the political economy of inflation, labour market distortions and
... appoints the central banker from the individuals that populate the economy and that the appointed central banker chooses inflation. This situation is often called institutional independence of the central bank. Institutional independence is a necessary but not a sufficient condition for central bank ...
... appoints the central banker from the individuals that populate the economy and that the appointed central banker chooses inflation. This situation is often called institutional independence of the central bank. Institutional independence is a necessary but not a sufficient condition for central bank ...
Review for Unit 2 Exam KEY
... a. A used economics textbook from the bookstore Excluded; used good b. New harvesting equipment for the farm Included; Investment spending (new physical capital) c. 1,000 shares of stock in a computer firm Excluded; does not represent production d. A car produced in a foreign country Excluded; Impor ...
... a. A used economics textbook from the bookstore Excluded; used good b. New harvesting equipment for the farm Included; Investment spending (new physical capital) c. 1,000 shares of stock in a computer firm Excluded; does not represent production d. A car produced in a foreign country Excluded; Impor ...
inflation and the federal reserve system large
... challenges for monetary theory and policy and has revived some old ones. The present dissertation concentrates its analysis in one of the Federal Reserve System (the central bank of the US) response to the crisis, which is Large-Scale Asset Purchases (henceforth LSAPs). By applying LSAPs the Federal ...
... challenges for monetary theory and policy and has revived some old ones. The present dissertation concentrates its analysis in one of the Federal Reserve System (the central bank of the US) response to the crisis, which is Large-Scale Asset Purchases (henceforth LSAPs). By applying LSAPs the Federal ...
A small model of the UK economy - Office for Budget Responsibility
... The New Keynesian Phillips Curve (NKPC) relates current inflation to expectations of future inflation and marginal cost pressures. That the inflation process is forward-looking follows from the price-setting behaviour of firms, which is assumed to follow Calvo (1983). The basic premise is that in ea ...
... The New Keynesian Phillips Curve (NKPC) relates current inflation to expectations of future inflation and marginal cost pressures. That the inflation process is forward-looking follows from the price-setting behaviour of firms, which is assumed to follow Calvo (1983). The basic premise is that in ea ...
Inflation Features
... income increases following an inflation increase). 11. Causes mal-investment (in inflation times, the data given about an investment is often deceptive and unreliable, therefore causing losses in investments). 12. Causes business cycles (many companies will have to go out of business because of the ...
... income increases following an inflation increase). 11. Causes mal-investment (in inflation times, the data given about an investment is often deceptive and unreliable, therefore causing losses in investments). 12. Causes business cycles (many companies will have to go out of business because of the ...
Estimating New Zealand’s neutral interest rate AN2015/05 September 2015
... has presented a broad range of material on neutral interest rates in the past. The most recent discussion was presented in McDermott (2013) and Chetwin and Wood (2013). The theories of neutral interest rates, including their intuition and drivers, are explained in detail in these papers. Recent move ...
... has presented a broad range of material on neutral interest rates in the past. The most recent discussion was presented in McDermott (2013) and Chetwin and Wood (2013). The theories of neutral interest rates, including their intuition and drivers, are explained in detail in these papers. Recent move ...
The Demand for Money
... financial assets that mature within six months or less. Long-term interest rates are interest rates on financial assets that mature a number of years in the future. ...
... financial assets that mature within six months or less. Long-term interest rates are interest rates on financial assets that mature a number of years in the future. ...
Shifting gear: why have neutral interest rates fallen?
... GFC, both in New Zealand and in other countries (figure 10). 8 And estimates based on equations that describe how monetary policy has responded to inflation and demand pressure in the past also suggest the neutral 90-day rate might be lower since the crisis. 9 As I have discussed, adjustments in the ...
... GFC, both in New Zealand and in other countries (figure 10). 8 And estimates based on equations that describe how monetary policy has responded to inflation and demand pressure in the past also suggest the neutral 90-day rate might be lower since the crisis. 9 As I have discussed, adjustments in the ...
