THE IMPORTANCE OF STABLE MONEY: THEORY AND EVIDENCE
... requisite for the pursuit of successful countercyclical policies or for fine-tuning, Furthermore, in his view, even well-meaning monetary authorities were likely to respond to political influences. Politically advantageous, short-run actions by the authorities would ignore the long-run destabilizing ...
... requisite for the pursuit of successful countercyclical policies or for fine-tuning, Furthermore, in his view, even well-meaning monetary authorities were likely to respond to political influences. Politically advantageous, short-run actions by the authorities would ignore the long-run destabilizing ...
Chapter 3 - Test Bank 1
... indirectly. For example, if the investor is a business firm, a direct transfer takes place when savers purchase the securities (stocks or debt instruments) of the business firm by exchanging money for the firm’s securities. An indirect transfer between savers and a business firm can take place eithe ...
... indirectly. For example, if the investor is a business firm, a direct transfer takes place when savers purchase the securities (stocks or debt instruments) of the business firm by exchanging money for the firm’s securities. An indirect transfer between savers and a business firm can take place eithe ...
T
... important in determining the cost of disinflations. the inflation rate. But this paper looks at the ongoing effect of a particular monetary policy rule on the sacrifice ratio. In this context, a larger sacrifice ratio means a larger output loss when the inflation target falls, but it also implies a ...
... important in determining the cost of disinflations. the inflation rate. But this paper looks at the ongoing effect of a particular monetary policy rule on the sacrifice ratio. In this context, a larger sacrifice ratio means a larger output loss when the inflation target falls, but it also implies a ...
File
... • Depository institutions generally pay interest on the deposits people leave with them • The deposits are used to make loans, on which they charge an even higher rate of interest • They also make money by charging various fees for services, such as overdraft protection ...
... • Depository institutions generally pay interest on the deposits people leave with them • The deposits are used to make loans, on which they charge an even higher rate of interest • They also make money by charging various fees for services, such as overdraft protection ...
The Equilibrium Interest Rate
... Prime Rate A benchmark that banks often use in quoting interest rates to their customers depending on the cost of funds to the bank; it moves up and down with changes in the economy. AAA Corporate Bond Rate Classified by various bond dealers according to their risk. Bonds have a longer maturity than ...
... Prime Rate A benchmark that banks often use in quoting interest rates to their customers depending on the cost of funds to the bank; it moves up and down with changes in the economy. AAA Corporate Bond Rate Classified by various bond dealers according to their risk. Bonds have a longer maturity than ...
Chapter 12
... • Depository institutions generally pay interest on the deposits people leave with them • The deposits are used to make loans, on which they charge an even higher rate of interest • They also make money by charging various fees for services, such as overdraft protection ...
... • Depository institutions generally pay interest on the deposits people leave with them • The deposits are used to make loans, on which they charge an even higher rate of interest • They also make money by charging various fees for services, such as overdraft protection ...
Principles of Economics, Case and Fair,9e
... speculation motive One reason for holding bonds instead of money: Because the market price of interest-bearing bonds is inversely related to the interest rate, investors may want to hold bonds when interest rates are high with the hope of selling them when interest rates fall. ...
... speculation motive One reason for holding bonds instead of money: Because the market price of interest-bearing bonds is inversely related to the interest rate, investors may want to hold bonds when interest rates are high with the hope of selling them when interest rates fall. ...
SPEECH 29/11/2011 Deputy Governor Lars E.O. Svensson
... taking the conduct of financial-stability policy into account, and vice versa. This is similar to how monetary policy is conducted taking fiscal policy into account, and vice versa. Importantly, under normal conditions, financial stability is handled by financial-stability policy, not by monetary po ...
... taking the conduct of financial-stability policy into account, and vice versa. This is similar to how monetary policy is conducted taking fiscal policy into account, and vice versa. Importantly, under normal conditions, financial stability is handled by financial-stability policy, not by monetary po ...
File - Business at Sias
... Friedman’s Modern Quantity Theory of Money • Applies the theory of asset demand to money • Theory of asset demand indicates that the demand for money is a function of their wealth and the expected returns on other assets relative to the expected return on money • Also recognized that people want to ...
... Friedman’s Modern Quantity Theory of Money • Applies the theory of asset demand to money • Theory of asset demand indicates that the demand for money is a function of their wealth and the expected returns on other assets relative to the expected return on money • Also recognized that people want to ...
