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... (c) Monetary expansions precede both business cycle troughs and business cycle peaks. (d) There is no consistent relationship between monetary expansions and contractions, and the business cycle. Which of the following is a correct characterization of the views of economists on the relation between ...
... (c) Monetary expansions precede both business cycle troughs and business cycle peaks. (d) There is no consistent relationship between monetary expansions and contractions, and the business cycle. Which of the following is a correct characterization of the views of economists on the relation between ...
Monetary Endogeneity and the Quantity Theory
... the full extent of its debasement—that depends on the degree of restriction of the quantity of the debased currency, and not simply on the relationship between the original and the new metallic content of the coinage. iii. ricardo as quantity theorist? I started the above exposition with Marx, and r ...
... the full extent of its debasement—that depends on the degree of restriction of the quantity of the debased currency, and not simply on the relationship between the original and the new metallic content of the coinage. iii. ricardo as quantity theorist? I started the above exposition with Marx, and r ...
1 - Whitman People
... The crowding-out effect is the tendency for increases in government spending to cause reductions in private investment spending. The two factors that influence the size of the crowding-out effect are the interest sensitivity of investment demand and whether or not the Fed accommodates the expansiona ...
... The crowding-out effect is the tendency for increases in government spending to cause reductions in private investment spending. The two factors that influence the size of the crowding-out effect are the interest sensitivity of investment demand and whether or not the Fed accommodates the expansiona ...
Figure 8-12 Responses of the Inflation Rate (p)
... GDP), inflation increases and the output ratio rises temporarily and a negative demand shock can cause inflation to decelerate. An adverse supply shock (cause by a sharp change in the price of an important commodity that causes inflation to rise or fall) can boost inflation while causing output ra ...
... GDP), inflation increases and the output ratio rises temporarily and a negative demand shock can cause inflation to decelerate. An adverse supply shock (cause by a sharp change in the price of an important commodity that causes inflation to rise or fall) can boost inflation while causing output ra ...
The Two Triangles: What Did Wicksell and Keynes Know about
... Blanchard, 2000, p. 1385-88; Woodford, 2003b, p. 5-6). The NNS is believed to have overcome these shortcomings by integrating price-setting behaviour into a DSGE framework. Woodford’s insistence that the key results of Wicksellian theory can be replicated in DSGE models (Woodford, 2003b; Woodford, 2 ...
... Blanchard, 2000, p. 1385-88; Woodford, 2003b, p. 5-6). The NNS is believed to have overcome these shortcomings by integrating price-setting behaviour into a DSGE framework. Woodford’s insistence that the key results of Wicksellian theory can be replicated in DSGE models (Woodford, 2003b; Woodford, 2 ...
A New Approach to Monetary Theory and Policy: A Monetary
... money in exchange for a debt for a stated period of time. Thus the rate of interest at any time, being the reward for parting with liquidity, is a measure of the unwillingness of those who possess money to part with their liquid control over it” [9] and for Keynes, the interest rate influences the d ...
... money in exchange for a debt for a stated period of time. Thus the rate of interest at any time, being the reward for parting with liquidity, is a measure of the unwillingness of those who possess money to part with their liquid control over it” [9] and for Keynes, the interest rate influences the d ...
Mohan Bijapur Are credit crunches supply or demand shocks?
... recent decades. However, the inflation response has become weaker. We interpret these findings in the context of the broader debate on the causes of the “Great Moderation”. Our results also inform the ongoing policy debate during the global credit crunch. A key question being raised by policymakers ...
... recent decades. However, the inflation response has become weaker. We interpret these findings in the context of the broader debate on the causes of the “Great Moderation”. Our results also inform the ongoing policy debate during the global credit crunch. A key question being raised by policymakers ...
Credit and business cycles in Greece: Is there any relationship?
... http://dx.doi.org/10.1016/j.econmod.2013.01.036 ...
... http://dx.doi.org/10.1016/j.econmod.2013.01.036 ...
Has durable goods spending become less sensitive to interest rates?
