Macro Risks and the Term Structure
... same direction and supply shocks which move inflation and GDP growth in opposite direction. We find that demand shocks exhibit pronounced skewness, driven, for instance, by spikes in bad volatility for demand shocks during the Great Recession. Supply shock variances are high during the seventies and ...
... same direction and supply shocks which move inflation and GDP growth in opposite direction. We find that demand shocks exhibit pronounced skewness, driven, for instance, by spikes in bad volatility for demand shocks during the Great Recession. Supply shock variances are high during the seventies and ...
THE HISTORY OF STAGFLATION: A REVIEW OF IRANIAN
... the control of wage and price and the energy crisis began in 1973, until his resignation. In chapter III, the United States stagflationary period and its cures will be discussed precisely. ...
... the control of wage and price and the energy crisis began in 1973, until his resignation. In chapter III, the United States stagflationary period and its cures will be discussed precisely. ...
FINALTERM EXAMINATION ECO401- Economics (Session
... The upward-sloping aggregate supply curve indicates that: ► As firms increase their level of output, the cost of producing an extra unit increases. ► An increase in aggregate demand causes little, if any increase in real output the economy is operating in the long run. ► Any increase in aggregate de ...
... The upward-sloping aggregate supply curve indicates that: ► As firms increase their level of output, the cost of producing an extra unit increases. ► An increase in aggregate demand causes little, if any increase in real output the economy is operating in the long run. ► Any increase in aggregate de ...
This PDF is a selec on from a published volume... Bureau of Economic Research
... behavior (which appeared as constraints in the policymaker optimization problem). Applications to the Great Inflation of the time-consistency or conservative-central-banker hypotheses can be thought of as quintessential examples of the “as-if ” approach. These stories attribute to policymakers’ know ...
... behavior (which appeared as constraints in the policymaker optimization problem). Applications to the Great Inflation of the time-consistency or conservative-central-banker hypotheses can be thought of as quintessential examples of the “as-if ” approach. These stories attribute to policymakers’ know ...
Study Guide for Williamson Intermediate Macroeconomics, First
... ___8. Crowding out occurs when increases in government expenditures cause decreases in private consumption and investment. ___9. Government savings is the difference between government spending and taxation. ___10. Inflation is ultimately determined by the rate of growth in money demand. ___11. Shor ...
... ___8. Crowding out occurs when increases in government expenditures cause decreases in private consumption and investment. ___9. Government savings is the difference between government spending and taxation. ___10. Inflation is ultimately determined by the rate of growth in money demand. ___11. Shor ...
Principles to be Learned
... fully employed so increases in prices cannot elicit more output. A change in the price level is reflected by a movement along the aggregate supply curve. Factors that can shift the aggregate supply curve include: changes in input costs, political events that impose supply constraints, natural disast ...
... fully employed so increases in prices cannot elicit more output. A change in the price level is reflected by a movement along the aggregate supply curve. Factors that can shift the aggregate supply curve include: changes in input costs, political events that impose supply constraints, natural disast ...
The Wizard Test Maker
... (A) Both result in an equal increase in the money supply. (B) The deposit of $100,000 results in a greater increase in the money supply. (C) The open-market purchase of $100,000 results in a greater increase in the money supply. (D) The deposit of $100,000 results in a greater increase in the money ...
... (A) Both result in an equal increase in the money supply. (B) The deposit of $100,000 results in a greater increase in the money supply. (C) The open-market purchase of $100,000 results in a greater increase in the money supply. (D) The deposit of $100,000 results in a greater increase in the money ...
Mankiw 5/e Chapter 11: Aggregate Demand II
... obtain financing for investment 3. Contractionary fiscal policy ...
... obtain financing for investment 3. Contractionary fiscal policy ...
The output gap and inflation - Bank for International Settlements
... to unity and a to zero such that inflation becomes indeterminate. This implies that a positive (or negative) output gap would cause inflation to be permanently increasing (or decreasing). If, on the other hand, policy is credible, inflation will move towards its new target at a rate depending on the ...
... to unity and a to zero such that inflation becomes indeterminate. This implies that a positive (or negative) output gap would cause inflation to be permanently increasing (or decreasing). If, on the other hand, policy is credible, inflation will move towards its new target at a rate depending on the ...
Quantitative Easing in Joseph`s Egypt with Keynesian Producers
... investing the proceeds abroad, and repatriating them in the future. Krugman (1998) dismissed the possibility that such trade-facilitated intertemporal substitution could lift an economy out of a liquidity trap based on an analysis that takes the shortcut (his word) “that one can ignore the effect of ...
... investing the proceeds abroad, and repatriating them in the future. Krugman (1998) dismissed the possibility that such trade-facilitated intertemporal substitution could lift an economy out of a liquidity trap based on an analysis that takes the shortcut (his word) “that one can ignore the effect of ...
Chapter 10: Classical Business Cycle Analysis: Market
... Should fiscal policy be used to dampen the cycle? Classical economists oppose attempts to dampen the cycle, since prices and wages adjust quickly to restore equilibrium. Besides, fiscal policy increases output by making workers worse off, since they face higher taxes. Instead, government spending s ...
