B.A. I(Hons) Economics
... Inflation: Types of inflation, cost push and demand pull inflation, classical, keysian and monetarist approaches to inflation. Phillips curve (introductory version) Unit-3 Rate of Interest: Keysian and IS-LM theories of interest rate. Macro economic policies, Effectiveness of monetary and fiscal pol ...
... Inflation: Types of inflation, cost push and demand pull inflation, classical, keysian and monetarist approaches to inflation. Phillips curve (introductory version) Unit-3 Rate of Interest: Keysian and IS-LM theories of interest rate. Macro economic policies, Effectiveness of monetary and fiscal pol ...
An Austrian Look at the Price Revolution
... preferences, and the fact that these processes were not backed by investment. The bust that occurs is asymmetric from the boom. The prices of capital goods and factories collapse and the process continues until the capital structure is shortened again in a manner which satisfies consumer preference ...
... preferences, and the fact that these processes were not backed by investment. The bust that occurs is asymmetric from the boom. The prices of capital goods and factories collapse and the process continues until the capital structure is shortened again in a manner which satisfies consumer preference ...
Chapter 19 The Demand for Money
... • Distinguishing Between the Friedman and Keynesian Theories. • Friedman recognized more than one interest rate in his demand for money function, Keynes, lumped financial assets other than money into one bonds because he felt that their returns generally move together. • Friedman viewed money and go ...
... • Distinguishing Between the Friedman and Keynesian Theories. • Friedman recognized more than one interest rate in his demand for money function, Keynes, lumped financial assets other than money into one bonds because he felt that their returns generally move together. • Friedman viewed money and go ...
Keynesian Economics
... GNP, and real national saving should not be affected by whether the government finances its spending with high taxes and low deficits or with low taxes and high deficits. Because people are rational, he argues, they will correctly perceive that low taxes and high deficits today must mean higher futu ...
... GNP, and real national saving should not be affected by whether the government finances its spending with high taxes and low deficits or with low taxes and high deficits. Because people are rational, he argues, they will correctly perceive that low taxes and high deficits today must mean higher futu ...
M x V = P x Q
... gaps and tight money policy can cure inflationary gaps. However, as discussed below, the Keynesians looked at the world and saw that there are a couple of potential problems with using monetary policy. Because of these potential problems, Keynesians think that we cannot rely on monetary policy. ...
... gaps and tight money policy can cure inflationary gaps. However, as discussed below, the Keynesians looked at the world and saw that there are a couple of potential problems with using monetary policy. Because of these potential problems, Keynesians think that we cannot rely on monetary policy. ...
Additional Help
... A change in the bank rate is one form of monetary policy. 7. B Response: Contractionary monetary policy increases interest rates which reduces investment, a component of aggregate expenditures. The AD curve shifts to the left by a multiple of the decline in investment. 8. B Response: The interest ra ...
... A change in the bank rate is one form of monetary policy. 7. B Response: Contractionary monetary policy increases interest rates which reduces investment, a component of aggregate expenditures. The AD curve shifts to the left by a multiple of the decline in investment. 8. B Response: The interest ra ...
CHAPTER 3 THE FED AND INTEREST RATES CHAPTER
... Rises as people perceive they have “more money”; b. Drops as people perceive they have “less money”; c. Is distorted by volatility in prices. ...
... Rises as people perceive they have “more money”; b. Drops as people perceive they have “less money”; c. Is distorted by volatility in prices. ...
Document
... that “supply creates its own demand” and therefore the Great Depression was impossible. Say’s Law is the belief that the value of production generates an equal amount of income and, in turn, total spending. ...
... that “supply creates its own demand” and therefore the Great Depression was impossible. Say’s Law is the belief that the value of production generates an equal amount of income and, in turn, total spending. ...
Chapter 10 Aggregate Demand & Aggregate Supply
... prices, workers would accept lower wages and more would be hired. Keynes focused much of his attack on the price-wage flexibility theory. 4. Involuntary unemployment was impossible. Although wages would drop, prices had also, so your purchasing power would be about the same. OK, I’ll take this lower ...
