The Effect of Monetary Policy on Private Sector Investment in Kenya
... credit plays a significant role. Kahn (2010) explains that conventionally changes in short-term interest rates brought about by the central bank, through an open-market operations change the cost of capital, that then changes the rate of fixed investment, (housing expenditures, inventories). The cha ...
... credit plays a significant role. Kahn (2010) explains that conventionally changes in short-term interest rates brought about by the central bank, through an open-market operations change the cost of capital, that then changes the rate of fixed investment, (housing expenditures, inventories). The cha ...
Quantitative Easing in a Small Open Economy: An International
... preferences for liquidity, as discussed in Andres et al. (2004) and recently in Krishnamurthy and Vising-Jorgensen (2012).8 Thus, agents are concerned about a loss of liquidity when they hold long-term bonds relative to the same investment in short-term bonds. Different from Andres et al. (2004), ag ...
... preferences for liquidity, as discussed in Andres et al. (2004) and recently in Krishnamurthy and Vising-Jorgensen (2012).8 Thus, agents are concerned about a loss of liquidity when they hold long-term bonds relative to the same investment in short-term bonds. Different from Andres et al. (2004), ag ...
Keynes’s Monetary Theory: A Different Jnterpretation Allan H. Meltzer
... when the economy was plagued by idle capacity, Keynes held that the capital stock exerted a negative influence on real activity via its depressing effect on rates of return and the inducement to invest. In ignoring this point and arguing that Keynes believed the existing capital stock was too small ...
... when the economy was plagued by idle capacity, Keynes held that the capital stock exerted a negative influence on real activity via its depressing effect on rates of return and the inducement to invest. In ignoring this point and arguing that Keynes believed the existing capital stock was too small ...
QUIZ 2: Macro – Winter 2002 - The University of Chicago Booth
... curve does not shift as C(.), G, and NX do not change and the autonomous part of I (i.e., I(.)) does not change. b. A fall in government spending (G) will cause the IS curve to shift to the left and investment (I) to fall. We define the IS curve Y= C+I+G+NX. As G decreases, the IS curve will shift t ...
... curve does not shift as C(.), G, and NX do not change and the autonomous part of I (i.e., I(.)) does not change. b. A fall in government spending (G) will cause the IS curve to shift to the left and investment (I) to fall. We define the IS curve Y= C+I+G+NX. As G decreases, the IS curve will shift t ...
- TestbankU
... inflationary expectations in the United States as oil prices increased abruptly, and (2) increased the expected U.S. budget deficit as government expenditures were necessary to boost military support. However, it may also cause some analysts to revise their forecasts of economic growth downward. The ...
... inflationary expectations in the United States as oil prices increased abruptly, and (2) increased the expected U.S. budget deficit as government expenditures were necessary to boost military support. However, it may also cause some analysts to revise their forecasts of economic growth downward. The ...
IS THERE A TRADE-OFF BETWEEN INFLATION AND OUTPUT STABILIZATION?
... This …nding is worth highlighting, because it reminds us that the common distinction between “e¢ cient”and “ine¢ cient”shocks— shocks that do or do not a¤ect a model’s e¢ cient equilibrium— can be a misleading guide to optimal policy. More speci…cally, it is not true that policy should accommodate t ...
... This …nding is worth highlighting, because it reminds us that the common distinction between “e¢ cient”and “ine¢ cient”shocks— shocks that do or do not a¤ect a model’s e¢ cient equilibrium— can be a misleading guide to optimal policy. More speci…cally, it is not true that policy should accommodate t ...
Effectiveness of devaluation in achieving Internal and External
... implementing the precondition of the World Bank and IMF until the present day. Of all the implemented measures the concern of this paper will only be the currency devaluation. In ...
... implementing the precondition of the World Bank and IMF until the present day. Of all the implemented measures the concern of this paper will only be the currency devaluation. In ...
Capital account liberalisation: the Japanese experience
... (1983b, page 12)). At this time, there were controls on the prepayment of exports; but when huge profits over a very short period could be foreseen, the effectiveness of such controls was limited. After the United Kingdom shifted to floating exchange rates on 23 August, Japan did likewise on 28 Augu ...
... (1983b, page 12)). At this time, there were controls on the prepayment of exports; but when huge profits over a very short period could be foreseen, the effectiveness of such controls was limited. After the United Kingdom shifted to floating exchange rates on 23 August, Japan did likewise on 28 Augu ...
How Has Globalization Affected Inflation?
