money and production, and liquidity trap
... As for the liquidity trap, Grandmont showed quite generally in his model that as the monetary authority drove the interest rate to zero in the first period it would necessarily be led to increase the stock of bank money (M0 in our model) to infinity. We reach the opposite conclusion. We show that if ...
... As for the liquidity trap, Grandmont showed quite generally in his model that as the monetary authority drove the interest rate to zero in the first period it would necessarily be led to increase the stock of bank money (M0 in our model) to infinity. We reach the opposite conclusion. We show that if ...
Y2K, The Fed, And Other Unknowns
... think that the origins of the financial and economic downturns can be traced back to events surrounding Y2K. Our nation's central bank, the Fed, had to take some very contradictory actions in 1999 as a result of Y2K. Citing concerns over the possibility of price inflation (although it did not actual ...
... think that the origins of the financial and economic downturns can be traced back to events surrounding Y2K. Our nation's central bank, the Fed, had to take some very contradictory actions in 1999 as a result of Y2K. Citing concerns over the possibility of price inflation (although it did not actual ...
Research Technical Paper MONEY AND UNCERTAINTY IN
... The expanding role of money as the only safe store of value in periods of financial turbulence has enhanced money’s role as a buffer in the post-democratisation period. Money holders may therefore be increasingly hesitant in adjusting their money balances to equilibrium following a shock. We would t ...
... The expanding role of money as the only safe store of value in periods of financial turbulence has enhanced money’s role as a buffer in the post-democratisation period. Money holders may therefore be increasingly hesitant in adjusting their money balances to equilibrium following a shock. We would t ...
F with an interest rate
... equilibrium output is $10,000 billion, which is the full-employment output level. Then, in panel (b), the AE line shifts downward because of a decrease in some sector’s spending. With no change in Fed policy, output would fall from $10,000 billion to $9,000 billion (point F). To prevent this recessi ...
... equilibrium output is $10,000 billion, which is the full-employment output level. Then, in panel (b), the AE line shifts downward because of a decrease in some sector’s spending. With no change in Fed policy, output would fall from $10,000 billion to $9,000 billion (point F). To prevent this recessi ...
SP166: Broad Money vs. Narrow Money: A Discussion Following the Federal Reserve's Decision to Discontinue Publication of M3 Data
... his view, the monetary data serve as a cross-check on inflation forecasts prepared by other methods. Although the ECB – like the Bundesbank before it – has traditionally focussed on the M3 aggregate, Issing said that the work is more wide-ranging. In his words, “Monetary analysis goes beyond focussi ...
... his view, the monetary data serve as a cross-check on inflation forecasts prepared by other methods. Although the ECB – like the Bundesbank before it – has traditionally focussed on the M3 aggregate, Issing said that the work is more wide-ranging. In his words, “Monetary analysis goes beyond focussi ...
NBER WORKING PAPER SERIES MONETARY POLICY IN THE INFORMATION ECONOMY Michael Woodford
... of modest size if these trades are not signalled in advance. This is the usual justification given for the fact that official interventions in foreign-exchange markets are almost invariably secret, in some cases not being confirmed even after the interventions have taken place. But a similar argume ...
... of modest size if these trades are not signalled in advance. This is the usual justification given for the fact that official interventions in foreign-exchange markets are almost invariably secret, in some cases not being confirmed even after the interventions have taken place. But a similar argume ...
The Effectiveness of Open Market Operations in Monetary
... Lesotho, Swaziland and Namibia are the MEFMI countries that peg their currencies to the South African Rand under the Common Monetary Area (CMA).The CMA arrangement has its roots in a de facto currency union. In 1921, after the establishment of the South African Reserve Bank (SARB), the ...
... Lesotho, Swaziland and Namibia are the MEFMI countries that peg their currencies to the South African Rand under the Common Monetary Area (CMA).The CMA arrangement has its roots in a de facto currency union. In 1921, after the establishment of the South African Reserve Bank (SARB), the ...
SP174: Does high money growth put the inflation target at further risk?
... invariance premise does hold for an all-inclusive measure of money, because by definition money-into-money transactions are impossible for such a measure.19 In short, a large body of theory argues that the desired ratio of money to income is likely to be stable. The ratio may change over the long ru ...
... invariance premise does hold for an all-inclusive measure of money, because by definition money-into-money transactions are impossible for such a measure.19 In short, a large body of theory argues that the desired ratio of money to income is likely to be stable. The ratio may change over the long ru ...
This PDF is a selection from an out-of-print volume from... of Economic Research
... Interestingly, Sir Alec Cairncross (1954), not noted for his emphasis on monetary explanations, in his review of the first edition was critical of the lack of consideration given to monetary causes: These minor cycles of the late ’twenties and early ’thirties seem quite plainly to have petered out b ...
