Chapter 14
... If aggregate demand increases by less than expected, inflation is less than expected. Money wages rise too much and the SAS curve shifts leftward more than the AD curve shifts rightward. ...
... If aggregate demand increases by less than expected, inflation is less than expected. Money wages rise too much and the SAS curve shifts leftward more than the AD curve shifts rightward. ...
Chapter 12 Keynesian Business Cycle Theory: The Sticky Price Model
... 39) Changes in the money supply in the Keynesian sticky wage model is not a likely explanation of the typical business cycle because the model counterfactually predicts that A) consumption is procyclical and the price level is procyclical. B) the price level is procyclical and the real wage is count ...
... 39) Changes in the money supply in the Keynesian sticky wage model is not a likely explanation of the typical business cycle because the model counterfactually predicts that A) consumption is procyclical and the price level is procyclical. B) the price level is procyclical and the real wage is count ...
Inflation Targeting and Inflation Prospects in Canada
... Ö Inflation targeting countries tend to be better anchored than non-inflation targeting countries ...
... Ö Inflation targeting countries tend to be better anchored than non-inflation targeting countries ...
University of Lethbridge — Department of Economics
... 9) An increase in the price level due to an increase in the price of oil A) leads to an increase in the money wage rate. B) creates stagflation in the short-run and will trigger a cost-push inflation. C) increases output above potential GDP. D) leads to a decrease in the money wage rate. E) creates ...
... 9) An increase in the price level due to an increase in the price of oil A) leads to an increase in the money wage rate. B) creates stagflation in the short-run and will trigger a cost-push inflation. C) increases output above potential GDP. D) leads to a decrease in the money wage rate. E) creates ...
does consumer price index represent the actual rate of inflation?
... The value of a dollar does not stay constant when there is inflation. The value of a dollar is observed in terms of purchasing power, which is the real, tangible goods that money can buy. When inflation goes up, there is a decline in the purchasing power of money. For example, if the inflation rate ...
... The value of a dollar does not stay constant when there is inflation. The value of a dollar is observed in terms of purchasing power, which is the real, tangible goods that money can buy. When inflation goes up, there is a decline in the purchasing power of money. For example, if the inflation rate ...
1) The objectives of the Federal Reserve in its conduct of monetary
... (d) The discount rate Answer: Question Status: Previous Edition ...
... (d) The discount rate Answer: Question Status: Previous Edition ...
... the domestic price level is described by a 45o line, and in which the exchange rate and the price level both continue to adjust until they eliminate any gap between movements away from equilibrium among the domestic money supply, domestic price level, and nominal exchange rate. If macroeconomic adju ...
If GT =0, Debt/GDP increases if the r > growth rate of GDP
... thereby private investment, aggregate demand and output. 9.1.2B. The small open economy with its own currency. The interest rate is fixed but the exchange rate is flexible. Main lesson: Fiscal policy is less effective in a small open economy. Increased government spending or lower net taxes increase ...
... thereby private investment, aggregate demand and output. 9.1.2B. The small open economy with its own currency. The interest rate is fixed but the exchange rate is flexible. Main lesson: Fiscal policy is less effective in a small open economy. Increased government spending or lower net taxes increase ...
Quantitative Easing in Joseph`s Egypt with Keynesian Producers
... given a fixed real interest rate and the rational anticipation that consumption will equal its flexible-price level when the shock to desired savings has passed. With storage, future consumption is a free variable. This allows the static coordination game’s multiplicity to manifest itself in a dynam ...
... given a fixed real interest rate and the rational anticipation that consumption will equal its flexible-price level when the shock to desired savings has passed. With storage, future consumption is a free variable. This allows the static coordination game’s multiplicity to manifest itself in a dynam ...
Should Monetary Policy Target Labor’s Share of Income?
... changes in the VAR that is used to forecast future labor’s share values. For a broad range of reasonable specifications of this VAR, the model’s fit is actually quite poor. Second, we re-examine the evidence in Sbordone (1998). While this paper did not, in fact, compare the relative fits of inflatio ...
... changes in the VAR that is used to forecast future labor’s share values. For a broad range of reasonable specifications of this VAR, the model’s fit is actually quite poor. Second, we re-examine the evidence in Sbordone (1998). While this paper did not, in fact, compare the relative fits of inflatio ...
Modelling, simulation and control of macro economic systems.
... The assignment in this report is motivated by the current financial crisis, which equally, or maybe even more accurately should be called a debt crisis. The research problem to be solved in this report is therefore to assess four conceptual different macroeconomic systems, including today’s Basel-ty ...
... The assignment in this report is motivated by the current financial crisis, which equally, or maybe even more accurately should be called a debt crisis. The research problem to be solved in this report is therefore to assess four conceptual different macroeconomic systems, including today’s Basel-ty ...
Sticky Price Models, Durable Goods, and Real Wage
... of a monetary shock (see, for example, BHK 2003, Erceg and Levin 2006, Monacelli 2009). Two stylized facts are that (i) aggregate output and sectoral outputs move together, and (ii) the response of the durable output is stronger in comparison to the responses of nondurables and aggregate output. Mor ...
