Slide 1
... due to an exogenous fall in the demand for goods & services Supporting evidence: ◦ output, consumption, and investment declined steadily from 1929-1934 ◦ Government spending remained largely unchanged during this period ...
... due to an exogenous fall in the demand for goods & services Supporting evidence: ◦ output, consumption, and investment declined steadily from 1929-1934 ◦ Government spending remained largely unchanged during this period ...
Fed - Madison County Schools
... a. An easy money policy during depression does not guarantee that people will take out loans if they don’t have jobs. [“You can lead a horse to water, but you can’t make him drink.”] b. The cyclical asymmetry has not created a major difficulty for monetary policy except during times of depression. c ...
... a. An easy money policy during depression does not guarantee that people will take out loans if they don’t have jobs. [“You can lead a horse to water, but you can’t make him drink.”] b. The cyclical asymmetry has not created a major difficulty for monetary policy except during times of depression. c ...
The Two Triangles: what did Wicksell and Keynes know about
... evolve as “cumulative processes”, which are the result of the interplay of “deep parameters” rather than exogenous factors. The system will return to its intertemporal-equilibrium path only when the interest-rate gap is closed and the resulting saving-investment imbalance is corrected. Hence, price ...
... evolve as “cumulative processes”, which are the result of the interplay of “deep parameters” rather than exogenous factors. The system will return to its intertemporal-equilibrium path only when the interest-rate gap is closed and the resulting saving-investment imbalance is corrected. Hence, price ...
Grad8
... This shows that autonomous spending multiplier given in (8.15) is equal to the sum of all the rounds of spending generated by the initial one dollar autonomous increase is spending. The reason the multiplier is greater than one is that any additional spending becomes additional income, which then te ...
... This shows that autonomous spending multiplier given in (8.15) is equal to the sum of all the rounds of spending generated by the initial one dollar autonomous increase is spending. The reason the multiplier is greater than one is that any additional spending becomes additional income, which then te ...
Does consumer credit support domestic growth or imports?
... However, Büyükkarabacak and Krause (2009) underline that it is crucial to distinguish private household credit from private business credit in order to study the impact of private credit on GDP. Using data from 9 developing and transition countries, they find that, while private business credit is n ...
... However, Büyükkarabacak and Krause (2009) underline that it is crucial to distinguish private household credit from private business credit in order to study the impact of private credit on GDP. Using data from 9 developing and transition countries, they find that, while private business credit is n ...
Interest_Rates_NY_Fed
... "APY" is the effective interest rate from the standpoint of a person receiving interest. If you have $1,000 in each of two bank accounts, each paying the same interest rate, but the interest is credited more often (let’s say, every month, rather than once a year) on one of the accounts, that account ...
... "APY" is the effective interest rate from the standpoint of a person receiving interest. If you have $1,000 in each of two bank accounts, each paying the same interest rate, but the interest is credited more often (let’s say, every month, rather than once a year) on one of the accounts, that account ...
Slide - MyWeb
... In reality, the size of the multiplier is about 2. That is, a sustained increase in exogenous spending of $10 billion into the U.S. economy can be expected to raise real GDP over time by about $20 billion. ...
... In reality, the size of the multiplier is about 2. That is, a sustained increase in exogenous spending of $10 billion into the U.S. economy can be expected to raise real GDP over time by about $20 billion. ...
Why DSGE analysis cannot accurately model financial-real sector interaction
... Meltzer, 1971; Clower and Howitt, 1996). Demanders already know suppliers want money and suppliers already know demanders offer money. Strictly speaking, therefore, money does not set aside Jevons’ requirement of a double coincidence of wants, but ensures that the knowledge needed for coincidence in ...
... Meltzer, 1971; Clower and Howitt, 1996). Demanders already know suppliers want money and suppliers already know demanders offer money. Strictly speaking, therefore, money does not set aside Jevons’ requirement of a double coincidence of wants, but ensures that the knowledge needed for coincidence in ...
MONETARY AND FISCAL POLICY IN THE VERY SHORT RUN
... economies of Canada and the United States would slip into a severe recession. In response to this, the Bank of Canada and the Federal Reserve Board very quickly began lowering interest rates. In a short period of time, interest rates in each country were at a 40-year low. The hope was that this sudd ...