Monetary policy and the transaction role of money in the United States
... interest rate policy to indeterminacy. We estimate the model twice – using U.S. data before Volcker and data after 1982. Our main result is that interest rate policy before Volcker was passive but still ensured determinacy because money played an important role in facilitating transactions. Consiste ...
... interest rate policy to indeterminacy. We estimate the model twice – using U.S. data before Volcker and data after 1982. Our main result is that interest rate policy before Volcker was passive but still ensured determinacy because money played an important role in facilitating transactions. Consiste ...
NBER WORKING PAPER SERIES ON ACTIVIST MONETARY POLICY WITH RATIONAL EXPECTATIONS Stanley Fischer
... in the expected rate of inflation change the ecpected real return from the holding of money, affecting the demand f or real balances, and creating ...
... in the expected rate of inflation change the ecpected real return from the holding of money, affecting the demand f or real balances, and creating ...
Theoretical Analysis of the Demand for Money
... form solution analogous to (9) will exist. Nevertheless, the portfolio-balance relation (12) will continue to hold exactly as before, for the steps described in its derivation above remain the same except that it is E&3Xt+ ,(I+ nt + 1)- ‘1 that is eliminated between equations corresponding to (6) an ...
... form solution analogous to (9) will exist. Nevertheless, the portfolio-balance relation (12) will continue to hold exactly as before, for the steps described in its derivation above remain the same except that it is E&3Xt+ ,(I+ nt + 1)- ‘1 that is eliminated between equations corresponding to (6) an ...
MONEY, INCOME, AND CAUSALITY: AN EXAMINATION FOR THE
... lead to changes in income. Monetarists, therefore, suggest that a rule characterized by a constant growth of money supply must be used to stabilize income fluctuations (Friedman, 1959). The modern view of (short-run) monetary non-neutrality as expressed by the new-Classical economics, which emphasiz ...
... lead to changes in income. Monetarists, therefore, suggest that a rule characterized by a constant growth of money supply must be used to stabilize income fluctuations (Friedman, 1959). The modern view of (short-run) monetary non-neutrality as expressed by the new-Classical economics, which emphasiz ...
The Role of Monetary Policy
... quantity of money at a faster rate than it has been increasing is to make interest rates lower for a time than they would otherwise have been. But this is only the beginning of the process not the end. The more rapid rate of monetary growth will stimulate spending, both through the impact on investm ...
... quantity of money at a faster rate than it has been increasing is to make interest rates lower for a time than they would otherwise have been. But this is only the beginning of the process not the end. The more rapid rate of monetary growth will stimulate spending, both through the impact on investm ...
Money - Site BU
... state-issued currency. Yet the banknotes issued were still regionally valid and temporary; it was not until the mid 13th century that a standard and uniform government issue of paper money was made into an acceptable nationwide currency. The already widespread methods of woodblock printing and then ...
... state-issued currency. Yet the banknotes issued were still regionally valid and temporary; it was not until the mid 13th century that a standard and uniform government issue of paper money was made into an acceptable nationwide currency. The already widespread methods of woodblock printing and then ...
Methods of Monetary Control in Italy: 1974-1983 Cesare Caranza and Antonio Fazio*
... During the seventies the disequilibria in the industrial countries stemming from the raw material and labor markets, as well as high and variable inflation rates, undermined the use of interest rates as intermediate objectives, and encouraged the increasingly widespread use of monetary and credit ag ...
... During the seventies the disequilibria in the industrial countries stemming from the raw material and labor markets, as well as high and variable inflation rates, undermined the use of interest rates as intermediate objectives, and encouraged the increasingly widespread use of monetary and credit ag ...
Monetary Policy Regimes and Beliefs
... Lucas (1990) and Fuerst (1992) embed a ‘limited participation’ feature into an otherwise standard cash-in-advance model; this allows a monetary shock to differentially affect economic actors. The idea is that households are less frequently in contact with financial markets than the business sector. ...
... Lucas (1990) and Fuerst (1992) embed a ‘limited participation’ feature into an otherwise standard cash-in-advance model; this allows a monetary shock to differentially affect economic actors. The idea is that households are less frequently in contact with financial markets than the business sector. ...
