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... When tax revenue is inadequate and ability to borrow is limited, govt may print money to pay for its spending. Almost all hyperinflations start this way. The revenue from printing money is the inflation tax: printing money causes inflation, which is like a tax on everyone who holds money. In ...
... When tax revenue is inadequate and ability to borrow is limited, govt may print money to pay for its spending. Almost all hyperinflations start this way. The revenue from printing money is the inflation tax: printing money causes inflation, which is like a tax on everyone who holds money. In ...
original article in English
... Lastly, we observe that demand factors would also appear to have a concurrent influence on periods of stagflation. As the literature suggests, these episodes could be exacerbated by a poor coordination of monetary and/or fiscal policy. High levels of real long-term interest rates as well as declines ...
... Lastly, we observe that demand factors would also appear to have a concurrent influence on periods of stagflation. As the literature suggests, these episodes could be exacerbated by a poor coordination of monetary and/or fiscal policy. High levels of real long-term interest rates as well as declines ...
Interest Rate Rules and Equilibrium Stability
... in hours worked, lower markups due to deep habits, and high inflation as the firms adjust prices to get to their wanted markups. But an interest rate rule that has απ > 1, will generate high real interest rate along the adjustment path and imply lower consumption and investment relative to steady st ...
... in hours worked, lower markups due to deep habits, and high inflation as the firms adjust prices to get to their wanted markups. But an interest rate rule that has απ > 1, will generate high real interest rate along the adjustment path and imply lower consumption and investment relative to steady st ...
ECON 300 Fall 2007 Midterm Essay 1. (30 points) In the general
... B. remain constant because saving and investment would not change. C. fall because the real exchange rate would rise. D. rise because the real exchange rate would fall. 17. A competitive firm rents capital until the marginal product of capital equals the A. real wage. B. rental price of capital. C. ...
... B. remain constant because saving and investment would not change. C. fall because the real exchange rate would rise. D. rise because the real exchange rate would fall. 17. A competitive firm rents capital until the marginal product of capital equals the A. real wage. B. rental price of capital. C. ...
Unemployment
... decisions), whereas involuntary unemployment exists because of the socio-economic environment (including the market structure, government intervention, and the level of aggregate demand) in which individuals operate. In these terms, much or most of frictional unemployment is voluntary, since it refl ...
... decisions), whereas involuntary unemployment exists because of the socio-economic environment (including the market structure, government intervention, and the level of aggregate demand) in which individuals operate. In these terms, much or most of frictional unemployment is voluntary, since it refl ...
CHAPTER ELEVEN UNEMPLOYMENT
... sectors. While one sector is eliminating jobs, another will be hiring. It takes information, effort, and time to accomplish this unending transformation. The result is "unemployment here" matched by "job vacancies there", the essence of frictional unemployment. Note that the continued turnover of th ...
... sectors. While one sector is eliminating jobs, another will be hiring. It takes information, effort, and time to accomplish this unending transformation. The result is "unemployment here" matched by "job vacancies there", the essence of frictional unemployment. Note that the continued turnover of th ...
The Theory of Relative-Price Changes, Money, and Demand Factors
... concentrate on the period of quantitative easing as conducted by the Bank of Japan from March 2001 to March 2006. During this time, widely used indicators, such as short-term interest rates or changes in the money supply, do not work. Instead, we construct an indicator based on commercial banks’ exc ...
... concentrate on the period of quantitative easing as conducted by the Bank of Japan from March 2001 to March 2006. During this time, widely used indicators, such as short-term interest rates or changes in the money supply, do not work. Instead, we construct an indicator based on commercial banks’ exc ...
Aggregate Demand/Supply
... aggregate price level leads to higher profit per unit of output and increased aggregate output in the short run. 6. Changes in commodity prices, nominal wages, and productivity lead to changes in producers’ profits and shift the short-run aggregate supply curve. 7. In the long run, all prices are fl ...
... aggregate price level leads to higher profit per unit of output and increased aggregate output in the short run. 6. Changes in commodity prices, nominal wages, and productivity lead to changes in producers’ profits and shift the short-run aggregate supply curve. 7. In the long run, all prices are fl ...
8418 Investigate macroeconomic activity using the
... Aggregate supply curve plots the relationship between the quantity of real GDP supplied and the price level, all else held constant. Stagflation is inflation that occurs while the economy is contracting (stagnating) and real output is declining. ...
... Aggregate supply curve plots the relationship between the quantity of real GDP supplied and the price level, all else held constant. Stagflation is inflation that occurs while the economy is contracting (stagnating) and real output is declining. ...
Outcomes and evidence requirements
... Aggregate supply curve plots the relationship between the quantity of real GDP supplied and the price level, all else held constant. Stagflation is inflation that occurs while the economy is contracting (stagnating) and real output is declining. ...
... Aggregate supply curve plots the relationship between the quantity of real GDP supplied and the price level, all else held constant. Stagflation is inflation that occurs while the economy is contracting (stagnating) and real output is declining. ...