... economies of Canada and the United States would slip into a severe recession. In response to this, the Bank of Canada and the Federal Reserve Board very quickly began lowering interest rates. In a short period of time, interest rates in each country were at a 40-year low. The hope was that this sudd ...
Mankiw: Brief Principles of Macroeconomics, Second Edition
... account, the receivers of these checks deposit them in their banks. • These banks now can increase their loans. • When the Fed buys $10 million worth of securities, because of multiple deposit creation, money supply increases much ...
... account, the receivers of these checks deposit them in their banks. • These banks now can increase their loans. • When the Fed buys $10 million worth of securities, because of multiple deposit creation, money supply increases much ...
How to build an economy free of recession
... natural fluctuations, however, classical economists avoid the task of finding the causes of economic recessions and have failed to explain why an efficient market allows some economic recessions to last for many years. Instead, they focus on developing economic models and econometric estimations and ...
... natural fluctuations, however, classical economists avoid the task of finding the causes of economic recessions and have failed to explain why an efficient market allows some economic recessions to last for many years. Instead, they focus on developing economic models and econometric estimations and ...
CHAPTER 20 ADVANCED TOPICS Chapter Outline An Overview of
... graphically with an AD-AS diagram. If we have adaptive expectations, the AD-curve shifts first, followed by an AS-curve shift in the long run that will restore a long-run equilibrium at the full-employment level of output. If people had perfect foresight, however, the AD-curve and the AS-curve would ...
... graphically with an AD-AS diagram. If we have adaptive expectations, the AD-curve shifts first, followed by an AS-curve shift in the long run that will restore a long-run equilibrium at the full-employment level of output. If people had perfect foresight, however, the AD-curve and the AS-curve would ...
capr 1+) New Ke,Jne5Ian conomIcs: SticL,9 PrIces
... to clear markets will have important implications for how the economy behaves and for economic policy. The New Keynesian model studied in this chapter is essentially identical to the monetary intertemporal model in Chapter 12, except that the price level is not sufficiently flexible for the goods ma ...
... to clear markets will have important implications for how the economy behaves and for economic policy. The New Keynesian model studied in this chapter is essentially identical to the monetary intertemporal model in Chapter 12, except that the price level is not sufficiently flexible for the goods ma ...
Were 364 Economists All Wrong? - Institute of Economic Affairs
... not just necessary to achieve their stated objectives of lower inflation, fiscal prudence and lower interest rates, they were arguably essential to prevent the economic chaos that arises from unmanageable levels of government borrowing and debt. It is easy to forget just how precarious Britain’s fin ...
... not just necessary to achieve their stated objectives of lower inflation, fiscal prudence and lower interest rates, they were arguably essential to prevent the economic chaos that arises from unmanageable levels of government borrowing and debt. It is easy to forget just how precarious Britain’s fin ...
a case study of class-based political business cycles
... greater intensity’ than anything since the end of World War II (cited in Whitwell, 1986: 208). A 25% tariff cut (July) and a further 4.8% revaluation (September)4 by the new Labor Government in its first year (1973) helped macroeconomic policy by diverting demand pressures to imports. There was also ...
... greater intensity’ than anything since the end of World War II (cited in Whitwell, 1986: 208). A 25% tariff cut (July) and a further 4.8% revaluation (September)4 by the new Labor Government in its first year (1973) helped macroeconomic policy by diverting demand pressures to imports. There was also ...
Is there a monetary growth imperative?
... and Mignon, 2011; Orphanides and Solow, 1990). It furthermore critically depends on which assumptions are made concerning marginal productivity of capital, the characteristics of economic agents, the distribution of seigniorage, the saving rate etc. (Orphanides and Solow, 1990) Thus it is openly adm ...
... and Mignon, 2011; Orphanides and Solow, 1990). It furthermore critically depends on which assumptions are made concerning marginal productivity of capital, the characteristics of economic agents, the distribution of seigniorage, the saving rate etc. (Orphanides and Solow, 1990) Thus it is openly adm ...