Central Bank Forecasting: An International Comparison
... and partly as determined by the history of the variables appearing in a VAR. It is true that an exogenous policy shock may be identified through a VAR with some loose economic reasoning, but such shocks are rarely easy to relate to actual policy events (see Rudebusch 1998). Moreover, in practice VAR ...
... and partly as determined by the history of the variables appearing in a VAR. It is true that an exogenous policy shock may be identified through a VAR with some loose economic reasoning, but such shocks are rarely easy to relate to actual policy events (see Rudebusch 1998). Moreover, in practice VAR ...
The dangers and drawbacks of the "unconventional monetary policy
... easing. However, it’s quite clear that we would buy outright ABS, the senior tranches, and the mezzanine tranches only if there is a guarantee. In other words, very much like what the Fed did a few years ago. So there is also this component.”-Mario Draghi.1 The main goal of Quantitative Easing is to ...
... easing. However, it’s quite clear that we would buy outright ABS, the senior tranches, and the mezzanine tranches only if there is a guarantee. In other words, very much like what the Fed did a few years ago. So there is also this component.”-Mario Draghi.1 The main goal of Quantitative Easing is to ...
PDF
... Recently, these concerns have been compounded by a growing feeling that the monetary regime that has for so long served Uganda well but the reserve money framework is proving less successful in delivering low and stable inflation as the capital account has become more open. It can be argued that whi ...
... Recently, these concerns have been compounded by a growing feeling that the monetary regime that has for so long served Uganda well but the reserve money framework is proving less successful in delivering low and stable inflation as the capital account has become more open. It can be argued that whi ...
the conduct of monetary policy in uganda
... Recently, these concerns have been compounded by a growing feeling that the monetary regime that has for so long served Uganda well – the reserve money framework -- is proving less successful in delivering low and stable inflation as the capital account has becomes more open. I argue that while some ...
... Recently, these concerns have been compounded by a growing feeling that the monetary regime that has for so long served Uganda well – the reserve money framework -- is proving less successful in delivering low and stable inflation as the capital account has becomes more open. I argue that while some ...
Comment on Cavalcanti and Nosal`s `Counterfeiting as Private
... This comment could be titled “Disappointment.” Let me explain why after I brie‡y summarize the elegant paper by Ricardo Cavalcanti and Ed Nosal. In their world, agents meet bilaterally to conduct their business. They also need only one piece of paper –money –to trade, and they cannot hold more than ...
... This comment could be titled “Disappointment.” Let me explain why after I brie‡y summarize the elegant paper by Ricardo Cavalcanti and Ed Nosal. In their world, agents meet bilaterally to conduct their business. They also need only one piece of paper –money –to trade, and they cannot hold more than ...
Misunderstanding Debt
... money – there is no ‘real’ money. • In a systemic crisis the whole money system must be supported (Lehman Brothers) • State responsibility for the integrity of its national money means it has to continually bail out the privatised money system • Major problem if borrowings are in another currency or ...
... money – there is no ‘real’ money. • In a systemic crisis the whole money system must be supported (Lehman Brothers) • State responsibility for the integrity of its national money means it has to continually bail out the privatised money system • Major problem if borrowings are in another currency or ...
What Ended the Great Depression?
... 1 Temin and Wigmore, "End of One Big Deflation," for example, provided a convincing explanationfor the turningpoint in 1933but did not analyzethe process of recovery after 1934.A notable exception to this usual pattern is Bernstein, Great Depression, which analyzed the importanceof structuralchanges ...
... 1 Temin and Wigmore, "End of One Big Deflation," for example, provided a convincing explanationfor the turningpoint in 1933but did not analyzethe process of recovery after 1934.A notable exception to this usual pattern is Bernstein, Great Depression, which analyzed the importanceof structuralchanges ...
Adam Smith and the Monetary Approach to the Balance of Payments
... Equation 1 expresses the demand for money Md as a stable function of the product of domestic prices P and the level of real output Y, with the constant coefficient k being the fraction of nominal income PY that people desire to hold in the form of cash balances.2 The price level P is treated as give ...
... Equation 1 expresses the demand for money Md as a stable function of the product of domestic prices P and the level of real output Y, with the constant coefficient k being the fraction of nominal income PY that people desire to hold in the form of cash balances.2 The price level P is treated as give ...