Monetary Policy - Macmillan Learning
... By contrast, if the interest rate is relatively high—say, 15%, a level it reached in the United States in the early 1980s—the opportunity cost of holding money is high. People will respond by keeping only small amounts in cash and deposits, converting assets into money only when needed. You might as ...
... By contrast, if the interest rate is relatively high—say, 15%, a level it reached in the United States in the early 1980s—the opportunity cost of holding money is high. People will respond by keeping only small amounts in cash and deposits, converting assets into money only when needed. You might as ...
From Recession to Recovery: How Soon and How
... Recessions are distinctly shallower, briefer, and less frequent than expansions. In a typical recession, GDP falls by about 2¾ percent (Table 1).7 In contrast, during an expansion, GDP tends to rise by almost 20 percent. This illustrates mainly the importance of trend growth; the higher the long-run ...
... Recessions are distinctly shallower, briefer, and less frequent than expansions. In a typical recession, GDP falls by about 2¾ percent (Table 1).7 In contrast, during an expansion, GDP tends to rise by almost 20 percent. This illustrates mainly the importance of trend growth; the higher the long-run ...
Principles of Macroeconomics Self-study quiz and Exercises with
... A) changing the interest rate, which changes planned investment. B) directly increasing consumption, which increases aggregate output. C) changing the money supply, which changes the interest rate. D) changing the level of aggregate output, which changes the level of planned expenditure. Answer: C 4 ...
... A) changing the interest rate, which changes planned investment. B) directly increasing consumption, which increases aggregate output. C) changing the money supply, which changes the interest rate. D) changing the level of aggregate output, which changes the level of planned expenditure. Answer: C 4 ...
Managing Credit Bubbles - Universitat Pompeu Fabra
... an economy with extreme …nancial frictions that impede credit. In Martin and Ventura (2011), we extended the analysis to an economy with credit, and argued that bubbles could be a source of collateral. Those papers used a simple growth economy to establish two key results regarding …nancial frictio ...
... an economy with extreme …nancial frictions that impede credit. In Martin and Ventura (2011), we extended the analysis to an economy with credit, and argued that bubbles could be a source of collateral. Those papers used a simple growth economy to establish two key results regarding …nancial frictio ...
NATIONAL OPEN UNIVERSITY OF NIGERIA MACROECONOMICS
... tutorials, and the date of the first day of the semester is available from the study centre. You need to gather together all this information in one place, such as your dairy or a wall calendar. Whatever method you choose to use, you should decide on and write in your own dates for working through e ...
... tutorials, and the date of the first day of the semester is available from the study centre. You need to gather together all this information in one place, such as your dairy or a wall calendar. Whatever method you choose to use, you should decide on and write in your own dates for working through e ...
Monetarism, New Classical Theory, and Supply-Side
... If firms have rational expectations and if they set prices and wages on this basis, then, on average, prices and wages will be set at levels that ensure equilibrium in the goods and labor markets. ...
... If firms have rational expectations and if they set prices and wages on this basis, then, on average, prices and wages will be set at levels that ensure equilibrium in the goods and labor markets. ...
1 Criticisms of Aggregate Demand and Aggregate Supply: Mankiw`s
... A handful of authors have been making this point over the years (Caskey and Fazzari 1986 and 1987; Greenwald and Stiglitz 1993; Fazzari, Ferri, and Greenberg 1998), but these articles have been ignored in the scholarly literature and in the textbooks. Perhaps the current crisis will make macroeconom ...
... A handful of authors have been making this point over the years (Caskey and Fazzari 1986 and 1987; Greenwald and Stiglitz 1993; Fazzari, Ferri, and Greenberg 1998), but these articles have been ignored in the scholarly literature and in the textbooks. Perhaps the current crisis will make macroeconom ...
Financial Markets
... pattern in interest rates that would allow you to time your sale of securities to get the lowest possible yield. You must choose a period of time over which to estimate your model of interest rates. I recommend that you use as much data as possible. But, let us say that you are only going to use dat ...
... pattern in interest rates that would allow you to time your sale of securities to get the lowest possible yield. You must choose a period of time over which to estimate your model of interest rates. I recommend that you use as much data as possible. But, let us say that you are only going to use dat ...
Inflation - American University
... and more on its own “underlying rate”, even going so far as to call the CPI inflation rate the “headline” inflation rate. Naturally this raised concerns that the RBNZ would define its own rate in ways that would allow it to hit its target range, even when the CPI inflation fell outside that range. T ...