... of a monetary shock (see, for example, BHK 2003, Erceg and Levin 2006, Monacelli 2009). Two stylized facts are that (i) aggregate output and sectoral outputs move together, and (ii) the response of the durable output is stronger in comparison to the responses of nondurables and aggregate output. Mor ...
Re-Targeting the Fed
... then a poor country could develop its economy by simply printing more money. Zimbabwe would be the wealthiest country in the world. But for a little while, nominal and real GDP do move together. These relationships among real GDP, nominal GDP, and inflation yield a standard model of macroeconomics. ...
... then a poor country could develop its economy by simply printing more money. Zimbabwe would be the wealthiest country in the world. But for a little while, nominal and real GDP do move together. These relationships among real GDP, nominal GDP, and inflation yield a standard model of macroeconomics. ...
Costs and Benefits of Dollarization
... facility for business operations, in 1948 confirmed the importance of international goods and financial markets in Panama.8 As noted earlier, one of the expected benefits of dollarization is stability in terms of output and prices. Looking at the last decade’s performance, Panama’s economy shows an ...
... facility for business operations, in 1948 confirmed the importance of international goods and financial markets in Panama.8 As noted earlier, one of the expected benefits of dollarization is stability in terms of output and prices. Looking at the last decade’s performance, Panama’s economy shows an ...
NBER WORKING PAPER SERIES IMPORTED MATERIAlS PRICES, WAGE POLICY, AND MACROECONOMIC STABILIZATION
... in terms of employment and price behavior. But against these must be weighed the costs of alternative policies, as the analysis makes clear. Only when these costs are taken into account can sensible decisions about wage indexation and employment policy be made. The setting of this analysis is a smal ...
... in terms of employment and price behavior. But against these must be weighed the costs of alternative policies, as the analysis makes clear. Only when these costs are taken into account can sensible decisions about wage indexation and employment policy be made. The setting of this analysis is a smal ...
Financial imbalances and financial fragility - ECB
... the market return. For example, in a low market return environment even ine¢cient banks may prefer to borrow and operate on their retail loan market rather than lend on the interbank market, and so low interest rates arouse counterparty fear. Multiple self-ful…lling equilibria arise from lenders’ be ...
... the market return. For example, in a low market return environment even ine¢cient banks may prefer to borrow and operate on their retail loan market rather than lend on the interbank market, and so low interest rates arouse counterparty fear. Multiple self-ful…lling equilibria arise from lenders’ be ...
An Aggregative Theory for a Closed Economy
... between money and a narrow range of financial assets called bonds. Metzler's financial asset is a composite representing claims to real capital. Bonds are perfect substitutes for such claims, and interest rates are the yield per period of a unit of real capital. In Metzler's analysis real resources ...
... between money and a narrow range of financial assets called bonds. Metzler's financial asset is a composite representing claims to real capital. Bonds are perfect substitutes for such claims, and interest rates are the yield per period of a unit of real capital. In Metzler's analysis real resources ...
Liquid assets, liquidity constraints and global imbalances
... has recognized that in a stochastic environment, current-account balance determination largely depends on the extent to which markets exist for insuring against shocks. In the case where insurance markets exist for all future contingencies, with outcome fully verifiable and contract fully enforceabl ...
... has recognized that in a stochastic environment, current-account balance determination largely depends on the extent to which markets exist for insuring against shocks. In the case where insurance markets exist for all future contingencies, with outcome fully verifiable and contract fully enforceabl ...
Chapter 29
... All the other influences on production plans remain constant. Among these other influences are • The money wage rate • The money prices of other resources In contrast, along the potential GDP line, when the price level changes the money wage rate changes to keep the real wage rate at the full-employ ...
... All the other influences on production plans remain constant. Among these other influences are • The money wage rate • The money prices of other resources In contrast, along the potential GDP line, when the price level changes the money wage rate changes to keep the real wage rate at the full-employ ...
Chapter 10 Classical Business Cycle Analysis
... The idea that expected future increases in output cause increases in the current money supply and that expected future decreases in output cause decreases in the current money supply, rather than the other way around, is known as (a) Granger causality. (b) money neutrality. (c) nominal adjustment. ( ...
... The idea that expected future increases in output cause increases in the current money supply and that expected future decreases in output cause decreases in the current money supply, rather than the other way around, is known as (a) Granger causality. (b) money neutrality. (c) nominal adjustment. ( ...
Document
... Combining a monetary policy rule with the IS curve leads to an aggregate demand (AD) curve, which describes how the central bank chooses the level of short-run output based on the current rate of inflation. The aggregate supply (AS) curve, another name for the Phillips curve, tells us that the ...
... Combining a monetary policy rule with the IS curve leads to an aggregate demand (AD) curve, which describes how the central bank chooses the level of short-run output based on the current rate of inflation. The aggregate supply (AS) curve, another name for the Phillips curve, tells us that the ...