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... Recap of classical macro theory Output is determined by the supply side: supplies of capital, labor technology Changes in demand for goods & services (C, I, G ) only affect prices, not quantities. ...
... Recap of classical macro theory Output is determined by the supply side: supplies of capital, labor technology Changes in demand for goods & services (C, I, G ) only affect prices, not quantities. ...
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... accumulation and future living standards Raising taxes reduces incentives to work and save Focusing on the deficit diverts attention from other programs that redistribute income across generations, such as Social Security. Debt/income ratio more relevant than debt itself. © 2015 Cengage Learni ...
... accumulation and future living standards Raising taxes reduces incentives to work and save Focusing on the deficit diverts attention from other programs that redistribute income across generations, such as Social Security. Debt/income ratio more relevant than debt itself. © 2015 Cengage Learni ...
Chapter 8: The Natural Rate of Unemployment and the Phillips Curve
... Phillips Curve Relation People that are very inflation-conscious typically work their price-expectationadjustment mechanism into their job contracts. Persistent and high inflation usually leads to the establishment of wage indexation, a rule that automatically increases wages in line with inflat ...
... Phillips Curve Relation People that are very inflation-conscious typically work their price-expectationadjustment mechanism into their job contracts. Persistent and high inflation usually leads to the establishment of wage indexation, a rule that automatically increases wages in line with inflat ...
Chapter 15
... a. There is a clear increasing trend, so that would most likely explain the data. There may be a small seasonal component, because people are more likely to move at certain times of the year, but it would be small compared to the obvious trend. b. Predicted population = −301 + (8.25)(100) = −301 + 8 ...
... a. There is a clear increasing trend, so that would most likely explain the data. There may be a small seasonal component, because people are more likely to move at certain times of the year, but it would be small compared to the obvious trend. b. Predicted population = −301 + (8.25)(100) = −301 + 8 ...
Sec 4, Mod 16, 17 Aggregate Demand
... An increase in either expected future real GDP or production capacity will result in more investment at the same interest rate ...
... An increase in either expected future real GDP or production capacity will result in more investment at the same interest rate ...
MEASURING THE PRICE LEVEL
... the special case when prices are constant, do we not have to worry about this distinction. As soon as prices vary, it is necessary to pay close attention to the difference between nominal and real variables. For example, if a newscaster announces that GDP increased by 5% last year, is this good news ...
... the special case when prices are constant, do we not have to worry about this distinction. As soon as prices vary, it is necessary to pay close attention to the difference between nominal and real variables. For example, if a newscaster announces that GDP increased by 5% last year, is this good news ...
The impact of foreign interest rates on the economy: The role of the
... growth, not the negative one found in this paper. We are able to address this issue by eliminating large home countries that could plausibly affect the base interest rates. There is still a possibility that world shocks influence domestic output growth and the base interest rate contemporaneously. W ...
... growth, not the negative one found in this paper. We are able to address this issue by eliminating large home countries that could plausibly affect the base interest rates. There is still a possibility that world shocks influence domestic output growth and the base interest rate contemporaneously. W ...
Real-Time Estimation of Trend Output and Kevin J. Lansing *
... 0.3 or 0.4, depending on the econometrician’s sample period and rule specification. The intuition for this result is straightforward. Since the Fed’s algorithm for estimating potential output assigns more weight to recent data, the end-of-sample estimate can undergo substantial changes as new observa ...
... 0.3 or 0.4, depending on the econometrician’s sample period and rule specification. The intuition for this result is straightforward. Since the Fed’s algorithm for estimating potential output assigns more weight to recent data, the end-of-sample estimate can undergo substantial changes as new observa ...
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... according to an expectations-augmented Phillips curve. πit of inflation expected to prevail during time period t, which is formed according to the hypothesis of adaptive expectations at (the end of) time period t − 1 (equation (5)). εi ∈ [0, 1] are positive parameters determining the speed of adjust ...
... according to an expectations-augmented Phillips curve. πit of inflation expected to prevail during time period t, which is formed according to the hypothesis of adaptive expectations at (the end of) time period t − 1 (equation (5)). εi ∈ [0, 1] are positive parameters determining the speed of adjust ...
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... Open-market purchases and sales are called open-market operations Could also buy newly issued government bonds directly from the government (i.e., the Treasury) This is the same as the government financing its expenditures directly by printing money This happens frequently in some countries ...
... Open-market purchases and sales are called open-market operations Could also buy newly issued government bonds directly from the government (i.e., the Treasury) This is the same as the government financing its expenditures directly by printing money This happens frequently in some countries ...
The Demand for Currency Substitution.
... problem. Second, there is no utility function in the model, so what distinguishes the two goods are the various costs and rates of return associated with them and the proportions of the household budget that they constitute.6 Those characteristics determine how much of each currency will be used to ...
... problem. Second, there is no utility function in the model, so what distinguishes the two goods are the various costs and rates of return associated with them and the proportions of the household budget that they constitute.6 Those characteristics determine how much of each currency will be used to ...
Monetary Theory I
... result of stringent bank regulation and declines in real estate values. Because households and businesses weren’t able to replace bank credit with funds from other sources, consumer spending fell. In AD–AS analysis, the decline in spending reduces aggregate demand and puts downward pressure on price ...
... result of stringent bank regulation and declines in real estate values. Because households and businesses weren’t able to replace bank credit with funds from other sources, consumer spending fell. In AD–AS analysis, the decline in spending reduces aggregate demand and puts downward pressure on price ...
Volume 72 No. 1, March 2009 Contents
... the importance of housing equity withdrawal – a process ...
... the importance of housing equity withdrawal – a process ...
MERCATUS GRADUATE POLICY ESSAY
... generally does not set nominal rates for longer-term instruments. However, the Fed cannot set these real short-term interest rates either because it only operates in the market for bank reserves and cannot set inflation expectations directly. For the most part, then, the demand for goods and service ...
... generally does not set nominal rates for longer-term instruments. However, the Fed cannot set these real short-term interest rates either because it only operates in the market for bank reserves and cannot set inflation expectations directly. For the most part, then, the demand for goods and service ...
Long-Run and Short-Run Concerns: Growth, Productivity
... • The business cycle describes the periodic ups and downs in the economy, or deviations of output and employment away from the longrun trend. • A recession is roughly a period in which real GDP declines for at least two consecutive quarters. It is marked by falling output and rising ...
... • The business cycle describes the periodic ups and downs in the economy, or deviations of output and employment away from the longrun trend. • A recession is roughly a period in which real GDP declines for at least two consecutive quarters. It is marked by falling output and rising ...
explanation of the prize
... Sargent and Sims have both made seminal contributions that allow researchers to specify, empirically implement, and evaluate dynamic models of the macroeconomy with a central role for expectations. Their subsequent work, from the initial papers until today, has delivered many extensions, re…nements, ...
... Sargent and Sims have both made seminal contributions that allow researchers to specify, empirically implement, and evaluate dynamic models of the macroeconomy with a central role for expectations. Their subsequent work, from the initial papers until today, has delivered many extensions, re…nements, ...
Central Bank Talk: Does It Matter and Why? Introduction
... minutes that were released after the subsequent FOMC meeting, but those minutes were typically viewed as too stale to provide much significant information. At its December 1998 meeting, the FOMC implemented an important change in its disclosure practices. In addition to releasing statements accompan ...
... minutes that were released after the subsequent FOMC meeting, but those minutes were typically viewed as too stale to provide much significant information. At its December 1998 meeting, the FOMC implemented an important change in its disclosure practices. In addition to releasing statements accompan ...
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.