TypeA - Department Of Economics
... 2. What would happen to the equilibrium price and quantity of lattes if the cost to produce steamed milk, which is used to make lattes, increased, and scientists discovered that lattes cause heart attacks? 3. Refer to Figure 1 above. Suppose a price ceiling of $5 is ...
... 2. What would happen to the equilibrium price and quantity of lattes if the cost to produce steamed milk, which is used to make lattes, increased, and scientists discovered that lattes cause heart attacks? 3. Refer to Figure 1 above. Suppose a price ceiling of $5 is ...
Empirical Evidence on the Demand for Money
... Equation 3 is known as the opportunity locus because it tells us the combinations of and that are feasible for the individual. This equation is written in a form in which the variable corresponds to the Y axis and the variable to the X axis. The opportunity locus is a straight line going thr ...
... Equation 3 is known as the opportunity locus because it tells us the combinations of and that are feasible for the individual. This equation is written in a form in which the variable corresponds to the Y axis and the variable to the X axis. The opportunity locus is a straight line going thr ...
chapter outline
... how much they paid for their first car.) Students can then determine how much they would have to pay in current dollars using the consumer price index. ...
... how much they paid for their first car.) Students can then determine how much they would have to pay in current dollars using the consumer price index. ...
Measuring Macroeconomics
... Aggregate Output National income accounts An accounting system used to measure aggregate economic activity. The typical measure of aggregate output in the national income accounts is gross domestic product, or GDP. ...
... Aggregate Output National income accounts An accounting system used to measure aggregate economic activity. The typical measure of aggregate output in the national income accounts is gross domestic product, or GDP. ...
Transition from chapter 1 to chapter 2
... Medium run adjustment - classical (P flexible) M and P are proportional - economy ______ at FE As the money supply contracts, the price level ________ resulting in a real ___________ (an __________ in RER) and an _____________ in the country’s international competitiveness - thus _________ equilibr ...
... Medium run adjustment - classical (P flexible) M and P are proportional - economy ______ at FE As the money supply contracts, the price level ________ resulting in a real ___________ (an __________ in RER) and an _____________ in the country’s international competitiveness - thus _________ equilibr ...
Lec_notes_1021
... out against some of the household saving. But, taken together, households save more than they borrow. The SS curve reflects net supply of loanable funds coming from households made available for business investment o You also might wonder how this model deals with the fact that much of firms’ invest ...
... out against some of the household saving. But, taken together, households save more than they borrow. The SS curve reflects net supply of loanable funds coming from households made available for business investment o You also might wonder how this model deals with the fact that much of firms’ invest ...
Liquidity Traps and Expectation Dynamics: Fiscal Stimulus or Fiscal
... policy credibility and wealth eects to eliminate all equilibria except the steady state. There are however two problems with this approach: (i) it relies too heavily on perfect foresight, and (ii) the mechanism is “too powerful”: bad outcomes never happen. In this paper we explore policies desi ...
... policy credibility and wealth eects to eliminate all equilibria except the steady state. There are however two problems with this approach: (i) it relies too heavily on perfect foresight, and (ii) the mechanism is “too powerful”: bad outcomes never happen. In this paper we explore policies desi ...
Monetary Policy Statement March 2008 Contents
... is the fact that firms have had several cost increases, labour ...
... is the fact that firms have had several cost increases, labour ...
PLEASE DO NOT QUOTE A Small Estimated Model (SEM) for New Zealand
... coefficients were estimated using an Almon lag structure with a quadratic profile on the coefficients. This approach helps impose the prior of a smooth response over all of the lags and improves the estimation efficiency. The coefficients on the two semi-annual GDP14 growth variables sum to just ove ...
... coefficients were estimated using an Almon lag structure with a quadratic profile on the coefficients. This approach helps impose the prior of a smooth response over all of the lags and improves the estimation efficiency. The coefficients on the two semi-annual GDP14 growth variables sum to just ove ...