... and more on its own “underlying rate”, even going so far as to call the CPI inflation rate the “headline” inflation rate. Naturally this raised concerns that the RBNZ would define its own rate in ways that would allow it to hit its target range, even when the CPI inflation fell outside that range. T ...
01/2013 Esteban Pérez Caldentey, Daniel Titelman and Pablo Carvallo
... The analysis is undertaken using quarterly data covering the period 1989 to 2012.3 The majority of the results obtained are robust to the use of both the ‘Classical Cycle’ and ‘Deviation Cycle’ methodologies. These show that the Latin American and Caribbean cycle displays two distinct features. On t ...
... The analysis is undertaken using quarterly data covering the period 1989 to 2012.3 The majority of the results obtained are robust to the use of both the ‘Classical Cycle’ and ‘Deviation Cycle’ methodologies. These show that the Latin American and Caribbean cycle displays two distinct features. On t ...
2011:2 What is the natural interest rate?
... is also occasionally called the ‘natural output level’.4 However, if an economy reaches its potential output level and has a normal level of resource utilisation, this does not mean that this economy will always grow in accordance with the economy’s long-term growth rate. For example, productivity a ...
... is also occasionally called the ‘natural output level’.4 However, if an economy reaches its potential output level and has a normal level of resource utilisation, this does not mean that this economy will always grow in accordance with the economy’s long-term growth rate. For example, productivity a ...
BEING KEYNESIAN IN THE SHORT TERM AND CLASSICAL IN
... refer to a long-term equilibrium, also called steady state or long-term center of gravitation3 . The definition of this equilibrium is conventional. On the classical long-term equilibrium, the profit rates among enterprises are uniform, prices are equal to prices of production, and the capacity util ...
... refer to a long-term equilibrium, also called steady state or long-term center of gravitation3 . The definition of this equilibrium is conventional. On the classical long-term equilibrium, the profit rates among enterprises are uniform, prices are equal to prices of production, and the capacity util ...
targeting financial stability: macroprudential or monetary policy?
... There are two compelling justifications for augmenting the standard loss function in this way. First, in the aftermath of the financial crisis many central banks are mandated to achieve financial stability goals by elected governments on behalf of the public. For example, the Bank of England’s Finan ...
... There are two compelling justifications for augmenting the standard loss function in this way. First, in the aftermath of the financial crisis many central banks are mandated to achieve financial stability goals by elected governments on behalf of the public. For example, the Bank of England’s Finan ...
Chapter 9 - Cengage Learning
... some of the current rise in their income for future use. This is achieved through investment. By increasing the period 2 capital stock, they can increase future income which funds higher future consumption. This consumption smoothing behaviour acts as the propagation mechanism which can turn tempora ...
... some of the current rise in their income for future use. This is achieved through investment. By increasing the period 2 capital stock, they can increase future income which funds higher future consumption. This consumption smoothing behaviour acts as the propagation mechanism which can turn tempora ...
NBER WORKING PAPER SERIES AN EVALUATION OF THEORY AND EVIDENCE B. Douglas Bernheim
... equivalence, it is essential to distinguish between the short run effects of government borrowing (primarily the potential for stimulating aggregate demand) and the long run effects (primarily the potential for depressing capital accumulation). I argue that the theoretical case for long run neutrali ...
... equivalence, it is essential to distinguish between the short run effects of government borrowing (primarily the potential for stimulating aggregate demand) and the long run effects (primarily the potential for depressing capital accumulation). I argue that the theoretical case for long run neutrali ...
The relevance of Keynes - Dr. Robert E. Looney Homepage
... of the General Theory (Keynes, 1973A) was to explain how an economy could get stuck in a low employment trap. This explanation was provided by the theory of effective demand. Demand is effective at the point where the aggregate supply and demand schedules intersect; the theory of effective demand st ...
... of the General Theory (Keynes, 1973A) was to explain how an economy could get stuck in a low employment trap. This explanation was provided by the theory of effective demand. Demand is effective at the point where the aggregate supply and demand schedules intersect; the theory of effective demand st ...
CHAPTER IX THEORIES OP INFLATION There are seven important
... to the waging of war or for any other reason, if the Gover nment expenditure is higher and thus investment (which includes Government expenditure, as in Keynesian termino logy, every autonomous expenditure is deemed as investment and all investment is depicted as autonomous) is in excess of saving ...