Inflation Targeting
... The BSP uses the inflation targeting framework as its basic approach to monetary policy. Under this approach, the BSP announces an explicit inflation target and strongly commits to achieving it over a policy horizon using various monetary policy instruments. The inflation targeting approach that is ...
... The BSP uses the inflation targeting framework as its basic approach to monetary policy. Under this approach, the BSP announces an explicit inflation target and strongly commits to achieving it over a policy horizon using various monetary policy instruments. The inflation targeting approach that is ...
Working Paper No. 563 Whither New Consensus Macroeconomics
... relating the monetary policy rule to the IS-type curve. The central bank, via changes in the short-run nominal interest rate, is actually able to control the short-run real interest rate. In this way, the central bank is able to affect the consumption and investment components of aggregate demand an ...
... relating the monetary policy rule to the IS-type curve. The central bank, via changes in the short-run nominal interest rate, is actually able to control the short-run real interest rate. In this way, the central bank is able to affect the consumption and investment components of aggregate demand an ...
... unemployment is a complex phenomenon. Unemployment is referred to a situation where an individual who is physically able, mentally alert and intellectually sound is willing to employ these qualities to earn a living lacks the opportunity to do so (Lawanson, 2007). A nation can enjoy a high standard ...
Rudiger Dornbusch Working Paper No. i66
... ministers later, stability is a prospect far removed and the traditional conflicts about real wages; distribution, and inflation remain topical and are further complicated by an external debt crisis. In late 1983 production of manufactures and real GDP were still at ...
... ministers later, stability is a prospect far removed and the traditional conflicts about real wages; distribution, and inflation remain topical and are further complicated by an external debt crisis. In late 1983 production of manufactures and real GDP were still at ...
Problems for Macroeconomics, 2/e
... Although we graph employment against time in this problem (since the book does not use logarithms), the result would be similar if we used a logarithmic scale. From the graph, employment growth was negative over 2001. Then, employment growth continued at roughly the same rate (perhaps lower, as woul ...
... Although we graph employment against time in this problem (since the book does not use logarithms), the result would be similar if we used a logarithmic scale. From the graph, employment growth was negative over 2001. Then, employment growth continued at roughly the same rate (perhaps lower, as woul ...
Lecture Outline
... There are two macroeconomic effects that cause the size of the shift in the aggregate-demand curve to be different from the change in the level of government purchases. They are called the multiplier effect and the crowdingcrowding-out effect. ...
... There are two macroeconomic effects that cause the size of the shift in the aggregate-demand curve to be different from the change in the level of government purchases. They are called the multiplier effect and the crowdingcrowding-out effect. ...
Study questions for Macroeconomics
... supports Smith's perspective concerning the benevolence of "the invisible hand" and one that does not. Name Smith's most famous work. When was it published? Define and give an example of opportunity cost. Distinguish between microeconomics and macroeconomics. Distinguish between "standard of living" ...
... supports Smith's perspective concerning the benevolence of "the invisible hand" and one that does not. Name Smith's most famous work. When was it published? Define and give an example of opportunity cost. Distinguish between microeconomics and macroeconomics. Distinguish between "standard of living" ...
Aggregate Demand II: Applying the IS–LM Model
... Once again, to tell the story that explains the economy’s adjustment from point A to point B, we rely on the building blocks of the IS–LM model—the Keynesian cross and the theory of liquidity preference. This time, we begin with the money market, where the monetary-policy action occurs. When the Fed ...
... Once again, to tell the story that explains the economy’s adjustment from point A to point B, we rely on the building blocks of the IS–LM model—the Keynesian cross and the theory of liquidity preference. This time, we begin with the money market, where the monetary-policy action occurs. When the Fed ...
The Thick Market Effect on Local Unemployment Rate Fluctuations ∗
... The empirical analysis utilizes a sample of 295 PMSAs in the U.S. over the years 1981–1997. During this period, the U.S. economy experienced both recession and expansion. The data on monthly unemployment rates is collected from the Employment and Earnings published by the Department of Labor’s Burea ...
... The empirical analysis utilizes a sample of 295 PMSAs in the U.S. over the years 1981–1997. During this period, the U.S. economy experienced both recession and expansion. The data on monthly unemployment rates is collected from the Employment and Earnings published by the Department of Labor’s Burea ...
Unemployment dynamics and NAIRU estimates for Accession countries: a univariate approach
... on speci…cation issues (number and identity of explanatory variables and its linear-non linear and/or symmetric-asymmetric nature)3 ; third, there is a statistical identi…cation problem typical of systems of equations where the determined variable enters as explanatory variable at the same time, cre ...
... on speci…cation issues (number and identity of explanatory variables and its linear-non linear and/or symmetric-asymmetric nature)3 ; third, there is a statistical identi…cation problem typical of systems of equations where the determined variable enters as explanatory variable at the same time, cre ...
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.