... Interestingly, Sir Alec Cairncross (1954), not noted for his emphasis on monetary explanations, in his review of the first edition was critical of the lack of consideration given to monetary causes: These minor cycles of the late ’twenties and early ’thirties seem quite plainly to have petered out b ...
Collateral Constraints in a Monetary Economy
... The measure of borrowers is normalized to one. Their technology is given by the production function yt = (a + c)kt−1 . They choose sequences of consumption {xt }, capital holdings {kt }, nominal money balances {mdt }, private issued bonds {bt }, and government-bonds purchases {ht } to solve the foll ...
... The measure of borrowers is normalized to one. Their technology is given by the production function yt = (a + c)kt−1 . They choose sequences of consumption {xt }, capital holdings {kt }, nominal money balances {mdt }, private issued bonds {bt }, and government-bonds purchases {ht } to solve the foll ...
Workings of A Public Money System of Open Macroeconomies
... a simplified closed macroeconomic system in which no labor market exists. Accordingly, the purpose of this paper is to expand the previous simple macroeconomic system to complete open macroeconomies in which labor market and foreign exchange market exist, and analyze if similar results could be obtai ...
... a simplified closed macroeconomic system in which no labor market exists. Accordingly, the purpose of this paper is to expand the previous simple macroeconomic system to complete open macroeconomies in which labor market and foreign exchange market exist, and analyze if similar results could be obtai ...
monetary policy and long term interest rate in south africa
... developments through which a change in monetary policy stance is transmitted to achieve goals such as stable and low inflation and economic growth (Mishkin, 1995). The key channel through which monetary policy actions are transmitted to the economy is through their effects on market interest rates ( ...
... developments through which a change in monetary policy stance is transmitted to achieve goals such as stable and low inflation and economic growth (Mishkin, 1995). The key channel through which monetary policy actions are transmitted to the economy is through their effects on market interest rates ( ...
Post Keynesian Monetary Economics: A Critical Survey
... the actual quantity of the stuff in existence at any moment does not. The endogenous money theme, however, clearly sets up a tension with those of Keynes’s arguments in The General Theory which presuppose an exogenous money stock. While some post Keynesians are willing to argue that Keynes was simpl ...
... the actual quantity of the stuff in existence at any moment does not. The endogenous money theme, however, clearly sets up a tension with those of Keynes’s arguments in The General Theory which presuppose an exogenous money stock. While some post Keynesians are willing to argue that Keynes was simpl ...
THE RELATIONSHIP BETWEEN PRICE LEVEL, MONEY SUPPLY
... inflation rate of 100%. The next cost of inflation is the distortion of productive decisions because of uncertainty in the future relative prices, which are crucial for planning investment expenditures. Finally, because taxes are rarely indexed for inflation, higher taxation results from inflation. ...
... inflation rate of 100%. The next cost of inflation is the distortion of productive decisions because of uncertainty in the future relative prices, which are crucial for planning investment expenditures. Finally, because taxes are rarely indexed for inflation, higher taxation results from inflation. ...
Monetary Policy in the Information Economy
... component of the current money supply. They also assume that policymakers wish to increase output relative to potential, and to an extent that varies over time as a result of real disturbances. Rational expectations preclude the possibility of an equilibrium in which money growth is higher than expe ...
... component of the current money supply. They also assume that policymakers wish to increase output relative to potential, and to an extent that varies over time as a result of real disturbances. Rational expectations preclude the possibility of an equilibrium in which money growth is higher than expe ...
Kein Folientitel - Startseite
... bond and foreign exchange markets and through the presence of large commercial banks). • The FRBNY is the only US Reserve Bank to be a member of the Bank for International Settlements (BIS). • Its president assumes a chief role in the system. Paul Bernd Spahn, Goethe-Universität Frankfurt/Main ...
... bond and foreign exchange markets and through the presence of large commercial banks). • The FRBNY is the only US Reserve Bank to be a member of the Bank for International Settlements (BIS). • Its president assumes a chief role in the system. Paul Bernd Spahn, Goethe-Universität Frankfurt/Main ...
Political Pressures on Monetary Policy During the U.S. Great Inflation
... economy would avoid recession, Chairman Martin argued that the Fed needed to sustain its policy, even at the risk of higher unemployment, until inflation expectations were broken. In July, for example, Martin responded to concerns about the weakening economy by arguing that “inflationary psychology ...