... to the waging of war or for any other reason, if the Gover nment expenditure is higher and thus investment (which includes Government expenditure, as in Keynesian termino logy, every autonomous expenditure is deemed as investment and all investment is depicted as autonomous) is in excess of saving ...
The Rise and Fall of Walrasian Economics - FEA
... economics. For example, Hicks‟s Value and Capital (1946) is very different from Kenneth Arrow and Frank Hahn‟s General Competitive Analysis (1971), and there is no reason to believe that either captures the true essence of the Walrasian system, yet they do both contain common, identifiable, proposit ...
... economics. For example, Hicks‟s Value and Capital (1946) is very different from Kenneth Arrow and Frank Hahn‟s General Competitive Analysis (1971), and there is no reason to believe that either captures the true essence of the Walrasian system, yet they do both contain common, identifiable, proposit ...
Macroeconomics: A Growth Theory Approach
... looking agents will be especially important in contemplating the effects of alternative government policies. The analysis will be based on the assumption that consumers understand the effects of new policies and make reasoned decisions based on how the world works under the new policies. The forward ...
... looking agents will be especially important in contemplating the effects of alternative government policies. The analysis will be based on the assumption that consumers understand the effects of new policies and make reasoned decisions based on how the world works under the new policies. The forward ...
12 INFLATION, JOBS, AND THE BUSINESS CYCLE*
... If nothing else changes, there is a one-time increase in the price level. To create a persisting inflation the Fed must respond to the short-run decline in GDP by increasing the quantity of money. In this case, aggregate demand increases and the price level rises still higher. ...
... If nothing else changes, there is a one-time increase in the price level. To create a persisting inflation the Fed must respond to the short-run decline in GDP by increasing the quantity of money. In this case, aggregate demand increases and the price level rises still higher. ...
It`s Not a Minsky Moment, It`s a Minsky Era, Or: Inevitable Instability
... The economist Hyman P. Minsky wrote extensively and prolifically throughout the latter half of the 20th century. Hardly anybody listened.2 When the storm broke in 2007 a number of financial journalists discovered, or thought they had discovered, him and his work and began to talk about a ‘Minsky Mom ...
... The economist Hyman P. Minsky wrote extensively and prolifically throughout the latter half of the 20th century. Hardly anybody listened.2 When the storm broke in 2007 a number of financial journalists discovered, or thought they had discovered, him and his work and began to talk about a ‘Minsky Mom ...
Lecture 2
... 1. Gross Domestic Product (GDP) measures both total income and total expenditure on the economy’s output of goods & services. 2. Nominal GDP values output at current prices; real GDP values output at constant prices. Changes in output affect both measures, but changes in prices only affect nominal ...
... 1. Gross Domestic Product (GDP) measures both total income and total expenditure on the economy’s output of goods & services. 2. Nominal GDP values output at current prices; real GDP values output at constant prices. Changes in output affect both measures, but changes in prices only affect nominal ...
Chapter # 3
... shown in fig 3.6. indifference curves of the CB of the more inflation averse CB are flatter than the less inflation averse. The more inflation averse CB chooses point D because it is willing to sacrifice a bigger increase in unemp to get inflation lower more, and the other one chooses F on PC(πl = ...
... shown in fig 3.6. indifference curves of the CB of the more inflation averse CB are flatter than the less inflation averse. The more inflation averse CB chooses point D because it is willing to sacrifice a bigger increase in unemp to get inflation lower more, and the other one chooses F on PC(πl = ...
Microfoundational programs
... proportion of all articles published in 97 economics journals.9 There are few uses before the end of World War II. Growth in the use of “microeconomics” is fairly steady, finally stabilizing around 10 percent only in the 1990s. “Macroeconomics” shows a similar pattern, although its growth is faster ...
... proportion of all articles published in 97 economics journals.9 There are few uses before the end of World War II. Growth in the use of “microeconomics” is fairly steady, finally stabilizing around 10 percent only in the 1990s. “Macroeconomics” shows a similar pattern, although its growth is faster ...
Chapter 3. From Recession to Recovery: How Soon and How
... • Recessions associated with financial crises have been more severe and longer lasting than recessions associated with other shocks. Recoveries from such recessions have been typically slower, associated with weak domestic demand and tight credit conditions. • Recessions that are highly synchroniz ...
... • Recessions associated with financial crises have been more severe and longer lasting than recessions associated with other shocks. Recoveries from such recessions have been typically slower, associated with weak domestic demand and tight credit conditions. • Recessions that are highly synchroniz ...