... that prevailed during typical recoveries in the past, declining real interest rates in the current recovery could have provided a stronger boost to durable goods spending. This spending, in turn, could have contributed more strongly to real GDP growth a few years into the recovery, when interest rat ...
... that prevailed during typical recoveries in the past, declining real interest rates in the current recovery could have provided a stronger boost to durable goods spending. This spending, in turn, could have contributed more strongly to real GDP growth a few years into the recovery, when interest rat ...
What has Happened to Monetarism? An Investigation into the
... attributed to serious mistakes by the Federal Reserve (Friedman and Schwartz 1963b).(1) Another related empirical motivation for Friedman's attack on Keynesianism stemmed from research on consumption. Friedman's published Ph. D. dissertation "Income From Independent Professional Practice" was co-aut ...
... attributed to serious mistakes by the Federal Reserve (Friedman and Schwartz 1963b).(1) Another related empirical motivation for Friedman's attack on Keynesianism stemmed from research on consumption. Friedman's published Ph. D. dissertation "Income From Independent Professional Practice" was co-aut ...
Document
... (a) did not apply to money in its role as a medium of exchange. (b) failed to explain completely actual changes in real money balances. (c) assumed that prices did not change. (d) assumed that the stock of money did not change. The demand for money for transactions is (a) independent of the price le ...
... (a) did not apply to money in its role as a medium of exchange. (b) failed to explain completely actual changes in real money balances. (c) assumed that prices did not change. (d) assumed that the stock of money did not change. The demand for money for transactions is (a) independent of the price le ...
Chapter 15 Monetary Policy
... 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 ...
Modern Macroeconomics and Monetary Policy (15th ed.)
... • The Keynesian view dominated during the 1950s and 1960s. • Keynesians argued that money supply did not matter much. • Monetarists challenged the Keynesian view during the 1960s and 1970s. • Monetarists argued that changes in the money supply caused both inflation and economic instability. • While ...
... • The Keynesian view dominated during the 1950s and 1960s. • Keynesians argued that money supply did not matter much. • Monetarists challenged the Keynesian view during the 1960s and 1970s. • Monetarists argued that changes in the money supply caused both inflation and economic instability. • While ...
2-04 Money and Inflation
... economies, a central bank is responsible for controlling the supply of money. 2. The quantity theory of money assumes that the velocity of money is stable and concludes that nominal GDP is proportional to the stock of money. – the quantity theory implies that the price level is proportional to the q ...
... economies, a central bank is responsible for controlling the supply of money. 2. The quantity theory of money assumes that the velocity of money is stable and concludes that nominal GDP is proportional to the stock of money. – the quantity theory implies that the price level is proportional to the q ...
C - MyWeb
... If firms react to unplanned inventory reductions by increasing output, an economy with planned spending greater than output will adjust to equilibrium, with Y higher than before. If planned spending is less than output, there will be unplanned increases in inventories. In this case, firms will respo ...
... If firms react to unplanned inventory reductions by increasing output, an economy with planned spending greater than output will adjust to equilibrium, with Y higher than before. If planned spending is less than output, there will be unplanned increases in inventories. In this case, firms will respo ...
AP Macro Economics 2005 Section I MACROECONOMICS Section I
... B. the Internal Revenue Service spends more than it collects in taxes in a given year C. the federal government spends more than it collects in taxes in a given year D. high levels of unemployment use up tax collections E. interest payments on the national debt increase from one year to the next 6 U ...
... B. the Internal Revenue Service spends more than it collects in taxes in a given year C. the federal government spends more than it collects in taxes in a given year D. high levels of unemployment use up tax collections E. interest payments on the national debt increase from one year to the next 6 U ...
Booms and banking crises - Bank for International Settlements
... lem in this market as borrowing banks can always divert some of the funds towards low return assets that cannot be recovered by the lending banks. The incentives for diversion are stronger for less productive banks and depend on the level of interest rates in the economy. The lower the return on co ...
... lem in this market as borrowing banks can always divert some of the funds towards low return assets that cannot be recovered by the lending banks. The incentives for diversion are stronger for less productive banks and depend on the level of interest rates in the economy. The lower the return on co ...
