Economic Ideas, the Monetary Order and the Uneasy Case for
... This is where the idea of the monetary order becomes helpful to current discussions of monetary policy rules. The macroeconomics on which today’s dominant theory of monetary policy (see, e.g. Michael Woodford 2002) is so firmly based has it that individual behaviour is fundamentally forward looking, ...
... This is where the idea of the monetary order becomes helpful to current discussions of monetary policy rules. The macroeconomics on which today’s dominant theory of monetary policy (see, e.g. Michael Woodford 2002) is so firmly based has it that individual behaviour is fundamentally forward looking, ...
VII Neoclassical synthesis and economic policies of 1960s
... No permanent inflation/unemployment trade-off, consequences: • Permanent positive inflation, which generates an expectation about a positive inflation further on; • Unemployment can not – for a longer period of time – be kept bellow a certain level, natural rate (consistent with full employment outp ...
... No permanent inflation/unemployment trade-off, consequences: • Permanent positive inflation, which generates an expectation about a positive inflation further on; • Unemployment can not – for a longer period of time – be kept bellow a certain level, natural rate (consistent with full employment outp ...
Economics Department, SJSU - San Jose State University
... processes of producing, exchanging, and consuming goods and services. It is divided into two major branches: macroeconomics (Econ. 1A) and microeconomics (Econ. 1B). Macroeconomics is the study of the economy as whole - including growth in income (standard of living), changes in prices (cost of livi ...
... processes of producing, exchanging, and consuming goods and services. It is divided into two major branches: macroeconomics (Econ. 1A) and microeconomics (Econ. 1B). Macroeconomics is the study of the economy as whole - including growth in income (standard of living), changes in prices (cost of livi ...
Chapter 18 Fiscal Policy
... Of course, the long-run aggregate supply curve is vertical. Therefore, in the long run the economy tends to return to the full-employment level of output after any shock. With overall output fixed, any change in government spending must be offset by a longrun decline in another spending component. T ...
... Of course, the long-run aggregate supply curve is vertical. Therefore, in the long run the economy tends to return to the full-employment level of output after any shock. With overall output fixed, any change in government spending must be offset by a longrun decline in another spending component. T ...
Download paper (PDF)
... Indeed, he advocates not only publication of output and inflation forecasts, but also announcement of projections of the future policy path and the central bank objective function. But can transparency go too far? To answer this question, we need to keep the following basic question in mind: Does in ...
... Indeed, he advocates not only publication of output and inflation forecasts, but also announcement of projections of the future policy path and the central bank objective function. But can transparency go too far? To answer this question, we need to keep the following basic question in mind: Does in ...
answers to "do you understand" text questions
... Solution: An increase in reserve requirements, given the level of deposits, will immediately create a reserve deficiency, increasing the fed funds rate. 4. Why do the financial markets pay so much attention to the Fed Funds rate given that the Fed can’t really control that interest rate in the long ...
... Solution: An increase in reserve requirements, given the level of deposits, will immediately create a reserve deficiency, increasing the fed funds rate. 4. Why do the financial markets pay so much attention to the Fed Funds rate given that the Fed can’t really control that interest rate in the long ...
Romer, Christina D., (2008), Business Cycles, The concise
... booms can be generated by surges in private or public spending. For example, if the government spends a lot to fight a war but does not raise taxes, the increased DEMAND will cause not only an increase in the output of war matériel, but also an increase in the take-home pay of DEFENSE workers. The o ...
... booms can be generated by surges in private or public spending. For example, if the government spends a lot to fight a war but does not raise taxes, the increased DEMAND will cause not only an increase in the output of war matériel, but also an increase in the take-home pay of DEFENSE workers. The o ...
PDF
... fundamental theorem is that over time the current rate of return on a durable resource such as farmland is invariant to inflation. Empirical evidence supports this theory; the current rate of return on farmland has tended to average approximately 4 percent, whether the inflation rate is high or low. ...
... fundamental theorem is that over time the current rate of return on a durable resource such as farmland is invariant to inflation. Empirical evidence supports this theory; the current rate of return on farmland has tended to average approximately 4 percent, whether the inflation rate is high or low. ...
AP Macro Economics - Spring Branch ISD
... understand activity around us, and make profitable businesses 2. Define the term “economic perspective.” (Back of the book) A viewpoint that envisions individuals and institutions making rational decisions by comparing the marginal benefits and marginal costs associated with their actions An eco ...
... understand activity around us, and make profitable businesses 2. Define the term “economic perspective.” (Back of the book) A viewpoint that envisions individuals and institutions making rational decisions by comparing the marginal benefits and marginal costs associated with their actions An eco ...
Unpublished mathematical appendix
... Notice that 0 > a i > ai : higher country i's government spending is more recessionary on country i's output than higher government i's spending. This is because higher government spending nanced by higher distortionary taxation lowers labor supply and lowers aggregate demand. The overall impact on ...
... Notice that 0 > a i > ai : higher country i's government spending is more recessionary on country i's output than higher government i's spending. This is because higher government spending nanced by higher distortionary taxation lowers labor supply and lowers aggregate demand. The overall impact on ...
Determinants of Inflation in Nigeria: An Empirical Analysis
... The maintenance of price stability is one of the macroeconomic challenges facing the Nigerian government in our economic history. This elusive factor is known and referred to as inflation in our economic history and this is defined by economists as a continuous rise in prices. By definition, inflati ...
... The maintenance of price stability is one of the macroeconomic challenges facing the Nigerian government in our economic history. This elusive factor is known and referred to as inflation in our economic history and this is defined by economists as a continuous rise in prices. By definition, inflati ...
Answers for Chapters 11 and 12
... (d) An increase in consumer confidence increases consumption spending, shifting the IS curve up and to the right and the AD curve up and to the right, with the same result as in problem part (a). ...
... (d) An increase in consumer confidence increases consumption spending, shifting the IS curve up and to the right and the AD curve up and to the right, with the same result as in problem part (a). ...
Timothy Kehoe - Banco Central do Brasil
... saved the United States — and the rest of the world — from another Great Depression? ...
... saved the United States — and the rest of the world — from another Great Depression? ...
Caution or Activism? Monetary Policy Strategies in an Open Economy
... aspect by assuming that real exchange rate movements are an important part of the monetary transmission mechanism. Our analysis builds on previous studies of monetary policy and learning in a closed economy, which typically conclude that an activist policy is optimal since strong policy actions gene ...
... aspect by assuming that real exchange rate movements are an important part of the monetary transmission mechanism. Our analysis builds on previous studies of monetary policy and learning in a closed economy, which typically conclude that an activist policy is optimal since strong policy actions gene ...
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.