... prices, workers would accept lower wages and more would be hired. Keynes focused much of his attack on the price-wage flexibility theory. 4. Involuntary unemployment was impossible. Although wages would drop, prices had also, so your purchasing power would be about the same. OK, I’ll take this lower ...
Money, Multiplier Accelerator Interaction, and the Business Cycle
... analyzed in abstraction from the short-run dynamic complications that consitute the essence of cyclical phenomena; indeed, net investment is sometimes assumed to be a function only of the rate of interest rather than being sensitive to either the level of output or the magnitude of the capital stock ...
... analyzed in abstraction from the short-run dynamic complications that consitute the essence of cyclical phenomena; indeed, net investment is sometimes assumed to be a function only of the rate of interest rather than being sensitive to either the level of output or the magnitude of the capital stock ...
Keynesian economics
... Active fiscal policy As noted, the classicals wanted to balance the government budget. To Keynes, this would exacerbate the underlying problem: following either policy would raise saving (broadly defined) and thus lower the demand for both products and labor. For example, Keynesians see Herbert Hoov ...
... Active fiscal policy As noted, the classicals wanted to balance the government budget. To Keynes, this would exacerbate the underlying problem: following either policy would raise saving (broadly defined) and thus lower the demand for both products and labor. For example, Keynesians see Herbert Hoov ...
The Economics of Housing Bubbles
... caused by manipulations of monetary policy. This view has the advantages of being forward looking and identifying an economic cause of bubbles. By identifying an economic cause it also directs us to policy choices that would prevent future bubbles. Most people agree with the majority of economists, ...
... caused by manipulations of monetary policy. This view has the advantages of being forward looking and identifying an economic cause of bubbles. By identifying an economic cause it also directs us to policy choices that would prevent future bubbles. Most people agree with the majority of economists, ...
es09 Tsomocos 11173378 en
... The benchmark DSGE model is a micro-founded representative agent model with real and/or nominal rigidities that incorporates elements of the Real Business Cycle approach and the New Keynesian paradigm, and where monetary policy is conducted by an independent Central Bank which follows an interest ra ...
... The benchmark DSGE model is a micro-founded representative agent model with real and/or nominal rigidities that incorporates elements of the Real Business Cycle approach and the New Keynesian paradigm, and where monetary policy is conducted by an independent Central Bank which follows an interest ra ...
From bimetallism to monetarism
... and was formulated as a menu for policy choice in the 1960s, discussions about anti-inflation policies focussed not so much on picking an optimal point on the curve and using monetary policy to get there, as on finding means, usually involving structural policies, or wage-price guideposts, to shift ...
... and was formulated as a menu for policy choice in the 1960s, discussions about anti-inflation policies focussed not so much on picking an optimal point on the curve and using monetary policy to get there, as on finding means, usually involving structural policies, or wage-price guideposts, to shift ...
Challenging Dominant Market Theories in Five Ways
... force to end that crisis. However, Keynes is more or less implying that the government is not otherwise heavily implicated in the market and economics as a whole. Keynesian economics is not exactly a critique of markets, but rather an economic fix to repair markets when they are in trouble. It is im ...
... force to end that crisis. However, Keynes is more or less implying that the government is not otherwise heavily implicated in the market and economics as a whole. Keynesian economics is not exactly a critique of markets, but rather an economic fix to repair markets when they are in trouble. It is im ...
Session 6 Inflation - University of Reading
... money. Normally, only one bank has such authority. In ancient societies, money was in the form of gold, silver or other precious commodities which were seen as having value, and could be exchanged for goods and services. However, by the 13th century the Chinese had come up with the idea of using pap ...
... money. Normally, only one bank has such authority. In ancient societies, money was in the form of gold, silver or other precious commodities which were seen as having value, and could be exchanged for goods and services. However, by the 13th century the Chinese had come up with the idea of using pap ...
Government Policies: - Eg 1
... competitiveness. Increased exports will increase growth and the balance of trade will increase as export sales exceed import payments. By using supply side policy, the economy will become more productive, by increasing Aggregate Supply and can successfully get the economy out of a recession without ...