... economy would avoid recession, Chairman Martin argued that the Fed needed to sustain its policy, even at the risk of higher unemployment, until inflation expectations were broken. In July, for example, Martin responded to concerns about the weakening economy by arguing that “inflationary psychology ...
Keynes and the Endogeneity of Money Fernando J. Cardim de
... Money is an efficient hedge instrument because it is the most liquid of assets. As the unit of account for contracts, the value of money as a debt settlement vehicle is fixed.3 As legal tender, it is convertible at any other good or service, on demand.4 But an asset being liquid means that the holde ...
... Money is an efficient hedge instrument because it is the most liquid of assets. As the unit of account for contracts, the value of money as a debt settlement vehicle is fixed.3 As legal tender, it is convertible at any other good or service, on demand.4 But an asset being liquid means that the holde ...
NBER WORKING PAPER SERIES MONEY GROWTH AND INTEREST RATES Seok-Kyun Hur Working Paper
... the higher order moments of money supply can influence the term structure of interest rates. Extended from a traditional Cash-in-Advance model of Lucas and Stokey(1987), a general m-period-ahead CIA condition is imposed. The adoption of CIA feature is critical because it, combined with the assumpti ...
... the higher order moments of money supply can influence the term structure of interest rates. Extended from a traditional Cash-in-Advance model of Lucas and Stokey(1987), a general m-period-ahead CIA condition is imposed. The adoption of CIA feature is critical because it, combined with the assumpti ...
Policy Instrument Choice and Non-Coordinated Monetary Policy in
... distinguishes it from the issue we are investigating in this paper, is the focus on non-state-contingent rules for the monetary policy instrument. Thus the earlier literature focused on a policy of fixing the quantity of money as compared to a policy of fixing the nominal interest rate. In this pap ...
... distinguishes it from the issue we are investigating in this paper, is the focus on non-state-contingent rules for the monetary policy instrument. Thus the earlier literature focused on a policy of fixing the quantity of money as compared to a policy of fixing the nominal interest rate. In this pap ...
Principles of Economics, Case and Fair,9e
... CHAPTER OUTLINE Interest Rates and Bond Prices The Demand for Money The Transaction Motive The Speculation Motive The Total Demand for Money The Effects of Income and the Price Level on the Demand for Money The Equilibrium Interest Rate Supply and Demand in the Money Market Changing the Money Supply ...
... CHAPTER OUTLINE Interest Rates and Bond Prices The Demand for Money The Transaction Motive The Speculation Motive The Total Demand for Money The Effects of Income and the Price Level on the Demand for Money The Equilibrium Interest Rate Supply and Demand in the Money Market Changing the Money Supply ...
One Nation Under the Fed? The Asymmetric Effects of U.S.
... and Rocky Mountain regions—is the least affected. Owyang and Wall (2006) estimate the impact of monetary policy shocks on 19 sub-BEA regions. These regions consist of two to four states each and are all estimated in one VAR. Here, the VAR includes real personal income, the CPI, the federal funds rat ...
... and Rocky Mountain regions—is the least affected. Owyang and Wall (2006) estimate the impact of monetary policy shocks on 19 sub-BEA regions. These regions consist of two to four states each and are all estimated in one VAR. Here, the VAR includes real personal income, the CPI, the federal funds rat ...
The stability of money demand: Evidence from Turkey
... possible to assume that money supply is exogenous. The changes in the postulates such that instable velocity, financial innovations, expectations, and preferences lead to the rejection of the quantity theory and result in the theory of an endogenous money supply. The theory of endogeneity of money s ...
... possible to assume that money supply is exogenous. The changes in the postulates such that instable velocity, financial innovations, expectations, and preferences lead to the rejection of the quantity theory and result in the theory of an endogenous money supply. The theory of endogeneity of money s ...
Chapter 20 Money Growth, Money Demand, and Modern Monetary
... • Limit banks’ discretion in creating money, and • Tighten the relationship between the monetary aggregates and the monetary base, reducing fluctuations in the money multiplier. ...
... • Limit banks’ discretion in creating money, and • Tighten the relationship between the monetary aggregates and the monetary base, reducing fluctuations in the money multiplier. ...
- Economic Thought
... So the question then becomes, what are these units measuring? Economists have usually answered this, when pressed, by saying that it measures some quantity such as ‘labour’ (classical economics – see Smith, The Wealth of Nations) or ‘utility’ (neoclassical economics – see Jevons, 1957). But another ...
... So the question then becomes, what are these units measuring? Economists have usually answered this, when pressed, by saying that it measures some quantity such as ‘labour’ (classical economics – see Smith, The Wealth of Nations) or ‘utility’ (neoclassical economics – see Jevons, 1957). But another ...