The Classical View
... instability thus comes into sharp focus. Mainstream economists view the instability of investment as the main cause of the economy’s instability. They see monetary policy as a stabilizing factor. Changes in the money supply raise or lower interest rates as needed, smooth out swings in investment, an ...
... instability thus comes into sharp focus. Mainstream economists view the instability of investment as the main cause of the economy’s instability. They see monetary policy as a stabilizing factor. Changes in the money supply raise or lower interest rates as needed, smooth out swings in investment, an ...
Chapter 14
... without causing a reduction in one of the four components of total expenditures (consumption, investment, government purchases, or net exports). This point is important because someone might ask, “Can’t government purchases continually increase and so cause continued inflation?” This is unlikely f ...
... without causing a reduction in one of the four components of total expenditures (consumption, investment, government purchases, or net exports). This point is important because someone might ask, “Can’t government purchases continually increase and so cause continued inflation?” This is unlikely f ...
Macroeconomics Chapter 13W Disputes Over Macro Theory and
... the Federal Reserve Act to provide liquidity to the banking system. The Great Contraction is tragic testimony to the power of monetary policy—not, as Keynes and so many of his contemporaries believed, evidence of its impotence.1 ...
... the Federal Reserve Act to provide liquidity to the banking system. The Great Contraction is tragic testimony to the power of monetary policy—not, as Keynes and so many of his contemporaries believed, evidence of its impotence.1 ...
Chapter 21 The IS
... The equation (IS), known as the IS equation, asserts clearing in a ‡ow market: so much output per time unit matches the e¤ective demand per time unit for this output. The name comes from an alternative way of writing it, namely as I = S (investment = saving, where saving S = Y C G "D ): In contrast, ...
... The equation (IS), known as the IS equation, asserts clearing in a ‡ow market: so much output per time unit matches the e¤ective demand per time unit for this output. The name comes from an alternative way of writing it, namely as I = S (investment = saving, where saving S = Y C G "D ): In contrast, ...
How Powerful Is Monetary Policy in the Long Run?
... The Keynesians and Money: The First Time Around. The first nonclassical macroeconomic theory was the creation of John Maynard Keynes and is laid out in his General Theory (1936). One of Keynes’s principal goals was to identify the causes of the persistently high rates of unemployment that were affli ...
... The Keynesians and Money: The First Time Around. The first nonclassical macroeconomic theory was the creation of John Maynard Keynes and is laid out in his General Theory (1936). One of Keynes’s principal goals was to identify the causes of the persistently high rates of unemployment that were affli ...
From real business cycle and new Keynesian to DSGE
... consensus, in Section 1 I first discuss the common understanding of what a cyclical fluctuation is that new Keynesians and RBC macroeconomists share. I also stress the idea that became increasingly important in mainstream macroeconomics: that business cycle models ought to account for some “stylized ...
... consensus, in Section 1 I first discuss the common understanding of what a cyclical fluctuation is that new Keynesians and RBC macroeconomists share. I also stress the idea that became increasingly important in mainstream macroeconomics: that business cycle models ought to account for some “stylized ...
Axel A Weber: The role of interest rates in theory and practice
... It is obvious that interest rates play a key role in monetary policy today. On the one hand, the instrument of most central banks is a short-term interest rate. On the other, interest rates contain important information on the current state of the economy, and the extent to which past monetary polic ...
... It is obvious that interest rates play a key role in monetary policy today. On the one hand, the instrument of most central banks is a short-term interest rate. On the other, interest rates contain important information on the current state of the economy, and the extent to which past monetary polic ...
What Is a Business Cycle? - Pearson Higher Education
... interest rates to rise – Some economists see the rise in interest rates as a natural phenomenon that the Fed should not prevent – But the case for seasonal monetary policy is based on preventing bank panics (as occurred frequently from 1890 to 1910) and reducing transactions costs (which arise becau ...
... interest rates to rise – Some economists see the rise in interest rates as a natural phenomenon that the Fed should not prevent – But the case for seasonal monetary policy is based on preventing bank panics (as occurred frequently from 1890 to 1910) and reducing transactions costs (which arise becau ...