... Should fiscal policy be used to dampen the cycle? Classical economists oppose attempts to dampen the cycle, since prices and wages adjust quickly to restore equilibrium. Besides, fiscal policy increases output by making workers worse off, since they face higher taxes. Instead, government spending s ...
Policy Biases when the Monetary and Fiscal Authorities
... the possibility for negotiation between the fiscal and monetary authorities, which may result in policy coordination. Section 1 of this paper presents a more fully elaborated monetary-fiscal game in which the potential advantages of policy coordination can be clearly seen. Through this model we also ...
... the possibility for negotiation between the fiscal and monetary authorities, which may result in policy coordination. Section 1 of this paper presents a more fully elaborated monetary-fiscal game in which the potential advantages of policy coordination can be clearly seen. Through this model we also ...
Optimal Monetary Policy in a Currency Area
... and to conduct monetary policy within that area. A different institution conducts fiscal policy. But whereas there is a common central bank, different fiscal authorities can be assigned to different regions. The simplest form of a currency area that is of interest for our analysis is a two-region area ...
... and to conduct monetary policy within that area. A different institution conducts fiscal policy. But whereas there is a common central bank, different fiscal authorities can be assigned to different regions. The simplest form of a currency area that is of interest for our analysis is a two-region area ...
Real and Nominal Interest Rates The nominal
... Pull Theory – demand for goods & services exceeds existing supply. One reason for this is too much money in circulation. Cost Push Theory- producers raise prices in order to meet increased costs. This is also known as supply shocks (supply curve shifts left). ...
... Pull Theory – demand for goods & services exceeds existing supply. One reason for this is too much money in circulation. Cost Push Theory- producers raise prices in order to meet increased costs. This is also known as supply shocks (supply curve shifts left). ...
the moral imperative and social rationality of government
... workforce. However, because the firm pays a wage higher than the competitive market wage, it generates involuntary unemployment. There is no market pressure forcing efficiency wages downward toward a market clearing wage. 2 The higher the unemployment rate, the less this wage premium needs to be abo ...
... workforce. However, because the firm pays a wage higher than the competitive market wage, it generates involuntary unemployment. There is no market pressure forcing efficiency wages downward toward a market clearing wage. 2 The higher the unemployment rate, the less this wage premium needs to be abo ...
Exercise 6 (+additional question) in Mankiw:
... GROWTH ACCOUNTING (“TILLVÄXTBOKFÖRING”) AND GROWTH RATES Problem 8.1: In an economy which is characterized by perfect competition in the goods and labor market, the owners of capital get two-thirds of national income, and the workers receive one-third. Assume a Cobb-Douglas aggregate production func ...
... GROWTH ACCOUNTING (“TILLVÄXTBOKFÖRING”) AND GROWTH RATES Problem 8.1: In an economy which is characterized by perfect competition in the goods and labor market, the owners of capital get two-thirds of national income, and the workers receive one-third. Assume a Cobb-Douglas aggregate production func ...
Inflation Scares and Forecast-Based Monetary Policy
... Inflation expectations play a central role in the monetary policy process. Central banks regularly monitor and analyze information regarding inflation expectations, as reflected in surveys or financial markets.1 Moreover, forecasts of inflation are at the center of policy deliberations at inflation- ...
... Inflation expectations play a central role in the monetary policy process. Central banks regularly monitor and analyze information regarding inflation expectations, as reflected in surveys or financial markets.1 Moreover, forecasts of inflation are at the center of policy deliberations at inflation- ...
The Government Spending Multiplier in a Deep Recession
... lower elasticity of recruiting costs to aggregate demand in recessions comes from the fact that matching frictions make the model highly non-linear. With firstorder perturbation methods, the policy rules are necessarily linear and entirely miss this feature so that an increase in government spending ...
... lower elasticity of recruiting costs to aggregate demand in recessions comes from the fact that matching frictions make the model highly non-linear. With firstorder perturbation methods, the policy rules are necessarily linear and entirely miss this feature so that an increase in government spending ...
Phillips curve
In economics, the Phillips curve is a historical inverse relationship between rates of unemployment and corresponding rates of inflation that result in an economy. Stated simply, decreased unemployment, (i.e., increased levels of employment) in an economy will correlate with higher rates of inflation.While there is a short run tradeoff between unemployment and inflation, it has not been observed in the long run. In 1968, Milton Friedman asserted that the Phillips Curve was only applicable in the short-run and that in the long-run, inflationary policies will not decrease unemployment. Friedman then correctly predicted that, in the upcoming years after 1968, both inflation and unemployment would increase. The long-run Phillips Curve is now seen as a vertical line at the natural rate of unemployment, where the rate of inflation has no effect on unemployment. Accordingly, the Phillips curve is now seen as too simplistic, with the unemployment rate supplanted by more accurate predictors of inflation based on velocity of money supply measures such as the MZM (""money zero maturity"") velocity, which is affected by unemployment in the short but not the long term.