... Sweden, Switzerland, the United Kingdom, and the United States. 2China, India, Indonesia, Korea, Malaysia, the Philippines, and Thailand. 3Argentina, Brazil, Chile, Colombia, Dominican Republic, Ecuador, Mexico, Peru, and Venezuela. 4Czech Republic, Egypt, Hungary, Poland, Romania, Russia, South Afr ...
... Sweden, Switzerland, the United Kingdom, and the United States. 2China, India, Indonesia, Korea, Malaysia, the Philippines, and Thailand. 3Argentina, Brazil, Chile, Colombia, Dominican Republic, Ecuador, Mexico, Peru, and Venezuela. 4Czech Republic, Egypt, Hungary, Poland, Romania, Russia, South Afr ...
Lecture_8_chap09_10_11
... supplies of capital, labor technology. Changes in demand for goods & services (C, I, G ) only affect prices, not quantities. ...
... supplies of capital, labor technology. Changes in demand for goods & services (C, I, G ) only affect prices, not quantities. ...
Financial Market Imperfections and the impact of
... Suggested Citation: Berthou, Antoine; Berman, Nicolas (2006) : Financial Market Imperfections and the impact of exchange rate movements on exports, Proceedings of the German ...
... Suggested Citation: Berthou, Antoine; Berman, Nicolas (2006) : Financial Market Imperfections and the impact of exchange rate movements on exports, Proceedings of the German ...
Chapter 33: Open Economy Macroeconomics: The
... Rates on the Economy • When a country’s currency depreciates (falls in value), its import prices rise and its export prices (in foreign currencies) fall. • When the U.S. dollar is cheap, U.S. products are more competitive in world markets, and foreign-made goods look expensive to U.S. ...
... Rates on the Economy • When a country’s currency depreciates (falls in value), its import prices rise and its export prices (in foreign currencies) fall. • When the U.S. dollar is cheap, U.S. products are more competitive in world markets, and foreign-made goods look expensive to U.S. ...
Interest Rate and Business Cycles in a Credit Constrained Small Open Economy
... accumulating capital stock. The latter works as collateral in the sense of Kiyotaki and Moore (1997). Third, the economy’s representative agent is relatively impatient, so that the economy …nds itself not only in a negative net foreign asset position, but also facing a permanently binding credit con ...
... accumulating capital stock. The latter works as collateral in the sense of Kiyotaki and Moore (1997). Third, the economy’s representative agent is relatively impatient, so that the economy …nds itself not only in a negative net foreign asset position, but also facing a permanently binding credit con ...
Forecasting Real GDP
... It’s own past captures sluggish adjustment of inflation to shocks/changes in its determinants A constant captures broadly the level of inflation in the absence of any other determinants: represents the inflation anchor Reserve money growth captures role of monetary policy (and partly dem ...
... It’s own past captures sluggish adjustment of inflation to shocks/changes in its determinants A constant captures broadly the level of inflation in the absence of any other determinants: represents the inflation anchor Reserve money growth captures role of monetary policy (and partly dem ...
Document
... A coherent policy framework is needed to ensure that the positive interactions between micro- and macroprudential frameworks are maximised. In order to do so, jurisdictions must develop appropriate institutional frameworks or regulatory architecture. While these may differ across countries due to na ...
... A coherent policy framework is needed to ensure that the positive interactions between micro- and macroprudential frameworks are maximised. In order to do so, jurisdictions must develop appropriate institutional frameworks or regulatory architecture. While these may differ across countries due to na ...
Inflation, Disinflation, and Deflation
... Modern economies use fiat money—pieces of paper that have no intrinsic value but are accepted as a medium of exchange. In the United States and most other wealthy countries, the decision about how many pieces of paper to issue is placed in the hands of a central bank that is somewhat independent of ...
... Modern economies use fiat money—pieces of paper that have no intrinsic value but are accepted as a medium of exchange. In the United States and most other wealthy countries, the decision about how many pieces of paper to issue is placed in the hands of a central bank that is somewhat independent of ...
Information, Wage-Price Dynamics, and Business Fluctuations
... offers the parable of an economy in which goods are produced an separate “islands,” each with its own labor market. Wages and employment decisions must be made on each island without an opportunity to observe what is being done on other islands. An increase in nominal expenditure across all of the i ...
... offers the parable of an economy in which goods are produced an separate “islands,” each with its own labor market. Wages and employment decisions must be made on each island without an opportunity to observe what is being done on other islands. An increase in nominal expenditure across all of the i ...
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.