The financial cycle and macroeconomics
... veil – a factor that, as a first approximation, could be ignored when seeking to understand business fluctuations (eg, Woodford (2003)). And when included at all, it would at most enhance the persistence of the impact of economic shocks that buffet the economy, delaying slightly its natural return t ...
... veil – a factor that, as a first approximation, could be ignored when seeking to understand business fluctuations (eg, Woodford (2003)). And when included at all, it would at most enhance the persistence of the impact of economic shocks that buffet the economy, delaying slightly its natural return t ...
An optimum-currency
... In this paper, we examine two issues that have received insufficient attention in the discussion of optimum-currency-areas. First, although Mundell is frequently cited as the originator of the concept of an optimum-currency-area, the basic tenets of optimumcurrency-area theory had already been work ...
... In this paper, we examine two issues that have received insufficient attention in the discussion of optimum-currency-areas. First, although Mundell is frequently cited as the originator of the concept of an optimum-currency-area, the basic tenets of optimumcurrency-area theory had already been work ...
Miller
... When the money supply increases, people have too much money. – How can this be? – Have you ever had too much money? – If you have a savings account, then at some point you had too much money. – Money is not the same thing as income. Slide 17-30 ...
... When the money supply increases, people have too much money. – How can this be? – Have you ever had too much money? – If you have a savings account, then at some point you had too much money. – Money is not the same thing as income. Slide 17-30 ...
Intertemporal discoordination in the 100 percent reserve banking
... interest rates would be freely determined by the demand for and supply of loanable funds, rather than continuously manipulated by monetary injections. By contrast, the Chicago Plan Revisited by Benes and Kumhof (2013) takes the opposite view, that the creation of money is equivalent to the creation ...
... interest rates would be freely determined by the demand for and supply of loanable funds, rather than continuously manipulated by monetary injections. By contrast, the Chicago Plan Revisited by Benes and Kumhof (2013) takes the opposite view, that the creation of money is equivalent to the creation ...
Interest Rates
... • With capital markets, consumption is not determined by current income, but by wealth (present value of lifetime income) • These two individuals, having the same wealth, should choose the same consumption. • For a given level of wealth, those with high rates of income growth would be expected to be ...
... • With capital markets, consumption is not determined by current income, but by wealth (present value of lifetime income) • These two individuals, having the same wealth, should choose the same consumption. • For a given level of wealth, those with high rates of income growth would be expected to be ...
Is there a monetary growth imperative?
... and Mignon, 2011; Orphanides and Solow, 1990). It furthermore critically depends on which assumptions are made concerning marginal productivity of capital, the characteristics of economic agents, the distribution of seigniorage, the saving rate etc. (Orphanides and Solow, 1990) Thus it is openly adm ...
... and Mignon, 2011; Orphanides and Solow, 1990). It furthermore critically depends on which assumptions are made concerning marginal productivity of capital, the characteristics of economic agents, the distribution of seigniorage, the saving rate etc. (Orphanides and Solow, 1990) Thus it is openly adm ...
Lecture Outline
... An increase in government purchases shifts the aggregate-demand curve to the right, while a decrease in government purchases shifts the aggregate-demand curve to the left. There are two macroeconomic effects that cause the size of the shift in the aggregate-demand curve to be different from the ...
... An increase in government purchases shifts the aggregate-demand curve to the right, while a decrease in government purchases shifts the aggregate-demand curve to the left. There are two macroeconomic effects that cause the size of the shift in the aggregate-demand curve to be different from the ...
Inflation and Other Risks of Unsound Money
... reason and logic. The bad economic theories are those are based on fallacies that most often ignore longer term effects. In most of the world, the current prevailing economic theory is ‘Keynesian economics’ as established by John Maynard Keynes in his book ‘The General Theory of Employment, Interest ...
... reason and logic. The bad economic theories are those are based on fallacies that most often ignore longer term effects. In most of the world, the current prevailing economic theory is ‘Keynesian economics’ as established by John Maynard Keynes in his book ‘The General Theory of Employment, Interest ...
Real-Wage Rigidity
... • Since firms have some monopoly power, they price goods at a markup over their marginal cost of production: P = (1 + η)MC ...
... • Since firms have some monopoly power, they price goods at a markup over their marginal cost of production: P = (1 + η)MC ...