Stabilizing chaos in a dynamic macroeconomic model
... explanation of why prices are not at their market clearing level. Following Bohm (1993) price and wage adjustments are introduced explicitly based on the ‘law of supply and demand’. They could be combined with expectation augmentations or cost push terms, but this is a task for another place. It tur ...
... explanation of why prices are not at their market clearing level. Following Bohm (1993) price and wage adjustments are introduced explicitly based on the ‘law of supply and demand’. They could be combined with expectation augmentations or cost push terms, but this is a task for another place. It tur ...
OECD Economic Outlook: Projections for Latin American countries
... been unusually weak. Global growth has consistently been slower than the average pace during the dozen or so years before the global financial crisis. The failure to achieve a stronger cyclical upswing has had very real costs in terms of foregone employment, stagnant living standards in advanced eco ...
... been unusually weak. Global growth has consistently been slower than the average pace during the dozen or so years before the global financial crisis. The failure to achieve a stronger cyclical upswing has had very real costs in terms of foregone employment, stagnant living standards in advanced eco ...
Internal Balance
... countries, partly resolve the trilemma. • Yet they encouraged flows of goods and services because of the view that trade benefits all economies. – Currencies were gradually made convertible (exchangeable) between member countries to encourage trade in goods and services valued in different currencie ...
... countries, partly resolve the trilemma. • Yet they encouraged flows of goods and services because of the view that trade benefits all economies. – Currencies were gradually made convertible (exchangeable) between member countries to encourage trade in goods and services valued in different currencie ...
Optimal simple and implementable monetary and fiscal rules
... rather unrealistic features have been so widely adopted is not that they are the most empirically obvious ones to make nor that researchers believe that they are inconsequential for the nature of optimal monetary policy. Rather, the motivation is purely technical. Namely, the stylized models conside ...
... rather unrealistic features have been so widely adopted is not that they are the most empirically obvious ones to make nor that researchers believe that they are inconsequential for the nature of optimal monetary policy. Rather, the motivation is purely technical. Namely, the stylized models conside ...
Document
... perfect information and may respond incorrectly to any changes in the economy, actually making conditions worse. Second, expectations are not constant and may change in response to change in policy, making the end result of these policies unpredictable. Third, there are lags in policy, meaning that ...
... perfect information and may respond incorrectly to any changes in the economy, actually making conditions worse. Second, expectations are not constant and may change in response to change in policy, making the end result of these policies unpredictable. Third, there are lags in policy, meaning that ...
Internationalized Production in a Small Open Economy Aur´ elien Eyquem G¨
... Nelson (2000), the exchange rate pass-through to consumer price inflation is affected both by the share of intermediate goods imports in total imports and by the elasticity of substitution between domestic and foreign intermediate goods. The remainder of the paper is organized as follows. Section 2 ...
... Nelson (2000), the exchange rate pass-through to consumer price inflation is affected both by the share of intermediate goods imports in total imports and by the elasticity of substitution between domestic and foreign intermediate goods. The remainder of the paper is organized as follows. Section 2 ...
Monetary policy
Monetary policy is the process by which the monetary authority of a country controls the supply of money, often targeting an inflation rate or interest rate to ensure price stability and general trust in the currency.Further goals of a monetary policy are usually to contribute to economic growth and stability, to lower unemployment, and to maintain predictable exchange rates with other currencies.Monetary economics provides insight into how to craft optimal monetary policy.Monetary policy is referred to as either being expansionary or contractionary, where an expansionary policy increases the total supply of money in the economy more rapidly than usual, and contractionary policy expands the money supply more slowly than usual or even shrinks it. Expansionary policy is traditionally used to try to combat unemployment in a recession by lowering interest rates in the hope that easy credit will entice businesses into expanding. Contractionary policy is intended to slow inflation in order to avoid the resulting distortions and deterioration of asset values.Monetary policy differs from fiscal policy, which refers to taxation, government spending, and associated borrowing.