... competitiveness. Increased exports will increase growth and the balance of trade will increase as export sales exceed import payments. By using supply side policy, the economy will become more productive, by increasing Aggregate Supply and can successfully get the economy out of a recession without ...
The Monetary Policy Transmission Process: What Do We Know
... into their interest rates. When the Bank raises the cash rate, these risk premia may also rise, altering the supply of credit and influencing the amount of investment which is financed. They may, instead of raising interest rates to reflect the higher risk, impose some form of rationing – raising th ...
... into their interest rates. When the Bank raises the cash rate, these risk premia may also rise, altering the supply of credit and influencing the amount of investment which is financed. They may, instead of raising interest rates to reflect the higher risk, impose some form of rationing – raising th ...
From Bimetallism to Monetarism
... To begin with, the “monetarist-structuralist debate” about inflation and growth was well under way in Latin America by the early 1960s, before the monetarist controversy had gathered much momentum in the United States and Europe, and Friedman’s work played only a peripheral role in this, particularl ...
... To begin with, the “monetarist-structuralist debate” about inflation and growth was well under way in Latin America by the early 1960s, before the monetarist controversy had gathered much momentum in the United States and Europe, and Friedman’s work played only a peripheral role in this, particularl ...
Monetary Policy Tools 16.3
... Anticipating the Business Cycle The Federal Reserve must not only react to current trends, but also must anticipate changes in the economy. Monetary Policy and Inflation ...
... Anticipating the Business Cycle The Federal Reserve must not only react to current trends, but also must anticipate changes in the economy. Monetary Policy and Inflation ...
Real Business Cycles Theory
... Real Business Cycles Theory Research on economic fluctuations has progressed rapidly since Robert Lucas revived the profession’s interest in business cycle theory. Business cycle theory is the theory of the nature and causes of economic fluctuations The new Classical paradigm tried to account for th ...
... Real Business Cycles Theory Research on economic fluctuations has progressed rapidly since Robert Lucas revived the profession’s interest in business cycle theory. Business cycle theory is the theory of the nature and causes of economic fluctuations The new Classical paradigm tried to account for th ...
Chapter 4 Study Guide
... any nominal interest rate should comprise at least 2 components: a. Rent on the money—“real” rate rewarding postponement of consumption. b. Adjustment for anticipated changes in purchasing power. ...
... any nominal interest rate should comprise at least 2 components: a. Rent on the money—“real” rate rewarding postponement of consumption. b. Adjustment for anticipated changes in purchasing power. ...
Does Macroeconomics Need Microeconomic Foundations?
... Thus, there is no way to specify first principles (such as the time preference of the example) that are dependent on expectations and at the same time invariant to either policy or any behavior being forecasted. This implies that one must only check for model stability, regardless of the concern wit ...
... Thus, there is no way to specify first principles (such as the time preference of the example) that are dependent on expectations and at the same time invariant to either policy or any behavior being forecasted. This implies that one must only check for model stability, regardless of the concern wit ...
Notes
... • In late 1998, the Bank of Japan, and the Bank of England, were removed from the direct control of the Ministry of Finance and the Chancellor and the Exchequer respectively. • In 1997 and 2003 revisions of the Bank of Korea Act, the Bank of Korea were removed from the direct and indirect control of ...
... • In late 1998, the Bank of Japan, and the Bank of England, were removed from the direct control of the Ministry of Finance and the Chancellor and the Exchequer respectively. • In 1997 and 2003 revisions of the Bank of Korea Act, the Bank of Korea were removed from the direct and indirect control of ...
Ch. 14
... If Fed can affect the federal funds rate, why should we care? We might be interested in the interest rates on CDs, mortgage rates, credit card interest rates? Usually, interest rates all go hand in hand. When the Fed increases the federal funds rate, banks increase their prime rates, too. ...
... If Fed can affect the federal funds rate, why should we care? We might be interested in the interest rates on CDs, mortgage rates, credit card interest rates? Usually, interest rates all go hand in hand. When the Fed increases the federal funds rate, banks increase their prime rates, too. ...