led To Shay’s Rebellion (“The Whiskey Rebellion”) in 1794 ...
Document
... our deposits and pay a certain interest rate and then invest the money at higher interest rates. They can loan money to the US government when they buy Treasuries (US bonds) and they can lend to businesses and households by creating checking accounts balances. The key feature of the banking system i ...
... our deposits and pay a certain interest rate and then invest the money at higher interest rates. They can loan money to the US government when they buy Treasuries (US bonds) and they can lend to businesses and households by creating checking accounts balances. The key feature of the banking system i ...
Quantity Theory of Money Redux? Will Inflation Be the Legacy of
... of money, which holds that inflation occurs when the money supply expands more rapidly than warranted by increases in real production. The Brief first reviews the US experience and shows that whereas rapid money growth might have been a plausible explanation of inflation in the 1960s through the ear ...
... of money, which holds that inflation occurs when the money supply expands more rapidly than warranted by increases in real production. The Brief first reviews the US experience and shows that whereas rapid money growth might have been a plausible explanation of inflation in the 1960s through the ear ...
Two Days Left… SIGN UP FOR YOUR AP EXAM(S)!
... Nominal vs. Real Interest Rates Example: • You lend out $100 with 20% interest. • Prices are expected to increased 15% • In a year you get paid back $120. • What is the nominal and what is the real interest rate? • The Nominal interest rate is 20% • The Real interest rate was only 5% • In reality, ...
... Nominal vs. Real Interest Rates Example: • You lend out $100 with 20% interest. • Prices are expected to increased 15% • In a year you get paid back $120. • What is the nominal and what is the real interest rate? • The Nominal interest rate is 20% • The Real interest rate was only 5% • In reality, ...
AP-Macro-Unit-4-Summary-2
... Nominal vs. Real Interest Rates Example: • You lend out $100 with 20% interest. • Prices are expected to increased 15% • In a year you get paid back $120. • What is the nominal and what is the real interest rate? • The Nominal interest rate is 20% • The Real interest rate was only 5% • In reality, ...
... Nominal vs. Real Interest Rates Example: • You lend out $100 with 20% interest. • Prices are expected to increased 15% • In a year you get paid back $120. • What is the nominal and what is the real interest rate? • The Nominal interest rate is 20% • The Real interest rate was only 5% • In reality, ...
Chapter 26 Money and Economic Stability in the ISLM World
... policy cannot make it work perfectly, it can surely improve how it works. This chapter provides some historical perspective on the intervention- nonintervention debate. It focuses on the factors that shift the IS and LM curves and determine their slopes. The economy becomes less stable in response t ...
... policy cannot make it work perfectly, it can surely improve how it works. This chapter provides some historical perspective on the intervention- nonintervention debate. It focuses on the factors that shift the IS and LM curves and determine their slopes. The economy becomes less stable in response t ...